What You Need To Know To Understand The ‘Gig Economy’
As most businesses would be aware, there’s been a sharp increase in commentary around the ‘rise of the gig economy’ over the past few years, as evidenced by Google search volumes in New Zealand for the term ‘Gig Economy’:
However, the reality is that as a percentage of the total workforce, those participating in the ‘gig economy’ (i.e. those working in short-term/flexible roles as contract, temp, and casual workers) has remained relatively flat. As shown in the Australian labour market, from 2004 to 2018 the casual employee share of total employed persons has remained largely unchanged:
Source: ABS, Australian Labour Market Statistics, cat. no. 6105.0 ABS, Characteristics of Employment, cat. no. 6333.0
What this graph shows is that the nature of work that occurs in the ‘gig economy’ is not a new phenomenon, however, it has been facilitated in traditional/manual ways. What has radically changed is the impact technology is having on it, namely:
- the way in which this work is facilitated
- the ability to aggregate workers and opportunities in this sector into single ecosystems
- the transparency which can now occur
This increased interest in the Gig Economy has been fueled by the proliferation of technology platforms that connect businesses or individuals needing short-term labour or ‘on the spot’ jobs, with people seeking work, typically non-permanent employment– namely contract, temp and casual workers. These platforms have increased the visibility we have to the work arrangements that were historically managed ‘offline’ and not aggregated.
How digital platforms are shaping the Gig Economy
The way in which work is facilitated
Before digital disruption, such ‘on-demand’ work arrangements were done through temporary labour-hire firms, or directly (e.g. a single pizza shop hiring a delivery driver or a household directly hiring a cleaner).
However what has previously happened manually–finding available staff via phone calls and emails, paper timesheets and invoices, scheduling via spreadsheets or expensive rostering systems–can now occur automatically and instantly online.
The ability to aggregate workers and opportunities
Workers can now be on a single digital platform and access one to many work opportunities with one to many different businesses.
Similarly, businesses can now be on a single digital platform and access many different workers with varying skill sets and availability.
This aggregation is one the major causes for the perceived ‘rise of the gig economy’, as the platforms provide visibility to the number of people participating in this sector of the labour market and the number of services leveraging these ‘on demand’ work arrangements.
The transparency that can now occur
Digital platforms make it easier for people to identify, coordinate and carry out work to earn money or work on paid projects as and when required.
There has also traditionally been a gross imbalance of power between employers and casual employees, with employers having virtually full control over casual employees’ hours and working conditions.
Digital platforms provide individuals with greater ability to choose and control their working hours and employment choices, without any negative blowback as the platforms are unbiased and automated in how they promote work opportunities.
Digital platforms are also primarily built on a business model whereby businesses are required to provide payment details up-front, guaranteeing that workers will be paid for their service.
How Sidekicker participates in the Gig Economy
Sidekicker was established to use technology to reduce friction that existed in the hiring, management and participation in the casual employment market.
To deliver on this purpose, Sidekicker’s platform is built around two core necessities:
- Risk reduction
- Designing a platform and model that reduced the administration and compliance obligations to the businesses and workers
- Creating a higher level of transparency and control in the hiring, management and participation in the casual workforce for workers and businesses. In turn, this improves the earning potential, job fulfilment and career development opportunities for workers while improving the business outcomes achieved through accessing more relevant casual workers.
This has led to Sidekicker operating a model whereby all the staff (“Sidekicks”) who work through the platform are treated as casual Sidekicker employees.
Sidekicker is unique in the ‘gig economy’ in this respect; taking on the responsibility of the employment arrangement. By respecting existing employment frameworks and objectively applying them to the nature of the employment arrangement, then coordinating this through a digital platform, Sidekicker is;
- reducing the friction in the marketplace,
- driving integrity in the marketplace and,
- creating better outcomes for those participating in it.
Compliance is managed in the following ways:
1. Public liability and professional indemnity insurance
- Covering claims of up to $20,000,000.
2. Inbuilt payroll, award rates and Superannuation
- Sidekicker takes care of employer responsibilities including payroll, award rates and Superannuation. Award rates are built into the platform, for full transparency, businesses can see a total pricing breakdown before posting a request.
- Businesses are not charged until the shift is complete, the Sidekick has submitted their timesheet and the hirer has approved it. This ensures all necessary overtime and penalty rates are applied.
3. Right to work compliance
- Sidekicker’s permissions engine ensures that Sidekicks are only ever notified about shifts that match their skills and qualifications. Sidekicker verifies the working rights of all Sidekicks and handles work restrictions and expiry dates. Industry-specific qualifications are captured on the system and visible in the Sidekicks profiles, so businesses can hire with confidence.
The types of work which take place in the ‘gig economy’ are not new and can be categorised under existing employment frameworks and law. Over the past five years, digital platforms have aggregated much of this work which has drawn attention to many of the complexities around the labour market. However, if the relevant existing employment frameworks are applied stringently, technology platforms can make for a far more efficient, transparent and empowering experience for businesses and workers alike.