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Five gig economy myths busted

Organisations must respond to the prominent role contingent workers are expected to play in future business

Until recently the contingent workforce allowed businesses to meet labour shortages and specialist skill demands, operating as an add-on to traditional full-time employment. This is starting to change.

In a recent EY survey of major US employers and contingent workers, 50% of organisations reported an increase in their use of gig workers over the last five years. As we enter a period of unprecedented innovation and disruption, a new trend is emerging and organisations must respond to the prominent role contingent workers are expected to play in future business.

It is critical they dispel some of the most common myths about the role of the contingent workforce so that they do not risk stigmatising them in this new landscape.

Myth 1: It’s just another workforce fad

Two trends in particular indicate that the rise of the contingent workforce is here to stay.

The 2008 global financial crisis instigated a wave of organisational cost-cutting, and between December 2007 and early 2010 the US shed approximately 8.7 million jobs. The US economy began creating jobs again in 2010 but rapid advances in technology made many of the more traditional jobs obsolete.

Advances in automation, robotics and artificial intelligence have, in some cases, made humans themselves obsolete; as much as 47% of the total US workforce is at risk of being automated over the next decade or two. Organisations that are hiring now seek specialised skillsets to manage these new technologies.

Myth 2: Organisations hire contingent workers just to avoid payroll taxes and benefits

Employers hire workers for a variety of compelling business reasons. 56% of employer survey respondents cite projects that require specific expertise beyond their existing staff base as the main reason for seeking contingent workers. And for 42% it is to respond to seasonal demand.

While avoiding payroll taxes and benefits may be a by-product of hiring contingent workers, it is rarely an organisation’s sole strategic driver.

Myth 3: Contingent workers compromise the cultural fabric of an organisation

The benefits that contingent workers offer to the full-time workforce will often outweigh purported risks to the existing culture. While one in five employer survey respondents highlight concerns about the impact of contingent workers on company culture, almost a third see contingent workers as benefiting full-time employees.

Half of survey respondents suggest that using contingent workers can overcome resistance to change within a legacy workforce. And 43% say existing employees benefit from contingent workers’ skills transfer.

Myth 4: Regulation will kill the contingent workforce

It is not so much an increase in regulation that could impede the growth of the contingent workforce; rather it's the challenge of implementing policies to maintain compliance. Many HR departments have a poor grasp of the related risks, and have yet to embrace the policies necessary to align with current workforce regulation. Awareness of the risks is key, not only to address compliance issues and avoid unexpected costs, but also to facilitate the growth of a new workforce demographic.

Myth 5: Contingent workers don’t care about growing their careers

On the contrary, contingent workers go to great lengths to enhance their careers. One of the key concerns contingent workers have is their ability to develop new skills. Fewer than half receive training from their employer so almost a third choose to take training into their own hands through third-party providers.

Training is a key component in developing and maintaining a high-quality talent pool, and employers can only prosper by providing robust training to their entire workforce – contingent or otherwise.

So it is time to dispel the myths and focus on how to make the rising contingent workforce a win-win for employers and employees alike.

David Storey is global talent leader at EY People Advisory Services