The Recruitment and Employment Confederation (REC) is calling on HR professionals to capitalise on the burgeoning “Gig Economy” – digital work platforms such as Freelancer.com, Upwork and PeoplePerHour.com – by defining work opportunities in their organisations that can be fulfilled by Umbrella Company Employees and other freelancing and contracting professionals.

The REC’s CEO, Kevin Green, explains in a recent blog that the gig economy is not only here, but it is rapidly growing as well. The digital work platforms constituting this economy enable employers to access freelancing and contracting talent. Twenty-nine per cent of the employers interviewed for the REC’s latest report on this issue (Gig Economy – The Uberisation of Work) state that these platforms will become important to their businesses in the coming five years.

Green notes: “That’s a huge increase in usage – almost five times as many businesses could be using them in 2021 – almost a third of all UK employers.”

Business and economics research group The McKinsey Global Institute forecasts that these platforms could deliver an additional £45 billion to the UK economy and create new work for 766,000 people.

A major reason why the UK economy has outperformed the vast majority of its international competitors since the global financial crisis of 2008/9, Green states, is its dynamic, flexible labour market. At present, the UK is nearing full employment with record numbers of people now in work (74.4 per cent). And, as the Association of Independent Professionals and the Self Employed (IPSE) has highlighted, much of that work falls under freelancing and contracting.

Presently, Green concedes, 20 per cent of the decision-makers polled by the REC fear that online talent marketplaces may be more risky than beneficial for their businesses. However, a comparable number (17 per cent) believe that the benefits outweigh the risks.

The REC has identified several key opportunities and challenges for HR professionals in expanding their contractor/freelancer operations.

The benefits of using gig workers to undertake project-based assignments: 

  • HR pros can access high-calibre freelancing and contracting professionals rapidly and easily.
  • They can participate in an open, transparent marketplace to source the talent that they need for short-term projects.
  • Costs are reduced because work is undertaken on the freelancer’s premises.

The challenges: 

  • HR professionals need to define work opportunities that freelancers and contractors can fulfil.
  • Measurable work outcomes need to be defined to allow freelancer performance to be evaluated.
  • Effective coaching and feedback by line managers need to be provided to enable gig workers to deliver the intended value.
  • There is a need to develop robust contractual processes to protect organisations from the risk of non-compliance.
  • Professionals need to manage the absence of an independent recruiter to ensure third-party verification of capability, experience and qualifications.
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