Business

'Gig' economy all right for some as up to 30% work this way

Deliveroo protest Image copyright PA
Image caption Not everyone thinks their "gig" job is ideal

The "gig economy" suits Hannah Jones.

"I'm studying, so I can work when I want and for how long I want to. There aren't really any downsides for me at the moment," she says.

Hannah works for Deliveroo, one of the best-known companies in the business thanks to protests by drivers in the summer against proposed changes to the way they are paid.

She is part of a growing army of such workers.

According to new research by global consultants McKinsey, the popular concept of work as a traditional nine-to-five job with a single employer bears little resemblance to the way in which a substantial share of the workforce makes a living.

The McKinsey Global Institute (MGI) estimates that the independent workforce is some 162 million people, up to 30% of the working-age population in the United States and most of Europe. Official UK figures bear this out, with almost five million people in the UK employed in this way.

'Reluctant and strapped'

The report looked at the full spectrum of ways in which individuals earned income outside traditional employee roles. It says independent workers fit into four key segments:

  • About 30% are "free agents," who actively choose independent work and derive their primary income from it
  • Approximately 40% are "casual earners," who use independent work for supplemental income and do so by choice
  • The "reluctants" make their primary living from independent work, but would prefer traditional jobs; they make up 14%
  • Then there's the "financially strapped," who do supplemental independent work out of necessity, accounting for 16%.

'Downside'

Hannah Jones picked up this casual way of working after losing interest in her job in corporate finance and deciding to study for a Master's degree in developmental psychology.

Image copyright Katie Zimmerman
Image caption Hannah Jones has been enjoying the exercise "gig" job allows

She reckons she fits into two of the categories.

She has savings from her previous well-paid finance job, but still needs to top that up. Essentially, she's a casual who is earning supplemental income. She is also a "reluctant" in the sense that her aim is for a traditional job in the mental health field.

Appropriately, perhaps, she mentions the mental health upside to working outdoors delivering on her bike: "I've been outdoors all summer, it's been great for producing endorphins."

But there are plenty who find there are downsides to working for companies like Deliveroo, Uber and any of the other companies that pull together workers with services.

Although workers are classed as self-employed, some companies expect their workers to be freely and regularly available, to such an extent that there is no time to work for anyone else.

Meanwhile, they get none of the benefits, such as sick pay and pensions, that workers for other companies do.

Solutions

Frank Field MP has called such practices "bogus self-employment". He is among those who want a parliamentary inquiry into this new world of casualisation.

McKinsey says its survey found the majority of independent workers in all countries participated by choice and were attracted by the flexibility and autonomy.

But it says solutions will need to be found to the problem of benefits, income security and training, whether that be through government or new technological innovation of the type that created these platforms in the first place.

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