How the gig economy is changing work

Characterised by short-term contracts and freelance work, the gig economy is revolutionising how we live, communicate - and work. The traditional employment landscape no longer looks like rows of workers in an office but, instead, flexible working options.

Workers can now take advantage of job opportunities and working agreements that were previously not open to them, while businesses have access to more diverse talent, made available to them through the gig economy.

And because the way we're working is changing, workforce management has had to adapt to meet demand. How? Let's find out.

What is the gig economy?

In its simplest form, the gig economy is where individuals are hired on a temporary or project basis to perform specific tasks and services. Instead of having permanent employees, businesses can source the talent they need without committing to full-time contracts.

The gig economy offers more flexibility for workers because they can work with numerous companies instead of just one employer.

The name comes from the music world, where musicians take on individual performances or gigs, but there are different forms of the gig economy for workers today.

Online platforms

Online platforms are great for connecting service providers and consumers through digital marketplaces. Popular platforms include freelancer sites like Fiverr and Upwork, which gives many gig workers, such as freelance writers, designers and other professionals, the opportunity to meet new clients.

 Food delivery apps, ride-sharing services like Uber and Lyft and accommodation rentals like Airbnb are also examples of online platforms that allow people to work for themselves.

Freelancing

Freelancers are self-employed people who offer their skills or services to multiple clients on a project basis. They often work remotely and have flexibility in choosing their clients and projects.

While many freelancers use platforms like Upwork, they may also advertise their services through websites and social networking. Freelance work can involve working on short-term projects or becoming a long-time partner of a company.

Task-based work

Task-based work is also popular, as it involves performing specific tasks or micro-jobs, often sourced through online platforms. Typical duties include data entry, content writing, graphic design or small errands.

Crowdworking platforms such as Amazon Mechanical Turk and TaskRabbit facilitate this type of work, but they often don't pay much, so they're not as popular as other forms of gig work.

On-demand labour

Companies in industries such as delivery services, home services and hospitality hire workers on short notice to meet immediate customer demands. These workers are usually classified as independent contractors and may work irregular hours.

Popular examples of on-demand labour include the retail sector's use of extra staff during busy holiday seasons and restaurants for peak times.

The healthcare industry regularly uses agency carers and locum nurses when needed, and many workers choose to join agencies because they have more flexibility and a higher hourly rate.

Why is the gig economy so popular?

According to Standout CV, the UK gig economy workforce is now estimated at 7.25 million, with over one third of young people returning to work, post pandemic, entering into the gig economy. So with such a growing area, businesses will have to adapt to new ways of working.

So, what's caused the huge shift in working trends?

Workforce demographics

Previous generations were raised with a work hard, save hard mentality. The Baby Boomers are classic examples of this mentality; many were happy with stability and job security. 

However, the Millennial generation has different priorities and seeks a work/life balance.The flexibility of the gig economy appeals to Millennials, who now dominate the workforce. Gen-Z workers also seek autonomy and experience, so freelancing or becoming a contractor continues to grow in popularity.

Economic changes

The economy is changing, and living costs are at an all-time high. Many full-time employees turn to gig working on the side to supplement their incomes.

Having a side hustle gives people the opportunity to make some extra money, and they might decide to continue working from home or look for more flexibility because there's more earning potential.

Technology continues to evolve

Perhaps the most significant contributor to the growing gig economy is our technological society. Tech allows shift workers to connect remotely, rather than having to go site, enabling seamless collaboration and communication, even when people are working in different locations. 

The impact of the gig economy

The gig economy has many positives, but it's also brought about significant changes to workforce management practices. Some businesses see these new challenges as opportunities, while others aren't sure how to navigate them.

Some key impacts and challenges of the gig economy on workforce management include:

Workforce flexibility

The gig economy provides businesses with increased flexibility in managing their workforce, allowing them to scale up or down quickly by hiring gig workers to meet fluctuating demands.

The good news is this flexibility allows businesses to respond more effectively to market changes and reduce labour costs.

Diverse workforce composition

With the inclusion of gig workers, businesses have a more diverse workforce. Traditional employees and gig workers may have different expectations, motivations and work arrangements.

Managing this diverse workforce composition requires a tailored approach to address both groups' specific needs and preferences.

Talent acquisition and retention

The gig economy offers access to a deeper talent pool, allowing businesses to tap into specialised skills and expertise, hiring gig workers for specific projects.

However, attracting and retaining independent workers may require different strategies than traditional employees. Effective talent acquisition practices need to be in place to attract gig workers and build long-term relationships with them.

Compliance and legal considerations

Managing a workforce that includes traditional and gig workers brings compliance challenges. Businesses must navigate the legal complexities of worker classification, tax obligations and employment regulations.

Misclassification of gig workers as independent contractors can lead to legal and financial consequences. Some freelancers will also charge more because they don't have access to the benefits such as health insurance that employers often offer.

Best practices for managing gig economy workers

When thinking about managing gig workers successfully, there are numerous things to consider. Best practices to help you successfully manage any gig or freelancer or contractor, and create better professional relationships include:

Effective communication

Effective communication is about establishing clear and open lines of communication with all workers, regardless of whether they're full-time employees or contractors.

Ensuring everyone understands their role and can contact the necessary people paves the way for better working relationships.

One of the best ways to do this is by utilising technology such as project management apps and messaging platforms.

Flexible scheduling

The idea of gig work is to keep it flexible, which usually means giving workers control over their schedules and deadlines.

One of the main reasons people choose to work in a freelance or contractual capacity is the autonomy it offers, and it's your job to give people that control.

Failing to do so could mean gig workers choose other clients, so always be open-minded when planning projects and liaising with workers.

Fair compensation practices

Fair compensation practices build trust, motivate gig workers and contribute to the retention of talented individuals. Ensure fair compensation for gig workers based on their value to your business. Establish transparent payment systems and communicate the rates, payment terms and any additional bonuses or incentives.

Inclusive onboarding and training

Your onboarding processes should be inclusive of both gig workers and traditional employees. Many employers do this by creating online videos or utilising other tools, but if you want to keep your contractors around, it's vital to foster a sense of belonging and loyalty among all workers.

Foster collaboration and teamwork

Creating a collaborative work environment encourages traditional employees and gig workers to work together as a cohesive team. Encourage cross-functional collaboration, knowledge sharing and mutual support.

Apps such as Slack and other communication tools can bridge gaps between different work arrangements and enhance overall team performance.

Recognise and appreciate contributions

Just because someone's a gig worker doesn't mean they don't deserve recognition for their services. Showing appreciation can improve worker attitudes and make them proud to offer you their services.

Even a simple thank you email can go a long way, but you can also develop an incentive scheme that rewards people for their contribution to your company.

Unsure of how to manage your gig workers? Take a leaf out of these books

So, the big question is; how do you implement all of the above tips? If you're new to gig working or aren't sure how to communicate with contractors, shift workers or freelancers, these companies will inspire you.

Not only are they paving the way for small businesses to adapt to changing working trends, but these companies show how others can reap the rewards of making the workplace a more flexible space.

Airbnb

Airbnb needs no introduction; the company has both traditional employees and gig workers providing accommodation. The platform's success lies in prioritising effective communication and allowing hosts to set their own rates.

TaskRabbit

TaskRabbit connects individuals with various tasks, but it's a rare platform focusing on flexible scheduling and fair compensation. Gig workers on TaskRabbit have control over their availability and can choose assignments based on their preferences.

The platform ensures fair compensation by setting minimum hourly rates for different task categories.

Encore Care Homes

Encore Care Homes sets itself apart from other providers by offering high-quality care to individuals within their homes. The management team relies on proper scheduling to manage care workers who aren't in an office but are regularly on the road.

Using scheduling software, Encore Care Homes can quickly make schedule changes using instant alerts and automation features.

Being able to generate reports and identify any patterns also helps the company to plan ahead for any potential shift issues that might occur.

PwC

As a professional services firm, PwC successfully integrates gig workers into its workforce management practices. They emphasise inclusive onboarding and training, ensuring gig workers receive the necessary support and resources to contribute effectively.

PwC also fosters collaboration by integrating gig workers into project teams, leveraging their specialised skills.

Pasta Evangelists

Pasta Evangelists use staff scheduling software to stay in touch with gig workers and delivery drivers, ensuring they maintain the company's strong commitment to customer service.

By automating processes such as scheduling and logging time, managers can focus on continuing to build a successful, dedicated company that prioritises experience.

The role of technology in managing a gig economy workforce

Technology is crucial in managing a gig economy workforce, enabling businesses to streamline management processes, overcome geographical barriers and efficiently coordinate and communicate with gig workers.

Here's a closer look at the role of technology in managing a gig economy workforce:

Streamlining workforce management processes

In today's technology-driven world, it's hard to imagine being able to survive without computers, smartphones and apps. There are so many digital tools that streamline and automate a variety of workforce management processes.

From onboarding, talent acquisition, scheduling and time tracking, technology simplifies daily operations and makes it easy to keep in touch with remote workers.

Managing a geographically dispersed workforce

In the gig economy, workers are often located in different geographic locations, but it's easy to find top talent worldwide now. Gig economy platforms enable businesses to find contractors and freelancers quickly and easily.

Technology also makes it easier for managers to monitor their team's productivity and address immediate business needs. 

Communication and collaboration tools

Technology provides various communication and collaboration tools to facilitate real-time interaction and information sharing.

Instant messaging apps, such as Slack video conferencing platforms including Zoom and Skype and project management software allow managers, traditional employees and gig workers to communicate, exchange updates, share files and collaborate on tasks.

These tools help bridge the gap between remote workers and create a cohesive work environment.

Workforce management software

Dedicated workforce management software solutions help businesses manage gig workers alongside traditional employees. These platforms offer scheduling, time tracking, performance management, analytics and payroll integration features.

For example, Planday is an employee scheduling tool offering numerous features that make your day work better.

With a detailed planner, automated updates and a punch clock to track remote work, it's paving the way for forward-thinking companies to reap the benefits of a flexible workforce.

Mobile applications

Mobile applications are increasingly popular for managing gig workers. These apps provide gig workers with access to their work assignments, communication channels, task updates and performance feedback.

The great thing about apps is they enhance convenience and flexibility for gig workers who can easily manage their tasks and stay connected while on the go.

The future of workforce management in the gig economy

According to the Low Pay Commission, around 1.6 million people in the UK were on the minimum wage in 2022. As more people seek flexibility in their working lives, and with freelancers and even temporary workers often making far more money than the national minimum wage, the gig economy will continue to grow.

Technology has already played a massive role in changing work patterns and improving work/life balance. As the gig economy grows, we can expect to see more tools that make it even easier to collaborate and connect.

Automation and digital platforms will streamline administrative tasks, facilitate communication and collaboration and enhance the overall efficiency of managing both traditional and gig workers.

We also need to factor in the sheer power of AI tools and how advanced they'll become. There's no definitive way to predict what will come in the next few years, but if the past decade is anything to go by - anything can happen.

The bottom line

With so many workers wanting to enjoy more flexible schedules, the full-time employment status is no longer as important.

Yes, the gig economy is changing the global workforce, but companies that understand the benefits of this new way of collaborating can enjoy plenty of cost savings and build working relationships with talented people from all over the world.

Managing a gig economy workforce might seem challenging, but the right technology will streamline daily operations and let you focus on the most important thing; growing your business.

Whether you're looking for potential workers on a temporary basis or want to connect with freelancers, the gig economy will prove beneficial for your business. 

With software such as Planday to help you adapt to the new gig economy and manage your workers, nothing will hold you back. To find out how Planday could help you, sign up for a free 30 day trial now.