CIPD sees rising income for 1.3 million workers in Gig economy

A new report by the Chartered Institute of Personnel Development (CIPD) has revealed that Gig economy would boost the income of no fewer than 1.3 million workers even as it predicted that thousands of unemployed persons could miss out on employment opportunities.

Gig economy is a situation in which temporary jobs are commonplace and where companies tend toward hiring independent contractors and freelancers instead of offering full-time employment to job seekers.

Recent research carried out by the CIPD showed that four per cent of working adults between the ages of 18 and 70 work in the ‘gig economy’, while nearly two-thirds of them or 63 per cent believe the government should regulate the practice to guarantee them basic employment rights and benefits such as holiday pay.

The report was based on a survey of 400 workers in gig economy and more than 2,000 others, as well as 15 in-depth interviews with the gig economy workers.The research also found that contrary to rhetoric, just 14 per cent of respondents said they were involved in gig employment because they could not find alternative employment.

However, some of the respondents confirmed that the commonest reason for taking on gig work was to boost their income. Overall, 46 per cent of gig economy workers are also about as likely to be satisfied with their work as 48 per cent others in more suitable employment are with their jobs.

The Chief Executive of the CIPD, Peter Cheese said: “This research shows the grey areas that exist over people’s employment status in the gig economy.”He pointed out that it was often assumed that the nature of gig work was well suited to self-employment, which was true in most cases.

He said research conducted by CIPD, the professional body for Human Resources (HR) and people development also showed that most gig economy workers were either permanent employees, students, or even the unemployed who choose to work in the gig economy to boost their income.

“Our research suggests that some gig economy businesses may be seeking to have their cake and eat it by using self-employed contractors (outsourcing firms) to cut costs, while at the same time trying to maintain a level of control over people that are more appropriate for a more traditional employment relationship.

“Many people in the gig economy may already be eligible for basic employment rights, but are confused by the issue of their employment status. It is crucial that the government deals with the issue of employment status before attempting to make sweeping changes, else they risk building foundational changes on shifting sands,” he said.

The report also revealed that only 25 per cent of gig economy workers say it was their main job, suggesting that most of them use it to boost their income rather than depend wholly on it.

In spite of the typically low earnings reported by gig economy workers, they remain on the whole satisfied with their income, with 51 per cent saying they were satisfied and 19 per cent dissatisfied with the level of income they receive. This is significantly higher than the level of satisfaction with pay reported by other workers, where 36 per cent are satisfied while 35 per cent are dissatisfied.

“The research shows the challenge that policymakers face in regulating the gig economy and finding the right balance between providing flexibility for businesses and employment protection for individuals.

“The government needs to take a number of steps to help clarify people’s employment rights and enforce existing legislation better, such as supporting a ‘know your rights’ campaign, so more people are aware of what protection they can expect,” Cheese added.