What motivates gig economy workers?

AdviserPlus

Written By AdviserPlus

16th November 2018

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HR is all about looking after the people in an organisation – and it’s tricky to do that if you don’t understand what makes them tick.

By taking time to consider the motivation of different people in the workforce, you can appreciate why they act and react the way they do when confronted with challenges at work.

While it’s tempting to focus on a typical desk-based office jobs, the modern world of work is much more of a patchwork quilt of different types of employment that requires closer inspection and deeper reflection.

The gig economy – where employees take on work (‘gigs’) and get paid for the amount they do – is a big part of the way we now work. This guide will look into what motivates gig economy workers and what that means for people in HR.

The current state of the gig economy

recent government report looked into the number of workers in the gig economy and the state of this sector. It revealed that:

  • An estimated 4.4 per cent of the population had been involved in the gig economy within the last year – which equates to about 8 million people
  • More than half of the people in the gig economy were aged 18-34.
  • London is a particular hotbed of this type of work
  • Courier services are the most common form of gig economy, with freelance-style tasks performed through websites and apps, transport and food delivery are also common
  • In total, 87 per cent of the people asked had earned less than £10,000 in the last 12 months as a result of their work in the gig economy

That allows us to build up a picture of the gig economy as being predominantly young, city-based and low-paid workers who are engaged in the short-term provision of services.

The four types of worker in the gig economy

One study from management consultants McKinsey outlined four segments of independent workers and understanding these helps us to consider the different motivations of people in the gig economy and the variety within this sector.

These are:

  • ‘Free agents’ – People who make their primary income from the gig economy and do so out of choice. According to McKinsey, they make up roughly 30% of gig economy workers.
  • ‘Reluctants’ – People who make their primary income from the gig economy out of necessity rather than choice (about 14% of the sector).
  • ‘Casual earners’ – People who supplement their income through the gig economy and do so out of choice (about 40% of the total).
  • ‘Financially strapped’ – People add to their income through the gig economy because they have no choice but to look to earn additional income (thought to be about 16% of the total).

This is very useful when it comes to considering the motivation of such workers – and shows the perils of treating the ‘gig economy’ as one amorphous block.

Lessons for HR

There are a few things that people in HR need to consider when it comes to the effective management of gig economy workers that become apparent once this is appreciated:

  • Some people want to be in the gig economy and some don’t. It’s important to recognise those that don’t and, where appropriate, set out a pathway to help them work towards fully contracted employment. Likewise, people who value the flexibility of the gig economy will not want to have working conditions imposed on them. Only once you understand the motivation of the individual in question can you create a relationship that works over the medium to long term.
  • The future of work – explored in more detail here – will require HR to be able to cater for a more flexible workforce. The gig economy is one manifestation of that.
  • Communication is crucial for those in the gig economy. If people are not ‘in the office’, HR needs to find other, efficient ways of keeping people such as contractors and freelance workers up to speed with the latest important company announcements. Failure to do so risks inefficiency and poor morale.
  • This communication also requires clarity. Gig economy workers might well find that their hours and pay fluctuate wildly from month to month. Given that many of them are low paid, it’s only right to be as open and honest as possible. HR might need to sit as an important pivot between the worker and the people commissioning their work.
  • While it might be true to say that the hours and earnings of someone in the gig economy is more fragile, the same might be said for the work done in this sector too. Managing absence might be trickier, but it’s crucial to help avoid missing our on key client orders. Read our recent eBook for a full assessment of the things to consider under the topic of absenteeism.

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Gig economy workers may be paid differently – and might have different tax rules – but they do need to be effectively managed in the same way as any other employee. Understanding the nature of this work and the motivation for people undertaking it is key to ensuring that this can be done.

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