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Why The Gig Economy Does Not Spell The End For Recruitment

The world of work is changing fast and it's throwing up lots of questions, but the gig economy doesn't have all the answers.

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The world of work is changing fast and it's throwing up lots of questions, but the gig economy doesn't have all the answers.

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Why The Gig Economy Does Not Spell The End For Recruitment

The world of work is changing fast and it's throwing up lots of questions, but the gig economy doesn't have all the answers.

Share this article

Even though there are an estimated five million contractor and temporary staff employed in the so-called ‘gig economy’ in the UK, there is still no single, agreed definition of it.

The government’s latest report on the topic created a new definition, stating that it “involves the exchange of labour for money between individuals or companies via digital platforms that actively facilitate matching between providers and customers, on a short-term and payment-by-task basis.”

The same research found that 4.4 percent of the population had worked in the gig economy in the last 12 months, and over half of those involved in the gig economy (56 percent) were aged 18 to 34. In addition, levels of educational attainment were similar between the general population.

These insights are important to gain some clarity on how exactly the gig economy will impact the wider recruitment industry. Knowing who is entering the gig economy, how it is defined, and what industries are most affected will help recruiters to understand how it is currently working, and help them better predict where it is headed.

The traditional method of finding work is changing, and that invariably means that the recruitment industry will be affected in one way or another. However, it is by no means all doom and gloom. The ways in which people work, and want to work, have been changing for years, and the recruitment industry has always needed to adapt to new trends to ensure that it stays relevant.

There are a few other key reasons why recruiters don’t need to panic.

Quality control

The gig economy is not a new concept. People have been working part-time and as contractors for decades. Contract recruitment is a long-established industry, and one that has continued to flourish despite the rise of the gig economy.

It is especially important for experienced contract recruitment agencies to be involved with hiring interim workers for business-critical roles, where quality control is essential – and where companies often feel the pinch of skills shortages. Ultimately, recruiters are still needed to consult enterprises on specific hiring needs, and to source the appropriate candidates at the right time.

Ethics and sustainability

As it currently stands, the gig economy isn't a sustainable enough model to completely replace the traditional world of work. There are many ethical, legal and cultural problems with the way workers are treated within the gig economy, with high profile businesses such as Uber and Deliveroo subjected to court cases, strikes and legal action.

As gig economy workers are classed as independent contractors, they are not entitled to national minimum wage or redundancy, holiday and sick pay.

Workers also have zero protection in the case of unfair treatment or dismissal. This was reflected in the government’s research, too - those in the gig economy were not satisfied with their work-related benefits and level of income, with one in four (25 per cent) saying they were very or fairly dissatisfied with those aspects of their work.

This shows that people still appreciate the traditional security and benefits associated with a permanent, full-time job –and recruitment agencies are still very much needed to help them find those roles.

Recruiters offer more than just sourcing talent

The recruitment industry is constantly evolving to provide more specific services outside of just sourcing and placing talent. Agencies can provide consultancy, talent development and expert support on a level that digital recruitment and gig economy platforms simply can't match.

While this does mean pressure will be put on recruiters to strengthen their candidate and client relationships, the most relationship-focused recruitment professionals will have the opportunity to really stand out in a crowded market.

What next?

It’s difficult to predict where the gig economy will be in the next decade. The government’s report revealed that 41 per cent of current gig economy workers will continue in this type of work over the next year.

However, there are many reasons to believe that the gig economy won’t eliminate the need for traditional recruitment. There are still many issues with the gig economy model that mean recruitment services will remain important for the foreseeable future.

While the gig economy is still getting its act together on quality control, regulations, ethics, and sustainability, recruiters have ample time to consider how best to position themselves to take advantage of the changing world of work.

Peter Linas, is EVP of corporate development and international at Bullhorn.

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Why The Gig Economy Does Not Spell The End For Recruitment

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