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The gig economy – entrepreneurship or exploitation?

Is it a positive development, hailing a bright future of economic innovation and individual freedom?

Alternatively, is it an exploitative market in which people are stripped of employment rights and job security? 

The concept of a new economic landscape in which many people are rejecting traditional contractual employment in favour of freelance and short-term projects – or ‘gigs’ – has become part of our public discourse. The standard debate around the subject is whether this new way of earning benefits us, enabling us to work flexibly and creatively, taking advantage of all our skills and assets rather than forcing us to specialise into one narrow focus. The alternative point of view is that it could lead to a deterioration in hard-won employment rights and benefits and result in a worryingly insecure future.

Tech companies and specifically app developers have been credited with initiating and facilitating this new movement, with companies such as Uber and Airbnb supporting small-scale entrepreneurship. This is one side of the debate. Others draw attention to the recent lawsuit in which Uber’s couriers were deemed not to qualify as employees as a disturbing example of what could happen to low paid workers under such a scheme.

The gig economy has been likened to the 18th century, with cottage industry workers trading with larger corporations on a piecework basis. Work was casual and market dependent. There was no safety net for hard times, other than social bonds between individuals.

In this respect, the digital revolution has changed our world in the same way as the industrial revolution 250 years ago; however, this time the workplace seems to be fragmenting back to individuals working alone, reversing the centralisation that emerged with large corporations in the 19th century.

One thing is clear – gig work has emerged as a natural consequence of digitalisation. The technology that now dominates our lives has created a forum where user-rated experiences are part of our world.

Rating systems have enabled sites such as Etsy, eBay and Airbnb to create trusted brands essentially out of nothing. Worker-producers are regulated by peer-to-peer evaluation, which enables the companies to build an anonymous but essentially compliant and organised workforce without much effort on their part. Conversely, workers benefit by being able to dabble in entrepreneurship without heavy risk or lengthy professional training periods.

How does this transition in the jobscape affect recruiters? Where will we find our role in a world in which contractual employment is giving way to app-led micro-entrepreneurship? Trust is built into these ventures via ratings systems, and it is this method of recommendation that speaks loudest to people nowadays.

With the market directly connected to individual service providers, it seems difficult to envisage a role for a middle man. Perhaps recruitment firms would be wise to begin specialising in fields such as law or medicine, the old-fashioned, high-ranking professions immune to the digital onslaught.

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