Chances are you’ve probably heard someone talking about the gig economy. You may have thought it’s just another passing business trend or doubted whether it’s something that’s going to affect your company. Or maybe you’re baffled by what the phrase actually means! Well, the statistics show the gig economy is here to stay. The trend is causing a major change in the traditional foundations of the global economy and contrary to its name it has very little to do with music gigs.
What is the gig economy?
The gig economy refers to the increasing tendency for businesses to hire independent, self-employed contractors as opposed to permanent staff. The word ‘gig’ refers to a one-off job. In Singapore, it’s also referred to as “freelancing.” And it’s skyrocketing! At an annual conference hosted by NTUC Freelancers & Self-Employed Unit in August this year, it was reported that the number of Singapore residents who took self-employed work grew to almost a quarter of a million people. That’s a 10% increase from 2017.
Read on, because we’re not just talking about Grab drivers and Food Panda deliveries. Many highly skilled, mid-career professionals are also making the switch! In fact, a report by McKinsey in 2016 found that knowledge-intensive industries and creative occupations are the largest and fastest-growing segments of the gig economy.
Supported by the rise in technology, the widespread growth of start-ups and the growing support from government bodies this new employment model is complementing the traditional workforce.
Sue is a gig worker who left a multinational corporation to set out on her own. Suddenly she’s able to select which jobs she wants to work on and can deepen her skillset by working with multiple clients across multiple industries.
Companies engage Sue when there’s a skills gap in their existing workforce. Demand for skills can be cyclical in nature and often her clients don’t need a permanent staff member so they engage Sue on a short-term basis – the company benefits from the flexibility of a gig worker as much as Sue does.
After years of being a gig-worker, Sue is accustomed to working solo and she knows it’s in her best interest to be reliable and exceed expectations. Sue lacks the time for office politics and agenda-less meetings and gets the work completed well ahead of schedule so that she can move onto her next job. For Sue, time is money. With a fresh set of eyes, she’s also not burdened with pre-conceived attitudes, she’s more receptive to embracing new technology, and cutting-edge ideas and thus her work is jaw-droppingly good.
When you look at it this way, it’s hard to ignore the benefits of this powerful new workforce. But let’s not be naive for all the advantages, it does open the door to new challenges.
The challenge of hiring gig workers
While you might be excited by the typically shorter and less complex recruitment process of hiring a gig worker, companies need to ensure the competence, safety and integrity of the person they hire so as to take basic steps to protect their business. The temptation is to reduce the lead time to getting these workers fully productive but with more hands having access to your company’s internal information, financial assets, and valued customer and employee details, skipping background checks may not be a wise idea. You need reassurance that the gig workers you hire are reliable and trustworthy.
Uber is one company who experienced a boom in hiring freelance drivers and is now ramping up employee screening strategies after a stream of sexual misconduct allegations resulted in negative publicity and litigation globally. Their aim is to not only protect their brands’ reputation but also to keep their existing employees and customers safe.
The bottom line is a robust background screening policy is common for traditional jobs, so there’s no reason it shouldn’t apply to gig workers. No matter who you’re hiring and in what capacity, employers still hold the basic duty to hire with due diligence. An employer is negligent if they hire someone who they either knew or should have known, was dangerous, unfit, or not qualified for the position. This is especially true for gig workers as contracts with employers are often not subjected to the same stringent contractual clauses or code of conduct as compared to an employment contract with a formal employee.
There is, however, one difference. When it comes to gig workers the process often moves quickly. There’s little downtime between accepting a contract to starting the project. This means background screening for a gig worker needs a rapid turnaround time.