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Experts publish report on how the gig economy can be a boon to employers and employees
The gig economy and zero hours contracts sometimes get a bad name. There can be a perception that they give too much power to employers and leave employees with too few rights.
But the picture is more complicated than that. ‘Atypical working’ as it’s known brings tons of flexibility for workers who can pick and choose which gigs they want to take. And it affords bosses the opportunity to innovate. Being nimble in the modern economy can be key to staying afloat.
The report outlines what an atypical worker is – essentially anyone who works in a way that does not conform to the standard, or typical, model of full-time, regular, open-ended employment with a single employer over a long time span. Its main forms are zero-hours contract workers, agency workers, self-employed contractors, gig workers and people employed on short-term contracts.
The report says there has been a “polarised” debate around atypical working, with a focus on one-sided flexible working where employers control the ‘flexibility’ of a person’s schedule and work is insecure with few rights. Yet CIPD research found atypical workers often feel they have more control over their hours and enjoy the flexibility it affords them.
The report gives employers examples of emerging best practice around managing atypical workers and workforce planning, for instance, using atypical workers to plug gaps during busier periods. Some of the areas it highlights are those around employment status, choice – particularly for zero hours workers, opportunities for training and development, support for managers, fairness and ensuring atypical workers have a voice.
It states: “At the heart of managing atypical workers in an ethical manner is fairness. This means employers need to ensure that, for example, where atypical workers work alongside regular employees, employers treat them equally, providing comparable rates of pay or appropriate compensation if shifts are cancelled with little or no notice.”
Ben Willmott, head of public policy at CIPD, says it can be hard to get a good picture of how many people in the UK work in the digitally-enabled gig economy. CIPD’s research suggests it is around 4% of working age adults who do paid work on digital platforms, excluding eBay sellers and the like.
He adds that atypical working has always existed to some extent, but that there are certain demographic factors driving current demand, including the ageing workforce, a greater number of workers with caring responsibilities, more people with health conditions and more people looking to downshift in the lead-up to retirement or to work beyond retirement to boost their pension or savings. “Such factors will mean employers have to think about how they use atypical workers so they can attract and retain skills,” says Willmott.
At the moment Willmott says the figures suggest most workers are using gig working to supplement their income, not as their main form of employment.
Only 25% of workers say a gig job constitutes their main income. “We need to understand what is driving people. Where we need to be concerned is when people are in the gig economy because there is no alternative. The issue of choice is critical,” states Willmott.
Currently he says most people are choosing to work in the gig economy, but he adds that that doesn’t mean there shouldn’t be concern about the significant minority who would rather be in regular employment.
However, he thinks that rather than, for instance, banning insecure work, given benefits such as making it easier for certain people to work, it is better to work to improve the quality of jobs on offer.
“There are people with health conditions, for instance, who can do gig jobs, but could not do a permanent job. However, there must be safeguards so people are genuinely opting in and to ensure flexible is not one-sided,” says Willmott.
He cites, for instance, a government consultation which includes a right for gig workers to ask to switch to more regular hours, something pioneered by McDonald’s, and to be given reasonable notice of changes to their shift pattern and compensated for cancellation of shifts. Willmott cites figures showing 40% of zero hours workers report that their shifts have been cancelled with little or no notice. “That is not acceptable and they are not being compensated for it,” he says.
The CIPD is consulting on what its members think is ‘reasonable’ notice. The issue of compensation is also being considered. Willmott thinks a proposal to pay atypical workers higher wages in recognition of the insecurity they face could prove difficult for smaller SMEs who are already struggling to pay the National Minimum Wage. He would prefer to see compensation paid for acts of unfairness, such as cancelling shifts at very short notice.
Another issue which the CIPD is keen to highlight is workers’ awareness of their rights. “There is a lot of uncertainty, for instance, over employment status and what that means with regard to your rights and that definitely needs more attention,” says Willmott. He would like to see a widescale know-your-rights campaign.
In the report on atypical working the CIPD outlines how employers can improve their workforce planning in line with modern demographic drivers, including through optimising flexible working for their existing employees and ensuring they manage the relationship with any contingent workers they might need in a fair way. “If they don’t do that then it will not be sustainable,” says Willmott. “As far as possible it needs to be a win win for employer and worker.”
In addition to being fair, they should also ensure contingent workers have a voice, for instance, using online fora for remote workers, and that managers are trained in the importance of best practice.
Willmott adds that it needs to be recognised that SMEs often don’t have the capacity to do workforce planning and have little or no HR expertise. The CIPD has done pilots in Glasgow, Stoke and Hackney where it provides SMEs with free HR support, including the basics like help with drawing up contracts and job descriptions.
“They are often in survival mode, muddling through, not prioritising the people aspects of their business. That means they run the risk of running into employment-related issues and of people leaving,” says Willmott.