HR Insights
March 24, 2021

The gig economy: What can traditional employers learn from the gig model to improve their employee experience?

The allure of gig work is real for today’s workers – but there’s more that “traditional” employers can do to compete by providing a great experience and growth opportunities, while also leveraging their skills and expertise as part of broader talent strategy. In the first of a three-part blog series, we look at tangible ways employers can recruit and retain employees who might be attracted to gig work options.

Table of Contents

Although many employers have recently made progress to improve their workplaces by providing stable schedules and a predictable income, for some, these strides came too late. Gig platforms offering food and grocery delivery, transportation, and task-based online services are reshaping work, the worker, and even the employer. We often hear about the benefits available through gig work, but can the model actually offer a better alternative to traditional employment?

According to a 2019 study conducted by Edelman Intelligence, about 57 million American workers were freelancers (a common label used by gig workers), or about 35% of the U.S. workforce. The three most common reasons traditional workers gave for choosing freelance work were "to have flexibility in my schedule (i.e., what days or times I work)" (76%), "to earn extra money" (73%), and "to be my own boss" (72%).

However, gigs may possess fewer unique advantages for workers than we think. Instead, gigs capitalize on the failures of traditional employment. If traditional employers addressed schedule inflexibility, inadequate pay, and poor management, they could improve work for workers and worry less about losing their workforce talent to gig work.

Related: The growth of the gig economy: Are you keeping up?

In this three-part series, we’ll explore the appeal of and challenges with the gig economy model for today’s workers, and uncover the untapped opportunities for organizations to better attract gig workers and leverage alternative working arrangements in an increasingly fluid future of work.

In part one, we dive into the tangible ways that employers can do more to recruit employees who are attracted to gig work options.

To work or not to work, that is the "choice"

At this point, it’s unclear whether the value that gig work is said to bring to workers and society has actually been proven. HR departments within the gig economy function differently, gig workers may have fewer peers and co-workers to talk to, and gig workers’ pay and hours are, thus far, protected by fewer laws. It’s difficult for gig workers to assess whether a move to gig work has put them in a better overall position than traditional employment. For a deeper look at the presumed benefits of gig work, we can start with schedule flexibility.

Often, gig workers turn to this work after a major life event, such as becoming a parent, losing a full-time job, or developing a health condition. Setting your own schedule can be an immediate benefit of gig work — accept rides, pick up orders, and work on projects — all when and where you want. But this no-strings-attached approach isn't the experience for all. In fact, some gig requirements may seem eerily similar to the restrictive employment situations these workers may have thought they were leaving behind them. Grocery delivery gig workers must sign up for shifts, drivers can only reply “yes” or “no” to the rides they are offered, and freelancers may not get sufficient work due to a bad rating or low per-task rates. Unfortunately, many have found that while gig opportunities appear ample, adequately sourcing their own can be difficult.

First of all, not all opportunities are created equal. According to a 2019 study performed by SOCIUS, at Instacart, workers need "early-access status" to get the best shifts. Once shoppers obtain the status, "they must navigate rather rigid parameters in order to maintain it. To start, there is the requirement that they have worked at least 90 hours over the previous three weeks or 75 hours over the previous three weekends. Workers also lose early-access status if they receive more than five “reliability incidents” during a rolling 30-day window. A reliability incident can be issued if a worker cancels a shift within six hours of the start time, fails to be in the designated work zone during a shift, or is kicked off-shift for declining too many orders (four in a row) and then fails to log back on within two hours." Only early-access shoppers get real flexibility. The rest just have access to what’s left over.

Building flexibility into work

The second challenge of sourcing work is that there may be little visibility, or few tools, to help the worker understand how to get more or less work. Not only do gig workers have to know the right times and days to work, they also need to rely on the algorithm favoring them. In the transportation industry, for example, do workers need to park at a specific strip mall? Should they stay up late to offer more downtown rides? Is there an attendance dashboard to track reliability incidents? Are there warnings for when the worker is close to losing status? Not only is this level of transparency unlikely, the parameters aren’t flexible or choice-driven. In fact, such restrictions dissolve the worker's ability to determine their schedule, and when they fail to maintain certain attendance standards, they are penalized in the same way as outmoded points-based attendance systems.

Related: How to improve your hourly associates’ work-life balance with better scheduling

So, while gigs can offer flexibility, it may not be reasonable for workers to expect more freedom and a consistent source of work.

Traditional employers face cross-industry competition due to the allure of new gig work options, but there are tangible things these employers can do to win back their workforce. Employers can:

  • Capture a worker’s input on their availability, and then apply those preferences to the schedule, automating the tedious back-and-forth communication between managers and workers.
  • Provide a schedule in advance on a mobile device, so that workers can count on predictable work and manage shift trades and bids conveniently.
  • Offer transparency so that, when attendance incidents do occur, workers can view and track them, recognizing the short-term and long-term consequences, and proactively discussing them with a manager.
  • Adjust schedules so that, when a worker wants to use paid time off the submission is easy, and doesn’t leave the business stranded for coverage.

Not every employer can convert their business to remote or gig-based work, but they can still make work more flexible. Examples may include soliciting input from their workers, providing predictable schedules, and enabling better communication and transparency around attendance. These options can provide more traditional employers with the edge they need to recruit and retain their top talent.

Read the rest of the gig economy series:

Can flexible pay bring the appeal of gig work to traditional employment?

What HR leaders can learn from gig work to create engaging experiences for their people

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