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  • Gig economy set to grow, but employers should be wary of HR ‘blind spots’

    Twenty-six per cent of European HR directors believe their workforces will have 51-75% of gig workers in five years’ time, while 18% of UK HRDs believe 75% or more of their workforce will be made up of contractors in the same period.

    That’s according to the Gig Economy: Financial Security or Greater Control report from AON, which says nearly all HRDs believe providing health and benefits packages would improve gig worker recruitment (94%), engagement (93%), productivity (88%) and retention (95%).

    The report was developed from 500 interviews with three groups of people: 200 HR directors, 150 B2B/white collar gig workers and 150 B2C/blue collar gig workers.  They were interviewed from across the UK, Netherlands, Spain, Germany and France.

    The report concluded that:

    • Alongside the more traditional B2B gig workers, there is an emergence of B2C gig workers, who connect customers to products and services. Examples include Amazon, Deliveroo and Airbnb.
    • Gig working is not a simple win-win. There’s an increasing business reliance on gig workers to help to stay lean and responsive, yet 54% of gig workers are worried for their financial future, 67% would feel more positive towards the organisation if benefits were in place, while just 31% are offered benefits within their contract.
    • The tech sector has the most acute competition for gig workers; 68% of HR directors say competition is increasing.
    • Gig working is not a temporary solution, nearly 50% of all B2B and B2C gig workers have been so for three years or more, suggesting an active career choice (29% have worked as a contractor for 3-5 years and 18% have worked as a contractor for 6-10 years). Nine in 10 gig workers split their time between only one and three companies at a time.

    Matthew Lawrence, Chief Broking Officer, Health Solutions, EMEA, at Aon, said: “The gig economy is not new, but events have been driving its growth over the past decade – including a global talent crunch, an ideological shift towards a greater work/life balance and the need for an on-demand workforce. Now, with the COVID-19 pandemic, it’s clear to see why the gig economy has disrupted traditional workforce models and will continue to transform future labour markets.

    “In particular, the pandemic exposes a potential vulnerability of those working in the gig economy. Many people are curious to see if this crisis will accelerate potential legislation affording gig workers more labour rights and protections or whether the autonomy and flexibility it offers becomes less appealing for workers as the anticipated economic contraction takes effect.

    ”However, this way of working may become more appealing for employers looking to hire the talent needed to transform and innovate. It offers employers the ability to keep the workers they specifically need, at a specific time.”

    The report details three particular issues making it necessary for businesses to prepare for changes:

    • Regulation is likely to get stronger because of gig working’s increasingly transactional nature. Vocal champions of workers’ rights from within governments, unions and from workers themselves are shining an increasingly intense light on HR practices.
    • Competition for highly technical and specialised talent is outstripping supply, particularly impacting small to medium enterprises that may not be able to offer top salaries or lucrative stock options.
    • Organisations may have knowledge gaps about an increasingly large part of their workforce. Having a clear understanding of people working for them helps drive performance outcomes and solve critical business challenges.

    Lawrence added: “Overall, HRDs are expecting a higher percentage of contractors to make up their workforce by 2025. HRDs in the UK and Netherlands are the most likely to think their workforces will comprise over 75% contractual workers; 18% of UK HRDs believe this and 30% in the Netherlands.

    “The gig economy offers a unique opportunity for those who need to increase the scale of their operations quickly to innovate or who require staff on an on-demand basis. But levelling the playing field between traditional and gig workers should be a critical factor in future people management strategies.”

    Access the full Gig Economy report here.

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    AUTHOR

    Stuart O'Brien

    All stories by: Stuart O'Brien

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