Will using gig economy workers damage your brand?

New study by YouGov for Sensée shows 39% of consumers concerned about companies using gig economy workers

The voices heard most loudly in the gig economy discussion so far have been those of employees, employers and the government.

As a customer service business, we thought it would be useful to discover what consumers think as well. You have to look no further than Primark and Sports Direct to see how unpopular employment practices negatively affected their brand reputation, customer satisfaction and sales.

Are consumers indifferent on the issue of gig economy workers, and happy to continue with businesses that use them? Or, is there real concern that could begin to put customers off? We asked well-known pollsters YouGov to find out.

Half of consumers aware of the gig economy

Although the gig economy has had a lot of publicity, there still seems to be a lack of awareness of what it really is and how it works. Only 50% of the 2,033 respondents agreed that they knew about the gig economy – in fact only 17% strongly agreed with the statement “I know about the gig economy and what the possible implications may be for workers, businesses and public services.”

“Only 17% strongly agreed with the statement “I know about the gig economy and what the possible implications may be for workers, businesses and public services.”

This was reflected across all the different demographic segments within the survey and results were similar amongst factors such as age and employment status. Few of the significant differences were in social classes (57% ABC1 vs 41% C2DE) and across areas of the country (London 61% vs. Midlands 41%), however there was a significant gender difference (Male 54% and Female 46%).

This could be due to the proliferation of higher profile services in the South East and conurbations, but it is surprising that there isn’t an even higher awareness amongst millennials as this demographic is widely thought to be both suppliers to, and consumers of, the ‘on demand’ economy.

Most wouldn’t want to be a gig economy worker

The survey highlighted a general reluctance amongst the general public to work in the gig economy. Only 27% agreed that “they would be happy to be self-employed and work as part of the gig economy, as either a main or supplementary source of income,” with 41% disagreeing and a further third (31%) undecided.

Only 27% of respondents agreed that “they would be happy to be self-employed and work as part of the gig economy, as either a main or supplementary source of income.”

For the people that said that they knew about the gig economy and how it works, the responses were polarised, with 33% saying that they would be happy to work in the gig economy, but with 49% disagreeing. These responses don’t vary significantly by gender but, unsurprisingly, 18-24 year olds are more likely to be happy to be self-employed and work as part of the gig economy (33%). However, this tails off as people get older with only 25% of 55+ respondents stating that they would be happy to do so.

This response – i.e. more people saying they wouldn’t work in the gig economy than would – remains steady across pretty much all the other demographic splits except for two potentially interesting areas. Firstly, people who are currently out of work, but don’t classify themselves as unemployed (34%), and secondly, those who have children under 5 (34%), are the few segments in which more people would work in the gig economy than wouldn’t.

This could be a very important finding and one that maybe goes against a prevailing argument that the majority of people currently working in the gig economy do so out of choice. People who are out of work but don’t classify themselves as unemployed could represent a group of eminently employable people who may be unable to conform with the requirements of a ‘normal’ job, but who still want to work. Similarly, parents with children under 5, maybe constrained by the responsibilities of caring for small children, still want to or need to work, but require the flexibility around working hours and/or location that gig economy work offers.

Considerable concern about companies using gig economy workers

We also asked people what they thought of the companies that employed people on this basis and the results were pretty unequivocal with 39% agreeing that they were “concerned about using companies that employ/commission gig economy workers,” and only 17% disagreeing with that statement and a further 45% undecided or don’t know. Again, the impact of awareness is important, and the 39% that agreed to that statement further increased to 52% for those people who responded that they were aware of the gig economy.

39% agreed that they were “concerned about using companies that employ/commission gig economy workers.”

One of the most significant differences in responses were when segmenting by age, where 32% of 18-24 year olds agreed, compared to 43% of those aged 55 or over. Whilst this is likely to be a true reflection of their concerns, it may be because as consumers, they could likely be swayed by a lower price and increased convenience more often than not.

Good for businesses, bad for workers

More people agreed (33%) than not (20%) that “the gig economy was good for UK businesses and organisations,” but that at the same time more people agreed that “the gig economy is bad for people who choose to be gig economy workers” (34% v 16%).  Further, a majority of respondents believed that gig economy workers should have the same benefits as traditional workers (access to public services, benefits and pensions) (55%) even if they contributed less, proportionately, in tax and national insurance and that the “UK government should do more to protect the rights of gig economy workers” (68%).

More people agreed (33%) than not (20%) that “the gig economy was good for UK businesses and organisations,” but that at the same time more people agree that “the gig economy is bad for people who choose to be gig economy workers” (34% v 16%).

These potentially conflicting viewpoints, start to unravel the crux of the problem in that if there are three parties involved, companies, governments and workers, the rewards and costs of the gig economy are not currently being shared equally. If you add in a fourth party, the customer, it could be argued that companies and customers are the ones that benefit and reap the rewards, while the government, in reduced tax and national insurance income, and workers, with reduced income, security and rights, are bearing the cost.

About the research

The research was conducted by YouGov for Sensée on 1-2 June 2017. The sample size was 2033 adults (18+) from across Great Britain. The surveys were conducted online and the results have been weighted to the profile of all GB adults (18+). The worst-case margin of error is ± 2.2% at a 95% confidence level.

The gig economy: what needs to change?

Steve Mosser, CEO, Sensée writes for Work Wise Week

Steve Smile V2

Hardly a day goes by without an article on the gig-economy appearing in the media. And from high-profile court cases brought by workers that object to the lack of employment rights and benefits, to stories of individuals who are living happier, more fulfilling lives because of it, the gig economy is sure to provoke strong – often polarised – points of view.

According to the CIPD, 4% of working adults aged between 18 and 70 are working in the gig economy, with approximately 1.3 million people now working two jobs or more. Often referred to as “slashies” – think waiter/delivery driver, make-up artist/blogger and gardener/Uber driver – many choose to work this way, enjoying the freedom, variety and flexibility that this way of working brings. But others do it out of necessity when, for instance, they cannot secure a full-time job with a sufficient income (and benefits) to support a family.

Consulting firm McKinsey estimates that 20-30% of the working age population in the EU-15 engage in independent work, and has come up with a great way of categorising worker motivations, which essentially boil down to choice and necessity. 30% of gig economy workers are ‘free agents’ who actively choose independent work and derive their primary income from it. Approximately 40% are ‘casual earners,’ who use independent work for supplemental income and do so by choice. ‘Reluctants,’ who make their primary living from independent work but would prefer traditional jobs, make up 14%. And the ‘financially strapped’ who do supplemental work out of necessity, account for 16%.

This ‘gig’ way of working is set to increase rapidly as digital platforms increasingly connect supply with demand. And clearly, this, and other external factors: consumer preference, particularly as millennials enter the workplace, as well as economic factors, will all impact the ‘choice vs. necessity’ split.

I recognise that many people choose to work this way, and that they are happy with what they ‘get out of it’. I also recognise that organisations need innovation and agility to compete effectively. However, I am concerned for those that work this way out of necessity; often people in low paid and unrewarding jobs, taking on risk through disguised self-employment. And I’m also concerned that the UK economy is missing out on the income that it genuinely needs to provide protection and opportunity for an expanding population.

Many contractors working gig-economy–type jobs lack healthcare and retirement benefits, are at the mercy of their employers’ scheduling needs and, despite being promised flexible hours, find themselves little more than glorified service workers. As it stands today, some people are being pushed into jobs that neither offer fair pay and protection nor dependable hours – in fact, some workers are faced with an employment outlook that is more precarious than it’s been in decades. Has the gig economy created an employment model that robs workers of the rights they’ve earned over more than a century of fighting?

Furthermore, while some organisations undeniably benefit from this economic model, others find it harder to compete, as they choose to employ people, and this comes at a price in terms of NI contributions and other onerous operating costs.

We need to seriously examine how the gig economy is regulated. The courts have gone some way, as shown in the recent Uber and Deliveroo cases, and it’s been helpful that we’ve seen some decisions, but what we need is a better clarification from the government around what constitutes employment, worker and self-employed status; first then, can we start to change things for the better.

Technology and new business models are creating opportunities, but also challenges for UK employment legislation. There is a strong case for Government to act to both proactively help organisations adapt their working practices and to clarify employment status, so that workers get the benefits they are entitled to and that the correct national insurance and taxation contributions are paid. This may well mean a brand new classification, alongside employed and self-employed statuses, as this would better represent the way the world is moving.

Only then can we embrace this inevitable disruption, and ensure that the gig economy can deliver innovation and flexibility to employers, fair working rights and protection to individuals, and economic benefits to the United Kingdom. After all, the gig-economy isn’t going anywhere so it all boils down to making it fairer for all concerned.

The gig economy: Is it time to change the law?

Halfway through 2016, the term gig economy was thrown into the limelight. Although suggesting a new phenomenon had made an appearance, all that had really happened was that someone came up with a fancier name for freelance work, enhanced by the use of technology. It also prompted the question of whether we should change the law around it.

With fewer people working in traditional “jobs for life”, the gig economy got off to a flying start. However, now we’re further down the line it has transpired that many businesses are in fact using the gig economy to cut the costs of employing workers – and we should change the law to prevent it. Read more

Article published in RealBusiness.co.uk