The gig economy is exploding across the globe, but until recently has largely existed separate from the world of traditional permanent recruitment. With a number of structural changes occurring within the local market, this separation may come to an end.
For recruiters, the question is simple: how will this convergence affect your relationships with your clients, and your ability to support their changing needs for talent between permanent and contract.
In this blog, Oncore examines how shifts within the gig economy may drive transformation for the broader recruitment industry, helping you better navigate a changing market.
While commonly thought of as the domain of delivery drivers, rideshare operators and manual labourers, players within the ‘gig economy’ are making a big push into knowledge-based industries such as software development, human resources and data analysis.
These efforts by companies such as Airtasker are relatively recent and limited in scope, so the overall impact on these markets remains to be seen. However, the first step into a new market is always the hardest and we are likely to see similar efforts in the near future which may have an impact on the talent pool for relevant roles. Already we see apps like Fiverr and the like which offer specialist skills in creative production and design.
An uncertain future: Engagement and payment regulations
Complicating this march of the gig economy into traditionally consultant-based industries is the ongoing legal issues organisations in this space run into. The recent announcement by the small business commissioners of New South Wales and Victoria that they will be empowered to hear disputes from delivery workers on platforms such as Uber Eats and Deliveroo could radically transform the gig economy, forcing new regulation on a previously unrestricted sector. The latest news from Uber looks to spark debate as it launches Uber Works in the US, where shift workers can compare rates and sign up for shifts directly from the app. Already fielding questions around possible compliance and payment issues, the article states that Uber has partnered with US staffing agencies in an effort to sidestep the risks. “The move comes as several parts of the world tighten regulation around Uber’s operations as a ride-hailing firm” including California’s newest bill to grant gig workers holiday and sick pay.
This rise in gig work and the accessibility of it coincides with the increasing trend for highly skilled professionals to undertake project-based work across sectors like IT, research, creative services, project consulting. As a result, the debate around gig work is often framed with contractors and the self-employed in mind. The figure below is taken from the Deloitte 2019 Global Human Capital Trends Survey which found that what it terms ‘alternative workforces’ (gig workers, contractors, freelancers) were also growing in the below industries.
The implications for recruiters
The growth of knowledge-based gig roles means at some point you may have to become an advisor to your client on the viability of bringing in a technology or project specialist on a short-term contract.
As a recruiter, it’s vital that you are across developments in the labour-hire and contingent workforce space. It is important as an agency to invest in the relevant processes and tools to service this growing sector. This means diversifying your offerings into the contractor market and increasing your value. Understanding the regulations and how you can protect your clients in this space will hold you in good stead for a long and mutually beneficial relationship.
The risks for your clients
There are a number of potential problems and risks for your clients if they attempt to hire talent on a gig basis through these services. For example, choosing to bring in a freelancer with no institutional support – either from a recruitment agency or a contractor management company – means that a business can only rely on its own assessment of a contractor’s competency and background when making a hiring decision.
Lack of time and resources is often to blame, however, leaving important factors out of the sourcing process like candidate screening poses risks for your client. Taking recruitment agencies out of the mix and relying on an app can lead to situations where businesses are letting market demands overpower the need for caution, potentially exposing them to significant risk.
Better meeting your client’s needs with a hybrid talent solution
So if your recruitment agency is looking to provide the best service possible to your clients, consider building a contracting offering. Branching out from permanent recruitment allows you to fill a far greater range of needs for your clients, while also helping to smooth out the peaks and troughs associated with traditional, permanent employment.
Expertise in workforce planning and management will also become highly valuable to your clients as they look to expand their contingent workforce.
Building this capability doesn’t need to be taxing and you don’t need to invest in your own systems. If you’d like to start supplying your clients with highly sought after contractors, the fastest and simplest way to do this is to work with a contractor management provider to support your offering. While you build your talent pool and focus on recruiting, a contractor management provider like Oncore can act as your back-office, providing the technology and support to offer contractor management solutions to your clients.
Make sure you partner with a reputable provider to cover the following services:
- Onboarding and administration of contracts
- Payroll Management
- Compliant engagement structures under Pty Ltd or PAYG
- Insurance Cover (as applicable)
- Reporting of contractor rates, margins and volumes
- Risk and compliance management
- Contractor benefits and insights
- Back-office support and account management
The gig economy and the changing nature of modern work may face challenges today but its effect on the engagement of professional contractors is providing an opportunity for recruiters to diversify and add much-needed value. If you’re looking for an all-in-one solution to help you manage contractors including payroll and insurance cover, consider partnering with Oncore. Allow us to streamline your contractor onboarding and administration, so you can focus on finding the right person for the right job at the right time and get your business ahead by offering a hybrid talent solution. Start a conversation with our staff today and discover how we can help your business grow