The Gig Economy – What’s happening in Australia?

The Gig Economy – What’s happening in Australia?

Every day we’re hearing more and more about the Future of Work. Despite this, I’m wondering how advanced Australian businesses are in their thinking about what the implications and opportunities of this new economy will be?

One of the key components of the Future of Work discussion is the Gig Economy, which applies to any individual who chooses to provide their specialist skills and services for a fee. Terms used to describe these individuals include contingent worker, freelancer, independent consultant, contractor, …and so on. Experts are telling us the number of these workers is tipped to grow dramatically in the future leading to a change in the mix of the traditional workforce we’ve known for many years.

I wrote an article back in February 2017 on this subject as a result of some thought leadership articles coming from Deloitte, Australian Industry Group and Accenture. Since then, we see commentary almost every week around the globe about this emerging Gig Economy, particularly referencing companies such as Uber, Airtasker, Freelancer, Deliveroo and the like. These particular organisations, based on very different models to our traditional corporate businesses, are generating a lot of discussion and equally, concern. While very interesting, they are not the focus of this article.

Instead, let’s talk about our traditional corporate organisations. Small, medium and large, public and private institutions, across varied industry sectors. Organisations that have largely been created around a traditional business structure, with the capabilities and skills required to deliver the products or services of the business provided through their workforce who are generally engaged in traditional employment arrangements. If additional skills and capabilities are required that are not available in the organisation, they are usually sourced through contingent or independent workers under consulting or contractual arrangements as needed. And this is why this new Gig Economy is going to be equally applicable to our corporate businesses.

For years now, corporate businesses of all sizes have engaged specialist external business and professional services consultants, particularly across HR, IT, Risk, Communications and Marketing for example, to supplement their needs. And going forward, this will continue.

However, thought leaders predict that the traditional workforce mix we’ve been used to for all these years is going to change to one that will see organisations;

  • Focus their workforces on delivering the core operational skills and more generalist capabilities needed to run the business while

  • Moving to a greater use of gig economy or contingent workers such as freelancers, independent consultants and contractors performing more of perhaps the specialist roles, projects and pieces of work required in more flexible and short term focussed assignments.

The Gig Economy, we’re told, is reaching levels upwards of 30% of the workforce in the USA and UK, pushing towards 40% and beyond by 2020. In Australia, 32% of the workforce freelanced during 2014-15 according to The Australian Industry Group.

If all of this is true then it’s perplexing why organisations and independent consultants here in Australia are not talking more about this new future of work and how they will operate in it? Or are they?

I’ve been speaking to many organisations, including small, medium and large corporates, public sector departments and agencies, tertiary institutions and local government businesses. Despite all that’s been published, what’s been interesting is that few, other than some of the large corporates and professional services firms, are indicating that they’re even thinking differently about how this new Future of Work or Gig Economy is going to impact their business.

On the other hand, I’ve spoken to a large number of people who are choosing to leave their traditional employment arrangement to set up their own consulting business. This is consistent with the views of thought leaders around the globe that suggests more and more people are choosing to opt out of the usual 9-5 employment experience, preferring to use their speciality/expertise to seek more flexibility and choice in when and who they work for.

Let’s be honest, the Gig Economy, when it’s all said and done, is not really new here in Australia is it? I mean, at some point over the last 20 years, every business has engaged contingent workers such as independent expert consultants, freelancers or contractors to deliver set pieces of work or provide very specific specialist services.

So, what’s the fuss about this Gig Economy then? I mean we’ve managed it, we know how to access it when we need it. Is it just that it’s not new that there seems to be so little discussion or even interest in it inside businesses?

I guess the take away coming out of all of this is that the demand for contingent or gig economy workers is tipped to grow to a whole new level, well beyond the levels we’ve experienced here in Australia over the last few years. And as a result, our traditional workforce mix as we’ve come to know it, is expected to change accordingly. The extent to which organisation workforce structures change will be closely monitored as no doubt, changes like this will have implications on our labour market. And although we know how to access gig economy workers, the methods currently used by businesses to source them such as word of mouth, ringing around networks for recommendations, scouring the internet, will neither be sufficient or efficient, to deliver the talent and capabilities needed by organisations in the future.

In Australia, it seems we tend to be followers, or perhaps just more conservative, when it comes to some of these global trends. But, the thinking and conversations in organisations about this new economy will happen…and it will get to a point that we can’t ignore any longer.

So, if this emerging Gig Economy is going to impact here in Australia as predicted it inevitably will, what are the things we could or should start considering? Here’s some things the experts suggest:

  • Human Resources teams inside organisations should pick up the lead on what this new workforce mix in the future could look like including, what core operational capabilities are required to run the business, where will talented specialists and expert service providers be sourced from in the future, the implications of any changes to traditional structures and employment arrangements, identifying what new systems and technology will be required to support this shift and planning how this new workforce will work together and retain a level of commitment to the organisation.

  • IT Departments will need to help and support the business access the new digital platforms that will enable them to find, connect and engage the specialists needed. And it’s likely it won’t be just one platform that satisfies all of your needs.

  • Procurement Functions will need to collaborate with HR and IT to source and on-board these new gig economy workers with far more nimble and flexible sourcing and governance practices that enable businesses to quickly and easily access these specialists when needed.

There seems to be a lot for organisations here in Australia to ponder about this emerging future of work if the experts are right? So will your organisation be ready to embrace the Gig Economy and the opportunities that come with it? Are you are already on to it? Or maybe some are going to sit back, wait and just see what happens?

About Andrew Jarvis and CircleSource

Andrew Jarvis is a Founder and Chief Executive Officer at CircleSource. Prior to founding CircleSource, he spent more than 25 years in senior HR Executive roles.

CircleSource is a new digital business services platform aiming to provide organisations with greater accessibility, transparency and choice when engaging specialist independent consultants. Anywhere, anytime from your desktop, tablet or smartphone. End to end engagements (including events and projects where more than one specialist is required) can be managed within the one platform with a two way rating system at the end of the engagement enabling specialist providers to trend in the marketplace. CircleSource could save up to 40% of the current time and cost to source external business services providers and consultants. Achieve successful outcomes for your business, extend your professional networks and Be Brilliant Together.