The gig economy — What does it mean for employers?

There are several factors that have subconsciously promoted the gig style of employment 

IF ONE views the 20th century with an analytical lens, one is already able to see the advent of what appears to be the semblance of a gig economy playing out as early as the early part of the 20th century. The Great Depression years of the 1930s led to sporadic full-time works and subsequently, to the rise of labour agencies whose focus was predominantly to deal with the fulfilment of temporary work opportunities. The rise of the Internet in the 90s and the global outsourcing agenda of the 2000s led to a theme where ownership of resources were reviewed, re-considered and re-engaged on very different terms. This included not only the technological systems but also the human capital element as well. 

The online tech platforms of the 2020s which supported seamless work-from-home opportunities as well as virtual communications between the living rooms/personal studies of individual employees and their respective offices have made it that much easier to be a “gigger”. Giggers are those whose work is performed for a predetermined amount of time during the course of a project to a wider range of people whose jobs are made easier by the use of online platforms or technology. 

It is also interesting to note that a variety of global crises — the 2008 financial crisis, MERS (Middle East Respiratory Syndrome), Zika, the Covid global pandemic, among other things — had implications on the way in which businesses functioned, operated and managed their staff. The availability of platforms to work from, the changing business operating models that are prevalent, the ability to work from anywhere, and the support provided by the organisation for a variety of working environments have allowed the employees unfettered access to job opportunities that have never before existed. What we are witnessing right now is the sweet spot created by the convergence of a variety of factors. 

The growth of the giggers has been especially notable throughout the course of the recent few years. It is anticipated that more than 50% of the workforce in the US will be based on gig work by the year 2030. The gig economy is clearly here to stay, and it’s estimated that this sector will be valued at US$455 billion (RM2.14 trillion) by 2023 with a compound annual growth rate (CAGR) of almost 18%. Forbes has called them “the workforce of the future”. The implications of this on the very structure of employment and the workforce will be significant. The corresponding implications to the Asia Pacific and to Malaysia, in particular, will be intriguing. 

There are several factors that have subconsciously promoted the gig style of employment, and they include the following: 

The independence accorded to employees to carry out their work responsibilities in the best manner that they see fit and to the extent of their choosing; 

The very thin and unbroken line between one’s work life and the personal life. Over the past two years or so, we have witnessed office work being done in living rooms, at dining tables, at playgrounds, as well as at coffee shops; 

The availability of and engagement with pervasive easy-to-use communication and knowledge-sharing platforms; 

The sudden realisation that there is an ability to generate additional revenue from proverbial “side hustles”; and finally, 

The notion of income security now taking on precedence over job security. To this end, it matters not where one works nor how many jobs one has, so long as there is the required income coming in on a monthly basis to sustain the lifestyle of the gigger. 

All indicators show that the gig economy is set for exponential growth over the coming years, and thus as employers and leaders, we need to be asking ourselves some of the following critical questions: 

With the nature of “fractal” employment being what it is, how would giggers view the terms of such employment, what relationships can they enter into with organisations in a manner which negates potential conflict of interest at best, or where such conflict is duly mitigated, at worst? 

From an organisation’s perspective, how would it view the effective management of giggers, bearing in mind that they are no longer part of the permanent workforce of the organisation? 

Who will be responsible for the development of talent? Is it the organisation or the giggers themselves? Afterall, if the talent is no longer “owned” by the organisation, does it still have a responsibility to ensure that it is developed accordingly? Are organisations now absolved of such responsibilities of talent development altogether and does this area now rest squarely on the shoulders of the employees for their future professional development? 

Given that this realisation leads to the distinct possibility of giggers being able to transcend themselves to playing in a variety of geographies, we are left with pertinent questions around compensation and recognition of their work. Who will be responsible for their in-country tax filings and the relationship with the taxman? What will the hourly rates be? 

And finally, the implications to what is commonly termed as yearly Compensation and Benefits Survey that is conducted to determine the coming year’s market pay lines. Now that there may be a disparity of standard information given the gig play, how would organisations manage this for purposes of ongoing commonality of rewards data. 

With the changing work arrangements and demands of employees, with the revitalisation of the business operational models given the aftereffects of the proverbial perfect storm that we have just experienced and are coming out from, with the need of a more effective management talent, there are just so many questions that are up in the air for now. Who is to say what the right answers are. 

What is crystal clear is the constantly changing demands of a workforce with the advent of yet another new generation entering into it and concurrently, a very different business environment that has shifted gears over the past 24 months. The days of employee loyalty have long gone and those of a single job for a single wage is fast coming to an abrupt halt. Employers must mature in their thought process to capitalise on changing environment that they find themselves in, else left behind they will be. 

Taranjeet Singh is the CEO of Quantum Steppe Advisory and regional board chair of the Chartered Management Institute Malaysia. 


  • This article first appeared in The Malaysian Reserve weekly print edition

RELATED ARTICLES

Wednesday, December 22, 2021

Omicron could restrain economic recovery

Wednesday, December 29, 2021

Ringgit to gain momentum in immediate term

Wednesday, July 26, 2017

UK factory output hits 2-decade high