The gig economy – whose name comes from the occasional collaborations of jazz musicians, which allowed them to survive – is still growing rapidly on a global scale, hand in hand with technological development but also with the precariousness of the economy.

In the past 10 years, the gig economy has created jobs encouraging people to take advantage of self-employment opportunities that allow them to work remotely or while on the move.

According to a McKinsey Global Institute study, between 20% and 30% of workers are expected to participate, to varying degrees, in gig economy activities. However, along with the rise of gig work, there is growing concern about the lack of social protection and the precarious nature of this type of employment. What is the reason?

The gig economy undoubtedly opens doors to entrepreneurship and increased income, but the absence of conventional employment benefits and job security raises legitimate concerns. Be that as it may, this phenomenon, characterised by short-term flexible jobs often facilitated through digital platforms, has gained significant traction in countries such as Australia and New Zealand.

READ MORE | Decoding the gig economy future

Australia: Challenges of working in the gig economy

Australia has substantially increased gig economy participation over the past decade. A report from the Australian Bureau of Statistics showed the number of gig workers in the country increased by 55% between 2012 and 2019, reaching over 1.4 million individuals.

One of the driving factors behind the gig economy's popularity in Australia is its flexibility to workers and employers. Platforms such as Uber, Airtasker, and Freelancer have become household names, allowing individuals to monetise their skills and assets on a project-by-project basis.

However, this growth has not been without challenges. A 2023 study by the University of Melbourne highlighted concerns regarding job security, lack of employment benefits, and the potential to exploit gig workers.

Additionally, Australian Prime Minister Anthony Albanese has been under increasing pressure to update labour laws to better accommodate the unique circumstances of gig workers.

In response to these concerns, the Fair Work Commission has initiated discussions on developing a legal framework that balances flexibility and protection. The goal is to establish minimum standards for gig workers, ensuring they have access to entitlements such as sick leave and superannuation.

READ MORE | Landmark agreement to protect gig workers

New Zealand: Navigating the gig landscape

Across the Tasman Sea, New Zealand has also witnessed a surge in gig economy participation, albeit on a smaller scale than its larger neighbour. Statistics New Zealand reports a 35% increase in gig workers from 2012 to 2020, surpassing 250,000.

In New Zealand, gig work spans various sectors, from transportation and accommodation to freelance writing and graphic design. The rise of platforms such as Fiverr and TaskRabbit has facilitated the connection between gig workers and businesses seeking short-term services.

Like Australia, New Zealand faces challenges related to the gig economy, including questions about worker classification, employment benefits, and fair compensation. The Ministry of Business, Innovation, and Employment has acknowledged these concerns and actively engages with stakeholders to explore potential regulatory solutions.

Key points for talent leaders

For talent leaders in Australia and New Zealand, several key takeaways emerge:

Growth and opportunity: The gig economy is rapidly expanding, offering significant opportunities for businesses to tap into a flexible and dynamic workforce. Talent leaders should consider integrating gig workers into their talent acquisition strategies to leverage specialised skills and adapt to fluctuating workloads.

Flexibility versus security: While the gig economy provides flexibility for workers and employers, it raises concerns about job security and the lack of traditional employment benefits. Talent leaders must balance the need for flexibility with the provision of fair compensation and support to gig workers.

Regulatory landscape: With the rise of the gig economy, governments are revaluating labour laws to better accommodate gig workers. Talent leaders need to stay informed about legal changes and ensure their organisations comply with new regulations regarding gig employment, such as entitlements to sick leave and superannuation.

Workforce management: Managing a workforce that includes gig workers requires different strategies than traditional employment. Talent leaders should develop policies and practices that address the unique aspects of gig work, including worker classification, payment models, and performance management.

Technology and platforms: Digital platforms are crucial in facilitating gig work. Talent leaders should be familiar with the leading platforms in their industry and consider how to use technology to connect with gig workers efficiently, manage projects, and ensure quality outcomes.

Social protection and benefits: The absence of conventional employment benefits for gig workers is a growing concern. Talent leaders should explore innovative ways to provide social security through partnerships with third-party providers or by advocating for policy changes.

Cultural integration: Integrating gig workers into a company's culture can enhance loyalty and productivity. Talent leaders should consider including gig workers in team meetings, professional development opportunities, and company communications to foster a sense of belonging and alignment with organisational values.

Global perspective: The gig economy is a worldwide phenomenon, with varying degrees of participation and regulatory environments across countries. Talent leaders should adopt a global perspective, understanding the nuances of gig work in different regions to effectively manage a diverse and geographically dispersed workforce.

The transformation witnessed in the global labour market, underscored by gig work's significant growth and potential, is not a fleeting trend but a permanent shift that redefines employment.

The compelling insights from Australia and New Zealand's experiences serve as a clarion call for talent leaders everywhere to adapt, innovate, and lead purposefully.

The gig economy presents an unparalleled opportunity to harness a flexible, dynamic workforce capable of propelling businesses to new heights of agility and competitive advantage. However, this opportunity comes with challenges, notably in balancing the flexibility companies desire with the security and support workers need.

The imperative for talent leaders is clear: to navigate this delicate balance with strategic acumen, ensuring that the pursuit of flexibility does not compromise fairness or undermine the well-being of gig workers.

Moreover, the evolving regulatory landscape surrounding gig work necessitates vigilance and proactive engagement from talent leaders.

Staying abreast of legal changes and advocating for policies supporting business growth and worker protection is essential. By leading the charge in developing fair and sustainable gig work models, talent leaders can set new industry standards that ensure gig workers are valued and protected.