Is gig work really a new concept, or just contingent work with a fancy name?

Is gig work really a new concept, or just contingent work with a fancy name?

The buzzwords of ‘gig work’ and the ‘gig economy’ are gaining more ground. It’s completely changed the way some industries operate, and concerns for peoples’ rights who work in this space are increasing. But what exactly is ‘gig work’ and is it really something new?

There’s no clear consensus on what gig work actually is. Gartner classifies it as a “group of contingent workers (such as independent contractors, freelancers and contract firm workers) in a temporary employment relationship who provide project-based, on-demand labour.”

However, Fair Work Australia has a narrower definition by stating the “gig economy uses mobile apps or websites to connect individuals providing services with consumers.”

So, if we go by Gartner’s definition, gig work certainly isn’t anything new. It’s common for companies to supplement their permanent workforce with contingent workers to manage a flux in workload on a short-term or temporary basis.

Examples of this include agriculture using labour hire workers to support demands of seasonal work. Or in terms of technology, bringing on an IT Project Manager to manage a digital transformation project.

However, what has changed is there is now new channels to source workers through. Fair Work Australia has specifically called out ‘mobile apps or websites’ as the vehicle to source gig workers.

Gig work, both in the broader and narrower sense, can benefit both workers and employers. This includes:

• Workers have complete flexibility of choosing when, where and what projects they work on.
• Opportunity to develop a broad range of experience by working on a variety of projects across different companies and industries.
• Ability to ‘try before you buy’. Workers can work for a company to see if it’s a ‘good fit’ before committing to permanent employment.
• Depending on the area, some gig workers can demand higher fees compared to permanent, full-time employees.
• Provides workers with an additional income stream.
• Organisations can source exactly the right skillset they need for the duration of the project without committing to full-time resources.

Temporary, short-term, and project-based work can be in both the company’s and worker’s favour, but there are also drawbacks. Flexibility is a major bonus, but it also means a lack of job security. In such uncertain times combined with rising skill-shortages, increasing numbers of sought-after talent are opting for situations where they have a regular, guaranteed income over less secure alternatives.

For organisations, the opportunity to easily scale up or down your workforce is a huge benefit in terms of cost efficiencies and to maximise productivity. However, it can also leave you vulnerable as the IP you bring in isn’t yours.

So, in some situations it can be a great short-term solution, but not ideal in the long term. Despite the higher investment upfront of upskilling your existing workforce or hiring permanent employees, it’s worth considering building capability internally without having to rely on contingent workers - especially if you’re likely to have an ongoing need for certain skills and experience.

Gig work via apps and websites come with its own unique risks. Especially with unskilled, or low-skilled work, it’s been argued companies are using these platforms to avoid their legal obligations as employers. For example, Sydney Uber Eats drivers were found to earn less than the minimum casual wage during peak times.

For creative and professional services using these platforms, it may not seem like this issue affects you. However, you’re often not protected under employment law, which leaves you vulnerable if something does go wrong.

For organisations, it may appear like a no brainer to secure top talent for bargain prices. In reality, receiving quality work can be a lottery and if there are disputes, it can be harder to resolve when traditional resolution channels are not available.

Terms like the gig economy and gig workers are new, but the concept isn’t. Contingent work has been around for a long time. Companies rely on contingent workers to help them manage peaks in workload, complete one-off projects, or bring in the skills they lack internally.

What is new is the use of apps and websites to source gig workers. Contingent work does carry risk, such as a lack in job security. However, gig work through apps and websites goes a step further. It often bypasses our laws put in place to protect employees and companies and should be used with caution.

​How Paxus can help

If you’re looking for the flexibility that contingent work brings, but also the assurance of compliance with employment law and regulations, Paxus can help. Visit our Job Board to browse our open roles or signup for Job Alerts so you’ll be first to know when the perfect opportunity becomes available.