The recent decision by Transport for London (TfL) to revoke Uber’s license to operate in London has unleashed a torrent of responses. From vindication and shock, to despair. In fact, more than half a million Londoners signed a petition to protest the TfL’s decision within the first 24 hours after the pronouncement – a record for the government’s petitioning website.
This outcry shows just how important the digital innovation that enabled this new business model has become. Likewise, TfL’s decision illustrates that the gig economy – usually characterised by short-term contracts or freelance work where people are offered piece-work through a website or app – is still very much a work in progress.
However, while the likes of Uber, Airbnb and Deliveroo get the majority of press, to understand the true nature of the gig economy we must look further afield. Research paints a picture of gig workers being most frequently found in professional work such as accounting and legal advice, followed by creative or IT roles and then skilled manual workers like plumbers and electricians.
Companies can now outsource work to gig workers who do not even need to enter the physical premises of the company, much less be permanent employees. Conversely, those workers can source and undertake work much more easily than ever before.
Welcome to the human cloud
This has led to the rise of the phenomenon known as ‘the human cloud’, where individual tasks or projects are performed remotely and on-demand by independent contractors.
There are obvious reasons why this trend is growing in popularity. Workers often feeling less stressed due to the flexibility of their day and companies employing teleworkers benefit from access to a larger talent pool, as well as functional benefits including cost-savings on real estate and a reduced environmental footprint. About 13 percent of European workers are currently considered teleworkers (i.e. they spend at least 10 hours working away from the office), and over two-thirds would be interested in the concept.
Addressing this trend, internal ‘start up teams’ are on the rise within larger corporations to take advantage of the gig economy ethos. Organisations are providing these internal teams with their own ‘think spaces’ to develop a culture of innovation and creativity to encourage competition with new small disruptor companies.
The technology driving the change
Recent rapid innovations in cloud-based platforms and digitalisation have brought these freelancers (gig workers) much closer to end users and allowed personalised digital tools and network connectivity to automate basic processes.
This human cloud effectively telecommutes – making remote-gigs progressively easier with the increased accessibility and affordability of data and digitalised cloud services. Of course, this places the onus on corporations to be able to effectively engage, manage and enable this element of the workforce. Not only core HR functions, but also in terms of training, access to systems and measurement of results. Fortunately, the technology that enables the work also makes it possible to track and enforce employment rules.
The pace of change is set to increase
The pace of the gig economy’s development signals a step change for the composition of the wider economy. In the UK for example, estimates range from between 1 and 5 million for the total number of people already engaged in the gig economy, out of a total workforce of 32 million people.
Significantly, more than one-third of millennials are now independent workers; this is hugely significant. In 2015, millennials became the largest demographic age group in the workforce which indicates this trend is set to accelerate.
Looking to the future
As the ‘human cloud’ of the gig economy grows in popularity, the workforce (those involved in traditional employment, those in independent roles and those simultaneously juggling both) will grow more agile. The transformative effect on the gig economy cannot be understated and will give rise to more collaborative networks and increased specialisation of labour.
There are still issues to overcome today, exemplified by the disputes on employment rights Uber is facing in London and that it faced last year in France and Germany. This could play out for traditional employers as well, when looking to collaborate with gig economy workers.
As technology develops to support agile, responsive, cross-geography collaborative work models, it’s likely that the workforce of the future will accelerate the development of the gig economy. Companies will need to adapt, train and reskill employees as well as their independent contractors. We are already seeing this model emerging in those industries, like healthcare and manufacturing, where compliance and health and safety requirements are high. Indeed innovative platforms such as SuccessFactors are allowing organisations to connect with and train, certify and record dispersed workforces whether they be employed or shorter-term contractors.
It’s not hard to envisage a world where a traditional employee rides an autonomous taxi to work, sits at a virtual desk in a start-up-style ‘think space’, working alongside and directing a mixture of robots and off-site freelance contracted workers via digital tools. Similarly, they might well be doing the exact same thing from the comfort of their own home or a satellite work center connected to their colleagues via video conferencing and digital networking tools.
Distributed teams, the evolving traditional jobs landscape and the incorporation of the gig economy will ensure that how we all work will look very different to what we experience today and with two-thirds of independent workers stating they have no intention of returning to traditional employment, it’s clear that at the very least the gig economy is here to stay and the ‘human cloud’ will continue to grow. Technology will continue to fuel this growth and may also be the key to solving some of the biggest challenges of the gig economy.
Mike Slater, MD SAP UKI
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