The changing face of Australian employment. The gig economy.
With 32 percent of the Australian workforce having engaged in freelance work between 2014 and 2015, it’s fairly safe to say the ‘gig economy’ is building momentum. The good news is that this new 21st century workforce has some serious benefits for employees and employers alike.
The word ‘gig’ use to be synonymous with musicians. Nowadays, it’s a common term for a much wider audience as more and more Australians choose to earn their living doing ‘gigs’, rather than working a traditional full-time job. Welcome to the ‘gig economy’; a virtual marketplace where people buy and sell their skills and services.
Today we live as a society where Uber, the largest personal transportation firm, doesn’t employ a single driver, and the largest global letting agent, AirBnB, doesn’t own a single property. The emergence of the gig economy is set to continue across the globe. A recent report from PricewaterhouseCoopers in the UK estimated that within five years, almost half of Human Resource Managers expect contractors or freelance workers to comprise at least a fifth of their workforce. These are significant numbers. This trend is not just overseas; here in Australia, data revealed that nearly 4.1 million Australians, or 32 per cent of the workforce had freelanced between 2014-15.
Consequently, businesses should view capitalising on this emerging workforce model as crucial to the success of their organisation, and start looking for ways to get ready for the significant changes heading our way. It certainly raises the question to employers about how to most effectively integrate and manage a large freelance talent pool. There is no doubt new tools, systems and processes will be required as the gig economy grows in prominence, displacing the traditional workforce. At Drake Allegiance, we have already recognised new systems are needed and have procured a new platform as a service (PaaS) technology which improves the way businesses can connect, communicate, and collaborate seamlessly with their networks online. This is the way of the future for businesses.
So why are so many saying goodbye to the fixed salary, annual leave and once highly valued company benefits? Head of Drake Allegiance, Executive Simon Gallagher states “Being around the recruitment industry for 65 years gives you a unique perspective on change. I think one of the key reasons we are seeing such a dramatic shift in favour of freelance work is being driven not only by companies but by individuals who want to improve work-life balance over what is possible in most jobs. They want more control, freedom and autonomy when it comes to work. The gig economy offers independent workers to select only those jobs that they're interested in – and that is quite a change from the traditional employment paradigm.”
The benefits are not just for gig employees themselves - companies too are benefiting in a number of ways. Aside from the obvious, such as smaller office space, reduced training requirements and lower permanent staff numbers, companies now have a wider access to talent who might have been too high-priced to maintain on staff full-time. Additionally companies will benefit from having a flexible and dynamic workforce that can be swiftly scaled up or down depending on requirements, ultimately boosting bottom line.
As good as all this sounds, a word of caution is prudent. Despite the developing gig economy presenting significant opportunities and benefits–it does not come without a number of inherent challenges, and certainly raises questions about workplace protection and what will constitute a ‘good job’ in the future. Critics of the gig economy are quick to point out the risks presented to Australia’s industrial relations systems by a lack of job security and employment conditions, including sick leave, minimum wage entitlements and unfair dismissal for workers. Current employment policies are geared towards protecting permanent employees –not the transitional workforce. Moving forward, Australia will need to ensure a clear understanding of what a ‘good job’ entails, and that policies are developed to clarify how gig workers will be treated, including their rights under the law as momentum builds.
Right now, the gig economy looks very much like the future of our workforce. Companies will need to embrace the the benefits of this emerging labour trend to remain competitive in the modern economy. As an employer, it is critical to remain abreast of impending changes to the traditional workforce, the impact it will have on your organisation, and how to best prepare.