Today, difference has extended itself to the modern workplace and shaken up the traditional employee-employer relationship. Applying a HR lens on the topic, ponder, as business owners, the way your organisation, your industry and your people can adapt and embrace this new normal. It is widely accepted that navigating the complexity of workplace change is critical for Australian businesses amid the rise of the sharing economy and the concurrent trend towards contracting and flexible workforces.
Self-employment is becoming the way of doing business. What’s happening globally is that technological change combined with attitudinal shifts in the employee-employer relationship is resulting in new business models that are competing with traditional employment structures. It’s hard to ignore the effects of digital technologies on today’s workplaces, but one thing that flies under the radar is the shift in traditional workplace relations caused by the boom of tech-based markets that connect companies and consumers directly with freelance and contract workers.
Companies such as Freelancer.com and Airtasker have come to exemplify the rise of the work-on-demand economy, and it’s not unusual to hear something referred to as ‘the Uber of X’. Crowdsourcing, along with the closely related practice of online outsourcing (also known as micro-tasking), is opening up the world’s labour market and enabling workers from everywhere to bid for work on offer anywhere.
Don’t underestimate the potential reach this has. A much bigger impact is being felt as organisations turn to crowdsourcing services for a broader range of tasks, as they enable organisations to select and engage with a wide variety of service providers in a very transparent manner. This is highlighted by the Board of Taxation who have stated that the profile of Australian workers is evolving with more ‘white-collar’ workers adopting forms of contracting and self-employment in many sectors such as management consultancy and financial services. Closely connected to the proliferation of contractors is the growth in the provision of personal services.
For those of you wanting the numbers, here they are. Contingent employees – or freelancers – account for roughly 8.5% of the Australian workforce, or about 1 million workers. It’s far from a majority, but this number is expected to only grow in coming years. Why? The perks that more and more workers are looking for from traditional job markets are built into the fabric of the sharing and on-demand work economies.
In 2015, 1,300 workers who participated in the on-demand economy were polled. Perhaps not surprisingly, 75% of participants listed flexibility as the number one reason for choosing this type of work; second was increase in income. Self-employed people see themselves as more secure because they control their own destiny and spread the job risk across multiple clients. Self-employment can be seen as a rising star, due in part to increasing numbers of self-employed people, as well as self-employed individuals being at the cutting-edge of cultural and attitudinal change in global workforces.
So what are some of the sticky points from a business perspective?
- The C word (culture that is) – the more freelancers you employ, the more scattered your workforce will be. This can have implications for establishing coherence among staff and company culture, and employee engagement levels could suffer.
- Safety first – businesses should create workplace health and wellbeing programs. The job might be made easier when there are industry professionals looking to whip workplaces into shape?
- The letter of the law – this is a two-part problem. First, what are the legal implications for hiring a freelancer as opposed to a full-time employee? Second, can your HR and legal functions be outsourced? There’s a potential loop here where the legalities of hiring freelancers are handled by freelancers who deal in legalities.
- Who’s the boss? – when organisations bring in outside help, they, together with business owners, need to consider the potential for conflict. Who will have ultimate decisionmaking power?
- Training wheels – when outsourcing training and professional development functions, how can you be sure that a freelancer has received the appropriate training to perform a job?
So what now?
Well, the short answer is it depends. The potential impact will vary from industry, to business to individual so you need to consider where you fit into this picture. What are the potential risks? Is now your opportunity to gain that advantage by thinking differently? One thing that’s for certain is that this new paradigm is here and your ability to navigate through it might just be the thing that sets you apart from your competitors. Being the cool kid is overrated anyway.