Busted: 3 myths about the gig economy

Busted: 3 myths about the gig economy

There are now 1.1 million underemployed Australians, up from 170,000 in the 1970s, according to the Australian Bureau of Statistics. In contrast, the size of the gig economy is increasing rapidly and attracts millions of users every day.

Research conducted on behalf of the NSW Government estimated the sharing economy has contributed $504 million to the State’s economy annually, and provides 45,000 people with some form of work.

FYA’s New Work Order report explores some of the challenges that increasing casualisation is presenting for young people in our workforce. But there are still so many myths about what navigating the gig economy means. So we’ve decided to bust some of them here.

Myth 1: The gig economy provides flexibility to all aspects of a person’s employment

One of the reasons some people may choose to work in the gig economy is that the traditional company interaction is taken away and replaced with a digital platform or app. Through this, people find themselves with the choice to be flexible with the work that they do, the amount of it, and when they do it.

However, this flexibility comes at a cost.

As an independent contractor, it is up to the individual to manage their own GST, superannuation, income protection and insurance. There is no annual or sick leave, and there may not be demand for work on the app when work is needed, leading to a lack of income security.

Furthermore, individuals must follow what can be stringent requirements from gig economy platforms. According to research, companies can block workers if they receive low ratings or cancel jobs, leaving very few options to challenge any suspension from the platform.

Myth 2:  The gig economy will only affect junior jobs

Whilst the majority of work in the gig economy is for lower paid jobs, the changing nature of the New Work Order means that senior and specialised jobs are also up for disruption.

The Senate Committee’s Report into Corporate Avoidance of the Fair Work Act 2009 found that highly skilled workers have also been found to be in demand with roles such as web developers and surveyors advertised on some platforms. There are even requests for executive level roles such as CFO.

Executive level jobs such as “CFOs on demand” can be valuable to some organisations to bridge gaps for highly skilled intellectual property within an organisation.

This idea is not a new one. Specialist labour hire companies and professional services firms have been seconding highly specialised workers into companies for a while. However, the emergence of the gig economy has opened the market up a lot wider.

Myth 3:  Every job in the future is going to be part of the gig economy

Even with the growing uptake of workers earning a living in the gig economy, there is still a strong drive for full time, part-time and casual employment.

Jobs ads on Seek.com.au have increased by 13.2% since this time last year, which signals the “best conditions for jobseekers” on the job listing website since 2010. John Harland, Director of ERG Recruitment Group says that “there is still a huge need for robust full time, part time and casual employment. The main reason for this is because businesses are crying out for talent and they want to hold onto as much IP as possible.”

Gig economy workers often have very short term commitments to client or customers such as one car trip to work or one food delivery. This can create a gap for companies looking for workers that have longer term relationships with customers, and the long term internal organisational knowledge that usually comes from full time and part time employment.