Written by Simon Morgan, HR Dept South East London and North Kent
High profile coverage of firms such as Uber (which lost the right to classify its UK drivers as self-employed at a tribunal) and Sports Direct (which received a lot of negative press over its zero-hours contracts) have increased scrutiny of the gig economy in recent months. Yet despite the criticism, it shows no signs of abating, with latest figures from the ONS suggesting that around 15% of the UK workforce is currently self-employed.
The potential benefits of the gig economy for workers are fairly well-versed – flexible hours, more autonomy, better work-life balance, working from home, higher pay – but just what are the benefits for firms, and what do firms need to look out for when employing freelancers?
Flexible resourcing. Most firms find that demand goes through cycles, with particular times of the year far busier than others. One of the biggest benefits of employing freelancers over permanent staff is that you can flex resource up and down to reflect demand, keeping overheads to a minimum and allowing you to offer more competitive rates to your clients.
But as the Uber and Sports Direct case studies have shown, flexible staffing policies mustn’t equate to substandard ones – you may need to restructure your employee policies to ensure that you’re offering fair employment conditions to all.
Access to a global talent pool. Advances in technology mean that it’s often just as easy for colleagues to collaborate on a project virtually as it is for them to work together face-to-face. In this way, firms are no longer tied to recruiting staff locally and are instead able to source the very best people from right across the globe.
But businesses need to bear in mind that vetting people who are based abroad can be more difficult, time-consuming and ultimately costly than vetting people locally. And remember that when you recruit globally, you’re opening yourself up to even more competition – you may find yourself being forced to pay more for the most talented candidates.
Diversity of expertise. By embracing the gig economy, firms can use people with very specific skills for individual projects, rather than relying on existing staff whose expertise might lie elsewhere. In this way, firms can be sure that they have the exact skills they need for each project to be a success.
But if you’re regularly looking for people with different skills, you’re unlikely to engender much worker loyalty to your business. Further, constant recruitment, even of freelancers, can be expensive unless you have some very slick and robust recruitment processes in place.
Access to a greater breadth of skills. For small firms in particular, using freelancers gives access to a huge range of skills on an ad hoc basis that wouldn’t be available if they had to employ those skills directly.
But you need to take care that no matter how many different individuals you contract, your company messaging is always consistent; if not, you risk damaging your corporate identity.
The growth of the gig economy offers huge opportunities and to all firms, of all shapes and sizes. However, there are some risks that need to be managed – from ensuring consistently high levels of customer service to treating all workers fairly. For help and advice on making the gig economy work for your business, contact Simon Morgan at HR Dept.