Beware the gig economy

gig economy is an environment in which temporary positions are common and organisations contract with independent workers for short-term engagements.img_3627

It’s was coined during global financial crisis of 2009. Newly unemployed professionals sought short-term compensation by ‘gigging’ – working a series of small short-term positions.

Now a study by Intuit predicts that by 2020 40% of American workers will be independent contractors. We don’t have sizeable gig economy yet in East Africa, but it is imminent. Before it arrives, here are some points to ponder.

Since 2009 the gig economy has been used to describe the paradigm shift of people using anything from Uber (instead of catching a cab) to staying at a stranger’s house through Airbnb (instead of an hotel).

These gigs come from using idle time and existing assets more efficiently. An Uber passenger gets a convenient ride, while her driver picks up extra cash by micro-leasing his time in a car he’s already financing. An Airbnb guest stays in a house that is paid for or mortgaged.

Uber, Airbnb and other gig players will surely grow and become more powerful. Their growth is unfettered by the cost of owning assets. This is good for drivers and homeowners: with ubiquity will come more demand. However, as the power becomes concentrated around few players per industry vertical, payments to gig service providers will shrink. These big consolidating brands will seek to build margins and squeeze costs.Kristopher Jones, writing in Forbes magazine, expects small businesses to be the focus of new gig economy service offerings. Perhaps revolutionising the delivery of professional services like Accountancy or Law.

In London alone the gig economy has grown 72% in six years. That’s an impressive number, but behind it there’s an issue that shouldn’t be ignored – the people factor.  Five million gig workers in the UK already. And now there’s a debate about whether these people are employees or are just casual workers.

But there’s one thing for sure. These peoples’ loyalties will be to themselves, not the brands they represent.

A CEO once said: ‘One lousy customer experience in our call centre can destroy millions of dollars of advertising’.

So it will be with any disgruntled Uber driver or Deliveroo courier.  They play their part in thousands of customer interactions and they either get it right or get it wrong. That’s a brand in action – and it’s driven by people.

Boardroom platitudes like ‘putting customers at the heart of our business’ are always easier said than done. Delivering a brand promise involves aligning everyone to produce a positive customer experience. Nothing and no one is neutral.

So, wherever you take your business in future, remember this. Your people need to be inspired and empowered to be advocates of your brand. The more remote you make them, the harder your employee culture will have to work.



Chris Harrison leads The Brand Inside.


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