The Gig Economy & Your Business - A Match Made in Heaven?
Years ago, temporary work was a niche, occupied by college students returning home for summer, professionals between jobs or filling in work gaps (like educators) and people working their way up from unpaid to paid internships. Today, nearly 30 percent (and counting) of US workers reporting earning some portion of their income via a temporary or independently contracted job.
The gig economy is expanding. What does this mean for you?
As an employer, this opens up a whole new world for hiring. People with and without full-time jobs are as willing now as ever to take on extra work, or a “side-hustle.”
Need a web developer or a copywriter? Instead of needing to create money for a part-timer, you might be able to take a look at a site like Fiverr and hire someone per project.
This is perfect for a small business that needs to expand but isn’t quite ready to commit to the budget necessary to dive all the way into their next phase.
Hiring through the gig economy does come with some pitfalls - just ask Uber. In late 2018, Uber was embroiled in a case in the UK over whether or not their drivers were employees or independent contractors.
The case is one of a few that Uber has been involved in, with drivers arguing that the terms of their deals with Uber were misleading, and that they felt more like they were employed by the company, rather than working for them as freelancers at their own will. The issues stemmed from Uber laying down penalties to drivers seemingly at their own discretion.
Uber argues that penalizing drivers for things like cancelling agreed upon rides, or for low customer feedback is just its way of offering a good product to their customers and as a means of quality control. Drivers instead argue that these safeguards, plus the inability to subcontract out work given to them from Uber means that they are being treated as employees.
More recently, Uber and other ride-sharing services have been under fire for gaming the system to take money from the pockets of their drivers.
Now, as a small business owner, you should make sure you’re always going about things the right way when it comes to people in your charge.
But this is doubly true if you’re relying on independent contractors and freelancers. They don’t need to work for you and can choose at any time to stop work if they feel like they aren’t being compensate well or if they feel they’re being treated unfairly.
If these ride-share companies offered permanent employment to their drivers, a lot of the issues the drivers have with the business would likely be solved.
So, while hiring someone per gig can provide you a little flexibility, you have to be careful not to abuse it. Come up with some best practices for your business for hiring freelancers and make sure you’re upfront about expectations and compensation when hiring someone to work independently.
When circumstances change, which they might, be sure to communicate that clearly to your freelancers and to be willing to compromise or willing to lose that freelancer. The alternative could be finding yourself on the wrong end of a PR problem - or possible litigation.