Should rural embrace the “gig” economy?
Much ado is being made of the “gig economy” right now with reports that within a decade the majority of our workforce will be freelance and that almost 50% of millennial workers are already freelancing. This workforce trend is causing a great deal of concern, with governments attempting to legislate it, and court rulings trying to stop it.
Currently over 50% of all new Canadian jobs are considered “non-standard” (part-time, temporary, on contract, freelance, self-employed or unpaid positions) according to a report by Ryerson University.
Is this a problem? Or an Opportunity?
Two things are happening simultaneously:
The first is that workers are demanding greater flexibility, control and freedom and are choosing independent work over permanent employment while businesses are seeing the innovation, cost-saving and talent management benefits of hiring independent workers.
According to the McKinsey Global Institute approximately 70% involved in the gig economy do so by choice.
In a recent Randstad report the reasons employers are giving for building an agile workforce are
- the ability to staff up or down as needed
- to prepare for talent shortage in coming years
- increased worker interest in non-traditional employment
- a broad-based response to globalization.
Concurrently, because of the speed at which the above is happening, there are workers who are being forced into the gig economy in order to find employment and there are businesses being pushed into hiring flex workers instead of employees in order to stay competitive.
In Canada, the percentage of workers with multiple jobs had more than doubled from 1975 to 2015. 5.3% of workers had multiple jobs with almost 959,000 working at least two jobs in 2016.
In Ontario, 78% of workplaces were in violation of the Employment Standards Act, 2000 (ESA) in the summer of 2015.
Governments are in reaction mode trying to address both things:
- Promote globalization, workforce agility, and innovative business models
- Exercise control and impose regulations that they believe are necessary to protect workers from what they call “precarious employment.”
The problem with trying to control naturally occurring trends by imposing countermeasures is that there are usually unintended consequences. For any of us who lived through the seventies in rural areas and saw the introduction of foreign species (various animals, bugs, plants) to control pests — we know the result of interference without thorough understanding — most often it’s the creation of another pest.
If we can agree that employer and worker motivations can (and do) vary, and that a solution for one can have negative consequences for another, the natural conclusion is that we need to embrace and support CHOICE in our communities. Choice is the smart mantra for a new era of work and our ability to support and promote choice is going to give rural communities a competitive edge.
What are two of the biggest issues rural communities face?
Population Decline / Demographic Changes
- outmigration of our youth
- aging population
- lack of living wage employment opportunities for youth
- retirement of baby boomers
- lack of skilled labour needed for business development
How can both exist simultaneously and what came first? It’s a chicken or egg scenario and the last time I checked there was no definitive answer. I believe we have to tackle the issues simultaneously and become experts at matchmaking, while fully exploiting the “gig economy” — providing opportunities for youth and skilled labour solutions for businesses.
Understanding that youth are not leaving rural communities solely because of the lack of employment has to be part of a holistic approach to solving the problem. Acknowledging that work preferences and needs can change over time is also important — seeing rural employment as a continuum of choice and not a single pathway. Some older millennials, who are starting families, are realizing that they’ve traded income security, and the ability to borrow, for their freedom and flexibility, and are now hoping to find more stable work. The reverse is happening for retiring baby boomers, leaving permanent full-time employment and excited about short-term projects that allow them the flexibility to work on their own terms. Single focus solutions will serve no-one throughout their entire life.
Research tells us that, for the most part, millennials are choosing and even driving the gig economy. Economic developers realize that productivity is what drives wages. Studies worldwide have shown that freelancers have a higher level of satisfaction in their work lives than those with traditional jobs by choice; and, job satisfaction is directly linked to higher levels of productivity.
Connecting to flexible employment is easier than ever with services like Flexjobs that specifically profile employers looking for remote workers. The issue of where one lives becomes unimportant — removing at least one reason for moving to the city.
Our employers are struggling to find skilled labour, and while not all work can be done off-site, a Workshift Canada report says that 50% of all jobs are at least partially telework compatible (telework being remote work.) There are many platforms to connect employers to a global skilled labour force; www.freelancer.com and www.upwork.com are just two of them.
The term “precarious,” used to describe vulnerable workers, can also be applied to business owners about to scale. A company entering a growth stage has to make risky strategic employment investments. The cost and long-term commitment of hiring a permanent employee when trying to scale, places the business in a vulnerable position. Many businesses stay stuck and limited in their ability to compete and grow because hiring an employee prevents them from taking the next step. Small rural businesses are particularly sensitized to this. Risk-free, project-based freelance hiring would allow them to scale their business offerings, test new market opportunities and build assets, eventually enabling them to confidently hire employees. Penalizing instead of supporting businesses for scaling with freelance and contract workers is a step backward.
Connecting Youth to contract work and employers to skilled labour — whether it is local or remote is one level of labour force engagement that enables youth to stay in rural communities and businesses to scale. As the population base grows and the job opportunities increase more involved local networking is needed to connect the dots internally. We have the ability to solve most of our own problems. Embracing one of the biggest workforce trends and proactively supporting those who choose to explore the gig economy, while continuing to support those interested in more traditional pathways to employment is the bugle call of a community taking charge of its own future. Developing programs that support labour force participation in all forms opens and strengthens a community.