When we think about recent employment history, i.e. in the last 5 years, not just in New Zealand but throughout the world, it was very common to see someone being a permanent employee in a role for at least a couple of years. Take it back a notch to the previous generation of employees and you would find that a five-year stint at one company could be considered relatively short term, or at the most, average. But things have changed drastically all over the world and across many industries, where the new norm of a “gig economy” has emerged.

A gig economy is one where we are seeing more and more workers doing multiple short, temporary assignments, or “gigs”, simultaneously as independent contractors, rather than being employed at a single company on a permanent basis. A study conducted by software firm, Intuit, predicts that by 2020, the world’s largest economy, America, will consist of 40 percent of independent workers.

There are clear signs that a gig economy has started to emerge in New Zealand, but the question remains – who are the ‘giggers’, are we ready for them and what does it mean for our businesses and workforce? Paula Williams from Simpson Grierson, as part of her Master of Technological Futures, conducted a study on the future of jobs. Findings from the study highlighted that “we are rapidly moving away from the traditional ‘job for life’ into a future of ‘multiple gigs for my skills’.” Another study into the effects of the gig economy on employment by Auckland University found that people “who started out in a non-standard work arrangement had a low likelihood of changing to a standard job.” This indicates a long-term impact on both businesses and the workforce. If people continue to join the gig economy, it is likely they will remain part of it in the future and the percentage of the workforce being giggers will continue to increase.


Who are the Giggers?

Generation Y, better known as Millennials, which includes workers in their mid 20’s to mid 30’s, have so far been leading the gig economy trend with the post-millennials, or Generation Z, looking to play a big part in keeping this trend going. The upper age range of Generation Z are currently in their early 20’s, consisting of those now entering the workforce and would include the likes of fresh university graduates. The flexibility and sense of purpose that comes with working in a gig economy can seem too good to ignore, which means we’ll be seeing a lot of people from the various “generations” supporting it.


How prepared are we and what does it mean for recruitment?

From an employee’s point of view, the fact that being employed is now something other than simply earning a living, is an absolutely refreshing thought. The need for flexibility and work-life balance is far greater today than what it used to be, and the gig economy trend seems to be well received by the current workforce.

On the other hand, from an employer’s point of view, “the tables have turned” is a fair statement to make. Unlike the past, a major shift in power has taken place where employees in higher skilled industries are in demand and employers must prove their worth in the hope that they will attract high-quality staff.

Easy recruitment is no longer a thing. A recent study conducted by Mercer Marsh “People Risk Survey Report 2018”, found that attracting talent, talent scarcity and talent retention were all in the top 5 people risks being faced by NZ organisations. Recruiters are being forced to headhunt skilled workers and something as simple as a candidate actually arriving to their interview has become a nail-biting scenario, with ‘ghosting’ now being an issue – where candidates simply don’t turn up. Recruitment strategies need to change to adapt to the gig economy and any recruiter will agree that the offering of flexible work has made it to the top of the list of candidate demands. Being more available, selling the organisation and role as a true opportunity to candidates and responding to candidate applications much faster than in the past, are examples of the changes that are taking place in the recruitment world.

It would be easier to go about business as usual and refuse to give in to the “entitled” attitudes of the current generations in the workforce. However, if businesses don’t keep up with the trends in the economy, they will lose out on attracting the best workers for their organisation.


Why it could be a good thing

The reasons for the rise of this new trend vary, with one of the main causes being that people are creating an environment where they can spend their efforts and time in an area of work in which they specialise, and actually want to do. This ultimately leads to huge benefits for both the worker and the employee.

Benefits for the worker:

  • Flexible working – they get to choose what they want to do and when they want to do it. One of the main issues that people have faced in the past and are still facing even in present times, is the struggle to get that perfect work-life balance. With the level of choice in a gig economy environment, the ideal work-life balance seems more achievable.
  • They love the work they do – one of the best ways for an employee to be engaged with their work is to do something that they enjoy and are good at. Many workers feel like they have a real purpose behind what they do. Instead of being permanently attached to one organisation with the sense that they “have to” do the work as part of the job, short term contracts allow workers to feel empowered and truly satisfied that they are really making a positive impact through the high-quality skilled work they provide.
  • They get to choose who they work with and gain industry knowledge – workers choose where they want to work and have the option of working concurrently for multiple organisations on multiple projects. This gives them significant exposure to a considerable amount of knowledge in terms of how the relevant industry works, as well as the latest systems and processes involved.
  • Autonomy – Most people love the autonomy that comes with working as an independent contractor. The concept of being your own boss appeals to many as it gives people a feeling of true independence and seniority that may otherwise be next to impossible to achieve if they were an employee in an organisation.

Benefits for the employer:

  • Motivated and engaged staff – Having people who want to do the work leads to better engagement, outcomes and productivity.
  • Skilled workers available when needed – Instead of having to pay someone to be employed the whole year round, employers can hire skilled staff based on their current needs making it a more financially viable option for businesses.
  • Spoilt for choice – By building a strong network of independent contractors, businesses will be able to choose who they wish to work with, rather than being “stuck” with the same employee. With increased competition in the labour market within a gig economy, employers will have more talent to choose from. Based on the skillset required for the job, employers will be able to decide who they want working on their project.
  • Employer Value Proposition (EVP) increases – Keeping up with this trend means that the organisation becomes one that promotes flexible working, which in turn raises their EVP, making it a desirable business to work with. If an organisation wants to attract the best talent, they need to ensure that they keep up with the current market trends.


What could go wrong?

As the saying goes, there are always two sides to a story. Just like the pros in any situation, there are cons that come with getting on board the gig economy.

Cons for the worker:

  • Compromised job security – One of the biggest downfalls, possibly the main one that would keep someone from jumping on the bandwagon, is that there is a fairly high level of unpredictability in terms of continuous work. One would need to be mentally and financially prepared to not work for a period of time between contracts. Without this, working in a gig economy might end up being more stressful than freeing, which is essentially the whole purpose of it.
  • Social isolation – As employees, our co-workers play a huge part in us wanting to wake up in the morning and actually feel like going to work. We build positive relationships with others at the office and being part of a team gives us that feeling of support and unity. Without it, it would be very easy to feel lonely and isolated.
  • Lack of opportunities for training and development – businesses generally focus on employees when it comes to training and development. Gig economy workers are usually left to themselves to keep their skills current. The benefits of regular performance reviews are often also missed for these workers.
  • Being overworked – During periods of high demand, a worker can find themselves in a position whereby they take on too much at a time. Although some people thrive on working under pressure, there is a fine line between that and being stressed and overworked. Maintaining a healthy balance is key in this case.
  • High demand jobs best suited to the gig economy – If the worker’s skills are not in high demand, it might be more difficult to successfully tackle the gig economy. Unless a worker specialises in a skilled area of work, getting their next gig might be difficult.

 Cons for the employer

  • Instability in the workforce – Having short term contractors can mean that employers will be forced to tailor the work in a way that is suitable for independent contractors. This would likely be an ongoing process of creating various short-term projects or assignments to reach the business’ long-term goals. This could also mean more work for the employer in terms of tracking the various projects.
  • Questions over reliability – Due to the nature of the gig economy, it can be difficult to gauge if someone working remotely is genuine and reliable or if they are lazy. However, with higher skilled workers this would not be as much of a concern as past projects and their up to date skills would be a good indication of their abilities.


Need Assistance?

We’re here to help. At POD | AdviceFirst we can assist you with developing relevant policies to support your workers, whilst meeting your legal obligations. We can also assist with developing a workplace and culture to support the gig economy, plus review your people and recruitment strategies to ensure you’re able to attract and retain talent.


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