Adopting a gig economy

TEMPORARY Employment Services (TES) have been used mainly in First World economies whereby organisations have the flexibility to procure required skills on a part-time (ad hoc) or on a fixed-term (temporary) basis.

These services are usually contracted in order to complete a project, cater for a business project (fixed duration), provide additional staffing due to fluctuations in volume of work, as well as to cater for seasonal work.

Adopting a gig economy within South Africa could be the turning point in the lowering of the unemployment rate and increasing the country’s gross domestic product (GDP). In January, the US saw temporary employment rise by 81000 jobs, which amounted to 83.5% of new jobs for the month.

The latest unemployment statistics for SA showed an increase of 32.5% with 7.2 million people jobless. To bolster a gig economy in South Africa, companies require a constant supply of skilled and unskilled staff with the ability to manage the workforce. This is where a TES provider can assist.

Gig economy overview

By definition, a gig economy refers to a labour market whereby short-term or freelance work is preferred over permanent jobs. A gig refers to each task or project that is worked on by an individual. Locally we will benefit from a gig economy because people are provided with an opportunity to earn an income while permanent jobs remain scarce. This flexible approach will decrease unemployment rates as individuals have the opportunity to participate in temporary work rather than remain static and unemployed.

Temporary work also provides individuals with vital job experience that can be used in future endeavours. This can be useful to younger people in terms of skills development, skills specialisation and being able to become multiskilled, which makes them more “attractive” in the job.

Both employees and companies will benefit, as employees become multiskilled and negotiate their own terms and conditions with the company, and companies will obtain the skills they require while ensuring cost-effectiveness. Compliance all round is an issue that many companies struggle with. However, TES providers manage the workforce, while ensuring compliance on various levels within the business, which allow organisations to focus on their core business.

Policy adjustments for businesses and legislation

The new mindset of temporary employment has not had a strong following in South Africa because of traditional and rigid business structures. To bolster the gig economy in South Africa, businesses would have to change company policy and enlist the services of a third party to ensure the amendments are implemented correctly. Legislation would need to be drafted to cover the areas that fall in between an employee and independent contractor. While there are various compliance requirements for businesses, including adhering to labour laws such as the Basic Conditions of Employment Act and the Labour Relations Act, it is important to note that independent contractors are generally excluded from this legislation. As such, the matter would need to be judged on a case-by-case basis.

This creates the need for a partner that can assist with drafting and implementation of policy changes and help the organisation make the most of the gig economy while ensuring the organisation is legally compliant.