Uber drivers yesterday won a unique case in an employment tribunal after judges ruled they were entitled to the national living wage, sick pay and holiday pay. The case involved just two drivers but leaves Uber exposed to further claims and has far reaching implications for all employers operating on a similar basis. Four courier businesses are also facing action, with the first case scheduled for November.
The outcome of the Uber hearing reflects a wider concern over employment practices within the gig economy. Earlier this year Citizens Advice suggested that up to 460,000 people could be ‘bogusly self-employed’ and the government recently announced a review of working practices to address this problem. Prior to yesterday’s ruling, the CIPD observed that the ‘grey areas’ regarding self-employment are likely to be the ‘biggest workplace legal issue of the next decade’.
The ruling has the potential to severely disrupt working practices for all businesses adopting Uber’s model.
Are there any ‘winners’?
By 2020, the gig economy is predicted to be worth £2 billion to the UK economy. An estimated 5 million people work under its umbrella but only around one third of these earn their primary income from this source. These are the people who benefit from the gig economy; professionals with in-demand, specialist skills and in-depth experience thriving in a candidate driven market. For these individuals and the companies that hire them the gig economy offers reciprocal advantages.
Furthermore, a recent survey suggests that over 80% of self-employed workers are satisfied with their employment status. The majority enjoy the flexibility that working in the gig economy offers, including freedom to operate on their own terms. 90% of these contingent workers do not choose to return to an ‘employed’ status. Millennials in particular are more likely to opt for a freelancing career than remain loyal to one employer.
These benefits do not negate or overlook the underlying issues or the potential misuse of the gig economy. The effective management of freelance talent requires the following strategies:-
Be specific with your requirements : Define the type of skills and person your business needs. A candidate persona is essential to develop an employment proposition to attract skilled freelance workers. Be clear that there are no other sourcing options for the skills you require.
Review recruitment strategy : If there are ‘grey areas’ relating to workers with self-employment status within your business, a complete review of your hiring strategy is a priority. This issue is not going away.
Faster hiring : Process your freelance talent through your hiring process to onboarding, supported by HR technology This ensures your contingent workers are rapidly integrated within your workforce and able to adapt to your culture quickly.
Treat all workers equally : Performance management is regarded as the weak link in the gig economy chain. Once hired, HR must adopt similar principles for its open talent workers as it does for full-time employees. This requires ongoing reviews and consistent engagement to boost productivity and meet business goals.
As Uber announced its intention to appeal the ruling, the final shape of the gig economy is yet to be revealed. In the meantime, HR must focus on building a positive employer brand, valuing its people and supporting complex hiring practices with sophisticated technology in order to predict and plan for future skills shortages.
The gig economy presents new challenges for sourcing talent. Manage these complexities effectively with professional recruitment software which provides flexibility across the hiring functions. Contact Advorto today.
For a more in-depth look into the gig economy and the effective performance management of a skilled, flexible workforce, download our whitepaper The Rise of The Gig Economy.
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