CIPD gig economy study sets stage for Taylor Review

As the government prepares to review current employment practices, new research offers insight into the size of the gig economy and highlights the need for greater clarity over employment rights.

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The study from the professional body for HR and people development, To gig or not to gig: Stories from the modern economy, reveals the gig economy primarily boosts income for many of its 1.3 million workers rather than being an alternative to regular paid employment. However, it also suggests thousands could be missing out on employment rights.Despite perceptions, only four per cent of UK working adults aged between 18 and 70 work in the gig economy, according to the CIPD’s study. Most take on this less regulated, freelance work through online platforms like PeopleperHour or Uber to boost income (32%), with only a quarter of gig economy workers reporting their gig work is their main job. Only 14 per cent say they did so because they couldn’t find alternative employment.Six in ten respondents say they don’t get enough work on a regular basis in the gig economy. The research also shows income earned from gig work is typically low, with median reported income ranging from £6 to £7.70 per hour.

Regulation to protect rights?

Nearly two-thirds of 400 gig economy workers studied (63%) for the report, together with 2,000 other workers, believe the government should regulate to guarantee them basic employment rights and benefits such as holiday pay.Echoing recent court cases on this matter, respondents raised concerns about the level of control exerted by the businesses they worked for, despite them being classified as self-employed.Just four in ten (38%) gig economy workers say that they feel like their own boss, raising the question says the CIPD of whether some are entitled to more employment rights. More than half (57%) of gig economy workers also agree that gig economy firms are exploiting a lack of regulation for immediate growth.The CIPD’s chief executive, Peter Cheese, commented on the diverse picture the research has revealed: “This research shows the grey area that exists over people’s employment status in the gig economy.“It is often assumed that the nature of gig work is well-suited to self-employment and in many cases this is true. However, our research also shows many gig economy workers are permanent employees, students, or even the unemployed who choose to work in the gig economy to boost their overall income.“Our research suggests that some gig economy businesses may be seeking to have their cake and eat it by using self-employed contractors to cut costs, while at the same time trying to maintain a level of control over people that is more appropriate for a more traditional employment relationship.“Many people in the gig economy may already be eligible for basic employment rights, but are confused by the issue of their employment status. It is crucial that the government deals with the issue of employment status before attempting to make sweeping changes, else they risk building foundational changes on shifting sands."

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Gauging gig workers’ perceptions on benefits

Half of gig economy workers agree that people working in the gig economy choose to sacrifice job security and workers’ benefits in exchange for greater flexibility and independence.They were as likely to agree (36%) as disagree (35%) that “the gig economy should not be regulated and companies should compete to offer workers fair pay and benefits, even if it means less income and job security for people.”Despite the typically low earnings reported by gig economy workers, they remain on the whole satisfied with their income, with 51 per cent saying they are satisfied and 19 per cent dissatisfied with the level of income they receive.This is significantly higher than the level of satisfaction with pay reported by other workers, where 36 per cent are satisfied and 35 per cent are dissatisfied.Interestingly, gig economy workers are also about as likely to be satisfied with their work (46%) as other workers in more traditional employment are with their jobs (48%).

Better guidance for employers needed

“The research shows the challenge that policymakers face in regulating the gig economy and finding the right balance between providing flexibility for businesses and employment protection for individuals," commented Peter Cheese.“The variety of business models in the gig economy, the different types of working arrangements and the varied circumstances of people engaged in providing services in different ways means finding the right response to prevent abuses is difficult, without penalising those who are benefitting.“We are pleased that the government has commissioned Matthew Taylor to lead a review of modern employment practices and look forward to working with his team. The government also needs to take a number of steps to help clarify people’s employment rights and enforce existing legislation better, such as supporting a ‘know your rights’ campaign, so more people are aware of what protection they can expect.“We need better guidance for employers on atypical working, setting out the key principles of good work and responsible employment and the HR and people management practices that underpins this," he concluded.

Read how Cisco is responding to current employment trends through its mobility policies in the upcoming spring issue of Relocate magazine. Reserve your copy here

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