A 'gig economy' is a job market based on short-term contracts. Companies hire workers to complete individual projects (or, 'gigs'), which can be a one-off or repeat arrangement. The upsurge in these temporary and contractor working habits is a movement that has evolved the modern employment scene and the entire concept of a workplace. An ever-growing contingent workforce has developed on a global scale, and in the UK it has been a contentious issue for government authorities and HR professionals alike.
On the one hand, the increased availability of temporary and contractual work has brought many benefits to the UK’s developing digital economy and to people seeking more flexible working arrangements, such as parents returning to the workforce. However, this type of work poses an array of new risks to employers and workers rights. In terms of corporate risk and security, many temporary workers may have access to the same level of information as permanent workers.
Millennials (those born between 1980-2000) are choosing more flexible working arrangements, wanting better work: life balance. The gig economy is ideally suited to them. The top talent can earn more money as a self-employed worker than a permanent member of staff.
The power is shifting to the worker with people more likely to see themselves as members of a particular skillset or network than an employee of a particular company.
When you dig a little deeper, it’s easy to see why. Freelance tech workers not only get paid more per hour than their permanent counterparts but also work fewer hours overall, according to our research.
A recent report from PwC into the future of work estimates that the popularity of the ‘gig’ economy will generate £45bn and 766,000 jobs for the UK by 2020. Further findings from the report revealed that within five years almost half (46%) of HR departments expect 20% of their workforce to be comprised of contractors or freelance workers.
Current employment laws were not written for the new gig economy, and as the number of gig workers grow so their voice becomes louder. Recent demonstrations by Uber and Deliveroo gig workers have made the headlines; it’s only a matter of time before MPs decide to listen to this body of voters.
But whilst this is great news for employees, what does the gig economy mean for recruitment?
Cutting Costs (P)
In uncertain times, one positive of the gig economy is that it could help recruiters to cut costs during the initial hiring process. It may also save businesses money in the long run by hiring staff on a temporary or short-term basis. Freelancers tend to promote themselves more heavily through new technologies. This makes them cheaper and easier for recruiters to find online. There are even dedicated sites and apps used by freelancers to share their expertise and availability for hire. Therefore, this ‘on demand’ and flexible working culture could make finding your next recruit, even faster!
A Bigger Talent Pool (P)
Technology and increased mobility mean candidates can accept jobs from around the world. This presents recruiters with a huge talent pool to choose from as they are no longer restricted to recruiting just from their local area. It also gives them access to a much more diverse workforce, which is great news for any business.
However, there are some downsides to recruiting globally. It may be harder to check the legitimacy of the credentials of potential candidates, or they may not be who they claim they are. It could also be the case that they aren’t as experienced as they say they are or aren’t the right fit for the company culture.
Long distance recruiting makes this harder to spot. This could lead to hiring several candidates before you find the right match.
Benching Talent (P)
Another trend that has emerged in the working world is ‘benching’. This involves putting a candidate on the back burner in case they are suitable for a different role at a later date. When using these dedicated tools to search for temporary workers, you’ll start to build your own talent pool of freelancers that you can refer to at a later date.
While a candidate may not get the role the first time around, there may be future projects or roles that they would be perfect for. Having a backlog of talented potential candidates saves time when recruiting in the future.
Competition is Tougher (N)
While a global talent pool certainly has its benefits, it also brings with it some tough competition. Where recruiters may have once only had to compete locally for candidates in their area, they are now contending with an entire web of organisations on a global scale.
This could make finding the perfect candidate even harder, as many companies are battling to offer the best incentives to secure the top talent.
They’re Only Temporary (N)
One downside to the gig economy is that it’s all about short-term and flexible working. This means you may find yourself having to recruit more often. Staff on a full-time contract are more reliable and have stronger loyalties to the business.
On the other hand, employing someone on a temporary basis means they aren’t around for long, and will at some point have to be replaced. This could mean you find yourself recruiting for more roles, more often.
The gig economy opens up a huge and flexible pool of talented candidates, from around the globe. This gives you access to a diverse range of recruits and also opens up your business to creative and innovative new staff. But the gig economy is not without its faults.
Working on a global scale makes the competition much tougher. Plus, having freelancers walking in and out of the company could mean having to frequently look for new recruits.
Overall, finding ways to secure the most talented recruits while minimising costs is at the forefront of any recruitment strategy. And, by using freelancers intelligently, recruiters can stay ahead in this ever-changing landscape.
Sources: OnRec, Sonovate, Logicmelon, CV-library.