How to Be an Ethical Employer in the Gig Economy

Shauna MillerLeadership2018 02 26
How to Be an Ethical Employer in the Gig Economy
Share on Linkedin

The future of work is here, and it doesn’t look like spending 40 hours a week in an office chair. Change has come, and our traditional ways of working are “a relic of a different way of working, and a different technological era,” says Diane Mulcahy, author of “The Gig Economy.

A 2016 McKinsey report found that about 20 to 30 percent of the workforce in Europe and the United States were plugged into the “gig economy.” That’s about 162 million people engaging in contractual and project-based work. Independent workers fill 1 out of 5 jobs in the U.S.

Such arrangements can benefit employers as well as employees. But employing independent workers can be new territory for many employers. Here are three ways companies can promote strong, ethical relationships in the gig economy.

Pay a Fair Wage — And Be Timely About It

Gig workers are often happy working independently; Mulcahy says data show about 75 percent work this way by choice and want to continue. It’s companies who need them, not the other way around as access to these independent workers broadens the talent pool significantly. “I talked to the CEO of a furniture company,” she says, “and he said it’s a policy for them to bring in contract designers. Because what they find is when they have a full-time, staff designers, over time everything starts to look the same.”

The best way to retain this talent, says Mulcahy, is to pay them well. “Employers can acknowledge that independent workers have to pay added taxes and pay for their own benefits, and offer them fully loaded rates.”

An ethical employer will also use transparent, structured payment schedules with contract workers. “The biggest way to de-risk working independently is to structure a contract that includes upfront payment in order to get started, and includes milestone payments along the way,” Mulcahy says. Asking a contractor to wait for payment until a project is completed exposes them to the most risk, so outline your payment system from the outset.

Bring Them Into the Company Culture

As companies employ more independent workers, workforces are becoming more far-flung. If you’re able, flying in remote employees for regular face time is becoming more common. For those working with contract workers who are local, invite them into the office. Just make sure that they have a professional-looking, prepared space to work at when they get there.

“I’ve heard many stories from gig workers whose keycards don’t work. Or whenever they come in, they have the broken chair,” says Olga Mizrahi, author of “The Gig Is Up.” “Small indignities add up over time.” In the same way, small gestures like birthday cards or an invite to the company holiday party can go a long way in making independent workers part of your culture.

And give new additions to your team the same attention you give full-time employees when they start at your company. “Let’s take a person who comes to the office a few times a week,” Mizrahi says. “If you want that person to feel part of the team, specifically for gig workers, it would be awesome if you, as an HR professional, would have an onboarding procedure for that person,” she says.

Offer Them a Path for Growth

It’s important to remember that gig workers do have careers. Though their paths may be nontraditional, independent workers still want steady growth in their jobs. Companies will benefit by maintaining relationships with talented workers as they grow, so keep an open mind about how to best leverage great independent workers.

“Gig economy [employers] have been hamstrung by the quality of the workers they hire,” says Steven Hill, author of “Raw Deal: How the Uber Economy and Runaway Capitalism Are Screwing American Workers.” But, he says, “if they want good workers, they need to offer decent jobs.”

Make sure your independent workers get considered for more challenging and higher-paying projects as you grow together, and nurture your relationships with them. Companies that “show their workforce no allegiance or loyalty,” says Hill, “engender none in return.”

Share on Linkedin