Man versus machine –

Business Insights

will the gig economy survive to become more human? Will the pandemic ensure a more utopian balance between the needs of workers and organisations.

There are essentially two gig economies. The first touches us every day every day. In it, you’ll find the Uber driver, the cleaners who in pre-COVID-19 days left your office fresh, security staff, data entry workers in remote locations who underpin the applications you use at work and many more.

Some of them may have chosen the gig economy path because they need the flexibility for childcare or perhaps to balance two or more occupations to make ends meet or to combine work with study.

By and large, these are gig economy workers by necessity, most of them would love to have secure employment.

This gig economy ballooned in recent years as companies look to shed fixed costs, and perhaps welcome being held to a lower standard of care (and cost) than employees would demand, with their backstop of collective bargaining.

Driven by necessity, these gig economy workers may well trump employees on motivation and discipline, and contemporary technology provides the platforms to organise them well and the monitoring tools to assure quality. By avoiding an employment contract, companies can still save substantial tax and social costs.

The professionals

The other gig economy is perhaps not so obvious. Here, you will find the management consultants and lawyers who chose to work in a loose network rather than a large firm in order to strike the best work life balance. Or you may find the itinerant CEO who is put in place for a spell by administrators to wind up or turn round failing companies. Like its counterpart, the gig economy in the professional world has burgeoned for the same underlying economic and motivational reasons but with a fundamental difference at the level of humanity and perception.

This was the polarised world of two gig economies that we saw developing until the birth of the Covid 19 pandemic.

What next?

The gig economies will undoubtedly grow as organisations work harder than ever to reduce fixed costs overall and drive unit variable costs down. In this, as in many other contexts, Covid 19 is an accelerator of trends that have been underway for some time. But the two poles of that world may well start to converge as the privileged professional gig economy worker starts to experience the same pressures on day rates, more necessity, less choice and the concomitant loss of respect. Disenfranchised, these gig economy workers will be angry and lead demands for regulation and employment rights. In the wake of Covid 19 tolerance of inequality and corporate rent seeking will be sharply reduced. That opens the risk that the wealth conferred by the gig economies across our societies may be curtailed.

How can organisations manage that risk? The key lies in the weak foundations of both the gig economies: they lack an institutional base. In the first gig economy, workers may be controlled and managed through technology platforms, but gig economy workers are rarely offered opportunities for training by their de facto employers; the well-being of the worker and her family are unlikely to be on the agenda. Investing in gig economy workers to uplift skill sets for more senior positions would seemingly run counter to the fundamental economic argument of moving away from traditional employment. At the same time, those in the more privileged end of the gig economy spectrum can find life lonely, lack a sense of building and contributing to something, and find themselves doing much the same thing year in year out, with little personal growth and professional development.

Here we can expect the rise of hybrid models. Large, traditional professional service firms came under threat as opportunities for autonomous working arose, with network-based challengers like Eden McCallum in consulting and Keystone in law providing a flow of opportunities to professionals seeking freedom. Before the Covid 19 crisis, many large firms had started to respond: offering greater flexibility for the sake of childcare, development of personal interests, voluntary work and learning. Expect this to continue.

For both gig economies to thrive there will need to be a blurring of boundaries in which gig economy employers start to offer meaningful development so that even if their gig economy workers cannot be promised employment they can be promised employability. That is to fulfil their responsibility to treat those workers off the payroll as well as those on it as ends rather than means, as worthy of respect and engaged in an I-thou rather than an I-it relationship.

Dominic Houlder is Adjunct Professor in Strategic and Entrepreneurial Management at London Business School and co-author of What Philosophy Can Teach You About Being a Better Leader, published by Kogan Page.