Fuelled by digital technology, the gig economy – a workforce characterised by short term contracts and freelancers – is exploding. According to the PWC 'Future of Work' report, the sector is expected to be worth $63 billion (£42.1 billion) worldwide and £2 billion in the UK alone by 2020.
Nearly half (46 per cent) of HR professionals participating in the PwC study expected contractors and freelancers to account for a fifth of their total labour force by 2020.
Isn't the gig economy all about unskilled labour, working zero-hours contracts?
Simply put, no. For small and medium businesses, the freelancer model is about employing skilled, expert workers on a temporary basis. Using this flexible workforce is a way to reduce costs by saving resources, enabling firms to invest in specific projects when deeper expertise is needed.
There is also less emphasis on location when recruiting talent for projects, which widens the available talent pool substantially.
How can your business leverage freelancers?
Many businesses are already starting to harness disruptive digital technologies to make a success of using contractors. But firms must make changes to adjust to this new digital world if they are to fully enjoy the rewards.
So, how can this be done?
Firstly, it's key that companies consider how they integrate the right technology in the workplace for today's digital nomads.
Companies will need to adapt work environments including corporate real estate, the network, technology, and HR to suit evolving needs. For example, full-time freelancers want a high degree of autonomy, work schedule and location flexibility, and a good work-life balance.
The right collaboration technology is what makes this all work, meaning freelancers are free to work remotely and still seamlessly integrate with your existing workforce.
Co-working spaces and freelancers
Co-working spaces give companies the opportunity to reduce operational expenditure (OpEx) and add and remove workers from the space according to business needs. These shared workspaces offer greater flexibility and efficiency than a traditional office lease, allowing companies to accommodate full-time workers and freelancers when needed - a huge benefit to growing businesses.
What challenges will businesses face with the gig economy?
It's important to consider the challenges that companies can face when embracing freelancers and temporary contractors.
The trend has a bad image in some industries. Indeed, some companies have been accused of taking advantage of their workers, after giving titles such as ‘independent contractors’ – and no protection against unfair dismissal, no right to redundancy payments, holiday or sickness pay.
In one case, the contractors won a court case against their employer, which recognised they were in fact entitled to such benefits.
Unlike the contractors in the above example, freelancers engaged in the gig economy are classed as independent contractors. But this doesn't mean they shouldn’t be treated well.
Are freelancers right for your business?
It's clear the workforce is evolving. As the gig economy surges, backed by digital technology, employees of the future are demanding more flexibility.
If managed well, there are clear advantages for companies: you can reduce costs by saving on resources and invest in specific, potentially shorter-term, projects when in-house expertise isn't available. The end result is increased efficiency for businesses, as well as further fuel to grow the business.
About the AuthorMore Content by Charlotte Sturman