Ever wondered where the name ‘gig’ economy started? Interestingly it came about in the jazz musician community, who performed ‘gigs’ in America’s jazz clubs in the early 1900s. And this style of working grew in the US during the Great Depression.
The concept of the ‘gig economy’ means a labour market characterised by the prevalence of short-term contracts or freelance work as opposed to permanent jobs. Individuals have greater work flexibility but without the benefits of the employed, such as healthcare, pensions and paid holidays. Surprisingly, it’s nothing new—people have been working this way for more than a century.
The gig economy of the digital age
But in recent years the notion of ‘gig’ workers has gained mainstream attention as Airbnb, Uber, Deliveroo and countless other digital platforms have made securing ‘gigs’ for self-employed workers much easier. For example, 1 in 3 US workforce now opt for a gig economy lifestyle.
The gig economy of the digital age and the number of gig workers have grown so fast, policy and regulations to protect gig workers are still catching up. But from what studies tell us, the gig economy is here to stay.
A new report released by Aon last week, Gig Economy: Financial Security or Greater Control, (for which 200 HR Directors were interviewed) found that 26% 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 5 years’ time.
We can expect hiring contractors will continue to grow in popularity, not only for employers like Uber and Deliveroo, but within other sectors as well. For example, the Aon report found that the tech sector has the most acute competition for gig workers with 68% of HR directors saying competition is increasing.
With this report having been produced over the Covid-19 period it’s likely to have factored into HR leaders’ responses. “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” says Matthew Lawrence, Chief Broking Officer, Health Solutions, EMEA, of Aon.
As the economic impacts of the health crisis become clearer, employers will need to consider all options to keep businesses operating and competitive. As Lawrence suggests, “The gig economy offers a unique opportunity for those who…quickly [need]to innovate or who require staff on an on-demand basis.”
The benefits and downsides of gig working
The reasons why people become gig workers vary and are influenced by job and economic markets (as we’ve seen historically), but there’s also an element of personal choice. We’re seeing a cultural and ideological shift happening where people are seeking greater work/life balance, which the flexibility self-employment can offer.
Along with HR Directors, 150 B2B/white collar gig workers and 150 B2C/blue collar gig workers were also interviewed for the Aon report. What the findings uncovered is that 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.
So whilst having more flexibility, autonomy and work/life balance can be achieved through becoming a gig worker, all positives for our wellbeing, there’s still the downside that the majority of contractors sacrifice job security, paid holidays and benefits packages for being one’s own boss.
This includes access to workplace wellness programmes offering financial wellbeing support; mental health training, resources, support tools and counseling–which normally only full-time employees can utilise.
You might think it would be as easy as gig workers self-insuring for benefits, but as Anthony Beilin explained to us in a March issue, ‘Current insurance products for the self-employed are very expensive. This is because every individual is risk assessed on their own, rather than their risk being pooled as part of a large group like employees are’.
Aon’s findings tell us that 54% of gig workers are worried for their financial future, with 67% who’d feel more positive towards the organisation if benefits were in place. Only 31% who were interviewed were offered benefits within their contract.
How can companies support the wellbeing of their gig workers?
What it boils down to is that gig working is not a simple win-win. There’s an increasing business reliance on gig workers to help to stay lean and responsive, and an increasing population of people seeking more flexibility and balance in their lives.
Aon’s report revealed that nearly all HRDs believe providing health and benefits packages would improve gig worker recruitment (94%), engagement (93%), productivity (88%) and retention (95%). Suffice to say it would also improve gig worker wellbeing.
‘It can cost a gig platform less than the price of a cup of coffee per week to give a worker income protection [through a collective benefits platform],’ says Anthony Beilin.
What could compromise look like?
While not all employers will be able to afford to offer standard health or collective benefits packages just yet, there are progressive employers reliant on contractors who are finding creative, low-cost ways to offer other wellbeing initiatives to all staff, irrelevant if full time or a contractor.
One such example is Wimze, an NYC-based creative content agency for mission-driven wellness brands employing majority gig workers. Co-founder & Chief Strategist, Taylor Rohwedder (who’ll be a speaker at Make a Difference Summit 15 October) introduced a wellbeing support initiative where every new hire is provided with a “User Manual”.
It’s essentially a how-to-work-with-me type of guidance, inviting new team members the choice to share about their personal work style and how they prefer to coexist in a workplace. It’s a highly effective, cost-free way to promote an open culture around mental health and wellbeing in a workplace, similar to the better known Wellness Action Plan promoted by Mind in the UK.
Wimze also includes all workers in discussions on what wellbeing activities they’d most benefit from, offering options from group yoga and community volunteering events to unlimited personal self-care days. None of which are a great expense to the employer but have paid dividends to engagement, retention, wellbeing and sense of purpose for Wimze’s gig workers.
How can we support the wellbeing of gig workers today & what does the future hold?
Aon’s Matthew Lawrence offers a realistic outlook: “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.”
Whilst we continue finding our way forward in the Covid-19 recovery, it will be some time before positive legislation providing more rights and protections for gig workers take hold. In the meantime the statistics in Aon’s study clearly tell us there’s a large proportion of gig workers still keeping our economies going. And we are seeing this just outside our doors.
Think about your Deliveroo, Glovo and Uber Eats delivery workers who made health sacrifices at the height of the crisis to help us enjoy a taste of the outside world within our homes. Workers across the globe are struggling with poor wellbeing and mental health as a result of the crisis, but it doesn’t seem fair that only those with active benefits plans are privileged with receiving wellbeing and mental health support from their employers during this difficult time.
While we wait for the post Covid-19 evolving workforces and workplaces to emerge, companies currently employing gig workers could seek low cost ways to support the wellbeing of these valuable workers. Who’s to say why a few multinationals couldn’t take on board some valuable learning from a small NYC digital agency who, with a bit of creativity and foresight, have struck the balance of supporting the wellbeing of their gig workers for the overall benefit of the company?
For full details, read Aon’s May 2020 report.
About the Author
Heather Kelly is the founder of Aura Wellbeing, a consultancy providing workplace wellness strategy, coaching and training services to employers. She’s also Content Director for Make a Difference Summit US and Online Editor for Make a Difference News. Heather led the development and operation of the Workplace Wellbeing Index, during her time working for the UK’s largest mental health charity, Mind. In her earlier career she worked as a photographer, a journalist and a senior manager in the insurance industry. She’s passionate about inspiring more empathy and awareness in workplaces toward normalising mental health and in her spare time Heather teaches photography to teens as part of a charity projects in London and Spain, she’s an avid runner and experimental chef for recipes promoting healthy minds.