The term was coined around the time of the GFC but now we’re starting to see its rise in popularity – the “Gig Economy” – what is it and how will it change the future of work?
By definition, a “gig” is a job that is temporary or that has an uncertain future. Gig Economy is the modern day moniker used to describe short-term contracts or freelance work, as opposed to permanent roles. The definition is very broad and could for example include full-time independent contractors/consultants through to someone with a side hustle as a food delivery driver.
It’s a concept that came to the fore following the 2008/2009 financial crisis when, faced with rising unemployment, workers had to be more creative in how they made an income and in some instances that meant taking on multiple full and/or part time roles. Technology was also evolving and with online platforms enabling the “sharing economy” (ride, scooter etc), opportunities for flexible working have also opened up.
According to online magazine Forbes, there are two distinct segments within the Gig Economy - knowledge-based gigs (such as independent management consultants) to service-based ones (such as tradespeople and delivery drivers).
The increase in knowledge-based gigs and in particular “on-demand executives” is an interesting concept for business and one with significant potential. For companies that need executive level guidance, perspective and leadership - possibly for a very specific challenge on the horizon - an independent, outside perspective could be extremely beneficial. This could include for example a temporary CMO, CFO, CXO, CIO or Head of HR - your business gets executive experience without the full-time cost and commitment.
The above example provides clear benefits for the gig worker or contractor – in terms of flexibility and remuneration commensurate with their experience, not to mention the mental stimulation that comes from working in multiple businesses on a vast array of projects/challenges.
However for the service-based segment of the Gig Economy, there are concerns around whether New Zealand’s existing employment laws are fit for purpose. Experience in the UK and Australia for example, have raised questions around worker exploitation and related issues around social welfare, taxation and superannuation.
There’s no denying that there is innovation in every aspect of what we do in business. The rise of the Gig Economy could for example lead towards a more task-oriented approach to work – consider the impact this would have on your people strategy and related HR policies and practices, let alone the cultural tone of the workplace.
The way we work is changing and organisations (and workers) will have to adapt. The future could be one where a business functions on a small group of permanent staff in core decision-making leadership roles, supplemented by a global pool of talent on an “as needed” basis. This presents significant challenges for organisations in terms of how they operate as well as for individuals and the types of skills they will need to thrive in this environment.
The Decipher Team
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