The gig economy will grow in potentially harmful ways unless it is regulated, according to Matthew Taylor, speaking at The HR Dept’s annual conference in Warwick.
Taylor, who is RSA chief executive and lead on a government-commissioned independent review of modern employment practices published in July, said an inevitable trajectory “towards greater casualisation” of work is already penalising employers who want to offer workers protections, benefits and secure work.
“We are starting to see a battle taking place between companies who employ their people finding themselves undercut by others doing very similar things but where the working trend is to be self-employed or a sole trader,” he said. “It’s a massive issue in distribution and it’s starting to be an issue in road haulage and other sectors too.
“It’s not possible for those companies that are meeting labour requirements – protecting people, paying holiday and sickness pay, and paying National Insurance – to compete with those who have found a way of circumventing that,” he added.
Taylor warned, however, against overly punitive or restrictive legislation. “Public policy tends to fail,” he said. “The two biggest reasons are: firstly that public policy interventions are too scattergun – we try to intervene in complex systems by pulling a single lever, which generates unexpected consequences and doesn’t achieve the effect we want. Secondly that policy is too path-dependent, so it takes us years to get approval to do something, it often doesn’t quite work out the way you want to, and you’re then unable to adapt it.”
What is needed is incremental change, open to adaptation as the situation evolves, said Taylor. “I’ve tried to adopt an approach that is incremental and to resist the temptation to ban certain things – aiming for a combination of empowerment, transparency, incentives and clarity,” he said. “Change happens step by step, incrementally and adaptively.”
Taylor reiterated those headline recommendations made by his Review: that everyone, in the first few days of starting a job, should receive a statement of employment status and terms and conditions, and that a higher minimum wage be offered for non-guaranteed hours. He also highlighted the recommendation that companies at the top of a supply chain become liable for working practices throughout, and suggested SMEs be given access to HR support.
“In this country the vast majority of businesses aren’t members of any organisation or trading association,” he said. “It’s a highly atomised business environment and that means businesses don’t learn good HR.”
Taylor ended his address by stressing the importance of “good work", not just for workers but also the UK economy. “Bad work – which is stressful, where you don’t have a voice or any choices, where you’re treated badly, feel insecure and it’s bad for your health – is not just bad for people dropping out of work but it’s bad for us all: our society and our services,” he said.
“Bad work is also bad for our productivity puzzle. French workers achieve from Monday to Thursday what British workers do from Monday to Friday. Part of that is due to the quality of management we have.”
Taylor added: “Technology is going to change everything. It has to be measured by its capacity to make people’s lives better.”