In recent years, the so-called ‘gig economy’ has grown from virtual insignificance into an important labour market. Such a market is largely characterised by the prevalence of short-term contracts, or those involved in freelance work. In London, the gig economy has grown by a staggering 72% in the transport and storage sector since 2010. In an online survey of 2,125 Dutch adults aged between 16-70, 18% said that they have tried to find work managed via ‘sharing economy’ platforms. Well-known examples of companies that hire such freelance workers are Deliveroo, Uber or Blablacar, but there are many other firms jumping on the bandwagon. The question then is when to hire workers from this sector.
The reasons for the growth in the gig economy stem largely from the 2008 financial crash and the recession that followed. Employers began to cut benefits and wages began to stagnate. In tandem with this was a growth in technology that allowed such an industry to be practically viable. The benefits have been felt from both employers and employees. Freelance workers benefit from a flexibility which allows them to do extra work as a wage top up beside their regular job, work full time but on less rigid working hours, and experience a large degree of independence. Employers benefit from financial savings, such as not having to pay benefits, in addition to risk reduction.
As an example of just how valuable freelance work can be, consider the case of Blue Fountain Media, a web design and marketing company based in New York. The company was struggling to find enough skilled employees with the relevant technical background. When domestic supply was short, it turned to hiring freelance contractors, many of them based outside the USA. Chief Executive Gabriel Shaoolian stated: ‘Greece may be struggling with their economy, but their developers are phenomenal and they are in high demand’.According to an IPSE study of freelance workers in the UK, businesses without officially designated employees contributed about £237 billion in sales in 2015 (around 6% in private sector turnover).
There are also some downsides to hiring freelance employees. For instance, a firm will want their workforce to work according to their schedule, and not that of the freelancer. One way to avoid this would be to hire a team of freelancers in order to have backup. There is also the issue of training and supervision. If the time it takes to train a freelancer is long before they can begin work, it might be better to hire a full-time employee. Supervision may also be a problem if they work outside of normal company hours, in which case again it would be more prudent to hire regular staff. Be aware also that a freelancer is committed to the success of his or her own business venture, and not necessarily to yours.
In conclusion, there are many benefits to a company hiring freelance employees. Although use of such a workforce does not help at all levels of a company, such a sector can readily fill a skills gap within said company. Such skills include those of a managerial, professional, scientific and technical capacity. The gig economy is continuing to transform the working landscape, and now is the perfect opportunity for firms to take advantage of such a flexible labour market. This is particularly true for positions that involve short-term contracts, one-off tasks, or work that does not need to be performed in the office. In addition, there are numerous cost savings associated with hiring freelancers. The use of such outsourcing should certainly be on the strategic playlist of any company.
Adam Watson
Sources:
• http://neweconomics.org/2016/12/massive-surge-londons-gig-economy/
•http://www.feps-europe.eu/assets/778d57d9-4e48-45f0-b8f8-189da359dc2b/crowd-working-survey-netherlands-finalpdf.pdf
•http://cdn2.hubspot.net/hub/223565/file-1632266592-pdf/docs/Old_Site_PDFs/sea-of-job-seekers-some-companies-arent-getting-any-bites.pdf
• https://www.ipse.co.uk/sites/default/files/documents/research/Exploring-uk-freelance-workforce-2015-report-v1.pdf