The term “Gig Economy” is seeing increased coverage and awareness. It refers to an economy where the worker operates independently and sells labor on task-based level or on a temporary basis. “Gig” is basically a slang for “a job for a specified time period” and the reference is derived from the music industry. It’s not something totally new and unknown, because gig-based workers are basically what we know as freelancers, project workers, independent contractors and temporary workers. Obviously, this form of work sits in contrast to long-term employment contracts, and I’m sure that it’ll gain more and more ground. Well, as a matter of fact, at this very moment, I have two resources that does work for my business on a temporary basis. As business leaders, we must prepare for an increased amount of this labor format. But what impact does it have on our processes, tools and systems?
A labor market in change
This form of work and economy is becoming more and more substantial. If we look across the Atlantic Ocean, studies show that by 2020, 43 % of the American workforce will be gig-workers. Now, I’m thinking that the American economy, the general structure of the labor market and the culture, over there, animates more to this kind work, as opposed to European conditions. The term itself also comes from the States. However, other research reveals that across both USA and Western Europe, approximately 150 million people have left jobs with long-term contracts to pursue an independent freelance based work life. A large part of these workers operates through new digital platforms where labor can be offered. We all know Uber, but the trend will spread to other industries. One of the latest Danish additions is this one and as another example, we’ve also got LegalHero, who’s been around for a few years.
As said, I believe that, we’ll see a changed labor market in the future. The “Gig Economy” will place the whole labor market and all its players and stakeholders, ranging across employers to banks and mortgage providers, unions, unemployment funds, pension and insurance providers as well as the public administration, in a whole new reality. A larger independent workforce will call for very different requirements going forward. How do we secure that this type of employees is granted acceptable rights? What about social security? How will banks handle credit ratings and lending for people, where household income isn’t tied to regular jobs? There’s a lot of questions to be answered and many circumstances to account for, but for now, I’ll focus on a few thoughts about the employers, the workers and some of the core processes and tools that will be affected.
In this context, I believe it’s suitable to introduce a new term. I call it “Gig Tools”, and it refers to the fact, that both the employer-side and the worker-side must make sure that processes, tools and applications are ready for temporary and freelance-based work to a greater extent.
For the employers, there are some obvious advantages by taking in labor on a roustabout basis. It’s primarily related to fewer commitments and better options for up- and downscaling according to market conditions. On the other hand, you’ll need to be aware if there are other areas where you’ll end up creating increased administrative burdens related to use of temporary labor. You need to assess your various processes and workflows, where it’s possible that freelancers, depending on role, needs to be included in an easy way. You don’t want a large group of gig-workers that operates outside a key business process just because it’s a hassle to connect these individuals to your business systems. This could be the process related to employee expenses, like for example travel expenses, mileage, meals and representation. Of course, you can choose to cover yourself contractually in this area, but for some temporary workers, these costs will be there. And in these cases, you need to secure that your processes and applications are “Gig ready”. This accommodates new requirements to the flexibility in the actual systems, to the flexibility in the supplier contracts and finally, the user friendliness of your systems. Ultimately, you don’t want to end up spending to many resources onboarding your gig-workers to your tools.
For the workers, we’ll also see an increased number of dedicated “Gig Tools”. In other words, applications that are designed to help individuals run their small freelance businesses. There’s already a lot of tools on the market, that’ll help with communication, productivity etc. In all modesty, I’ll also have to mention that Acubiz has a “Gig Tool” on the shelf. We’re talking about our 100 % mobile-app based single-user solution, Acubiz Professional. It’s a simple and intuitive tool that help the user with expense and mileage tracking. The tool is designed for independent contractors, self-employed people and freelancers, in other words gig-workers. The user can generate reports displaying expenses and mileage, that can be shared with a temporary employer, a bookkeeper, an accountant or whoever it might be relevant for. The user can generate reports displaying expenses and mileage that can be shared with a temporary employer, a bookkeeper, an accountant or whoever, it might be relevant for.
Be ready for the giggers
As mentioned earlier, you’ll have to tune in on the fact that gig-based work will be more and more common. So, whether you’re an employer or a worker with a crush on this format, you’ll need to prepare. And processes and tools are something that you cannot overlook.