Written by
Changeboard Team

15 Nov 2016

Businesses need to catch up to the gig economy

15 Nov 2016 • by Changeboard Team

Research released today has revealed that while many businesses are embracing contingent working, more could be done to engage gig workers.  

In two surveys of large organisations (100,000 employees or more) and short-term contingent workers, Ernst & Young found that 49% of employers have used gig workers in the last five years. Some 40% of organisations expect to increase their use of contingent workers in the next five years. A quarter of respondents expect 30% or more of their workforce to be gig workers by 2020.

Some of the 73% of the 1,000 short-term workers surveyed had positive reasons for their independent work arrangement, with only 20% saying accepting short-term work due to a lack of full-time positions. Some 66% said that the benefits of such arrangements outweighed the downsides, compared to just 6% who felt the opposite. 

Tony Steadman, principal, people advisory services, Ernst & Young said: “It is well known that the gig economy is growing, but ever since the recession, many people assumed that employers just wanted to cut costs by reducing the number of full-time, permanent jobs.

“However, the survey responses suggest that organisations are welcoming gig workers as a part of their growth and change management strategies. This gig economy looks very different than the traditional picture of seasonal workers or workers who provide common services to consumers.”

Employers are beginning to use gig workers for strategic business reasons, in particular to leverage skills that are not available in their core workforce, with 56% of respondents citing it as a benefit. Helping control labour costs and overcoming resistance to change in the organisation were also factors.

Despite this, many respondents reported challenges in this working arrangement. Some 37% said they had fragmented governance in managing their contingent workforce, with 55% admitting they do not put their gig workforce through an onboarding process. 

From a workers’ perspective, while 73% enjoy the flexibility gig working allows them, there were many drawbacks. Some 58% believe that permanent staffs are treated better, with 40% saying they feel like an outsider. Many feel they are not putting their whole effort into their work, as 26% are ambivalent about their employers’ business objectives. 

Steadman added: “When talent feels unengaged or like they are treated poorly, that’s a management issue more than an intrinsic element of contingent work.

“A haphazard process toward people management may affect attitudes and impact the organization’s ability to structure its workforce effectively. It’s critical for employers to develop better methods of managing their increasingly contingent workforce and to consider some of the key HR processes and analytics that can have a negative effect on what could ideally be a mutually beneficial relationship.”