How should human resources respond to the gig economy?
(Note: This article originally appeared in Canadian HR Reporter Weekly, our new digital edition for subscribers. Sign up today to make sure you don't miss future issues: www.hrreporter.com/subscribe.)
As many as 22 per cent of Canadian professionals are now employed in precarious positions, according to a survey of 1,000 workers.
And while the gig economy crosses all industry sectors, it is most heavily concentrated in three: education (28 per cent), business, finance and administration (19 per cent) and health care (18 per cent).
The trend is balanced across the country — no region is immune, according to No Safe Harbour: Precarious Work and Economic Insecurity Among Skilled Professionals in Canada by the Canadian Centre for Policy Alternatives.
“We tend to think of precarious work as something that happens in low-wage, low-skill jobs… but even highly educated professionals are experiencing economic insecurity and unstable working conditions,” said Ricardo Tranjan, a senior researcher at the Ottawa-based think tank.
Most gig workers go from contract to contract (37 per cent) or work part-time (34 per cent), though 26 per cent are employed full-time, according to the survey. Sixty per cent do not have access to a pension plan or other retirement savings, and do not receive sick pay.
The blame can be laid squarely at the feet of employers, said Tranjan.
“The drive behind (insecure positions) is management trying to cut costs, management trying to accommodate austerity, and policies that have been imposed on them because of the public sector,” he said. “With precarious work around low-skilled, low-wage jobs, usually the discussion is around ‘Well, it’s the nature of the service economy… Nothing can be done. It’s just how jobs are nowadays.’”
“It helps to move away from the notion that there’s some sort of invisible hand out there making jobs this way and then we have to learn to live with it. No — there’s decisions that are made every day, all throughout the various sectors and industries, that are driving this.”
Creating good jobs
For HR professionals, cutting positions in favour of contract work is a short-sighted approach, especially when it comes to employee satisfaction, productivity and turnover, said Tranjan.
“Precarious work is bad for the economy,” he said. “From a broader economic perspective, what we want to avoid is sort of this race to the bottom where everyone’s just trying just to cut costs, and then just send all the profits out.”
“Instead of that, we can think about a more positive economic cycle where good jobs lead to good wages, higher consumption power, and then higher revenues for the very business that’s generating those good jobs. This is the kind of positive economic cycle that we want in our cities and our communities.”
The majority (57 per cent) of professionals without full-time work prefer better job stability, according to the survey. Three in five public sector gig workers blame their predicament on government policy to slash funding or privatize jobs.
“People would very much like to have a good, stable job, and if some firms out there have that sort of more self-enlightened way of looking at this and offered those jobs, I think they will be attracting the best professionals out there,” said Tranjan.
“It will be good for their own bottom line if they have a more long-term understanding of what employee satisfaction can bring to their firms, and it’s good for the economy more broadly.”
Precarious by choice
But many professionals are gig workers by choice, said Marion McGovern, author of Thriving in the Gig Economy in San Francisco, Calif.
“A lot of people just think of gig workers as folks in the on-demand economy — the drivers, the delivery people,” she said. “But the truth of the matter is there’s a lot more than that. There is a very large professional cohort (of) people who are doing independent work because they choose to do it.”
A large number of workers choosing the gig route are able to enter companies for strategic contract roles, she said.
And it would be in HR’s best interest to become more involved in this process, said McGovern.
“What happens in a lot of organizations is that the hiring manager says: ‘You know, this temp stuff that we’ve got going — that doesn’t work for me. I’m going to find this person on my own and I’ll just figure out a way to bring them in.’ You end up with kind of rogue spend — if you will — on work that is almost untracked.”
As the number of non-traditional workers grows across the continent, companies will need to adapt more quickly to the changing nature of the workplace, with those in remote areas likely to be hardest hit, she said.
“For companies, there are many things at stake here — not the least of which is getting the right talent that you need,” said McGovern. “The future of work is changing and we’ve got to figure out ways to make it suit the workers and protect the workers, too.”