HR: What We Don’t Know About the Gig Economy Might Hurt Us
For all the talk about the “Future of Work”, it still seems a bit abstract, doesn’t it? It can feel like we have quite enough to deal with in the Present of Work, without thinking about what the future might hold. Automation, AI, “Precarious Employment”; the subject is awash in sometimes confusing jargon. Indeed, aside from taking the odd Uber, most HR professionals I know view the “Gig Economy” as a bit of a buzzword, not as an immediate reality requiring our attention.
I’ve come to believe that we’re wrong about that. In fact, I think that the haze of information about what is happening, and what is possible, have obscured a clear shift in the labour market that we need to be paying closer attention to.
What IS the “Gig Economy”?
Gig economy: “The use of online platforms to engage in project- or task-based freelance work delivered over the Internet.” (via iLabour)
Confusion about what gig work is, and is not, is likely related to the lack of good data and clear definitions for what the “gig economy” actually is. I’ve seen this term used in conversations as a catch-all for the general trend towards employers’ increased reliance on contingent employment (that is, fixed term contracts instead of ‘permanent’ employment) and shorter employee tenures, but these are both still variations on traditional employment. The “gigs” upon which the “gig economy” is based are different arrangements all together.
Gig work refers to on-demand tasks or projects done by individuals who are not employed by the organization they do work for, and is distinguished from conventional freelance work by the use of online platforms to mediate between worker and ‘client’ organizations or individuals.
Uber is a well know and recent example, but there are many others that are less visible due to the online nature of the work they mediate (UpWork, Fiverr etc.). This includes micro-task crowdwork sites like Amazon’s Mechanical Turk (scroll down to read an interview with Turker Kristy Milland for more on this!)
Why should HR care?
- So that we are able to prepare and support our leaders and organizations, and adjust our practices to thrive in this new reality, in which existing or new competitors may leverage gig labour first, or more strategically.
- To understand how our moral and professional obligations apply to workers who are not employees. Abuse of online gig workers is all too easy as the oversight and regulation of this segment of the labour market is lagging behind the reality on the ground.
- To safeguard and enhance our continued professional relevance as Human Resources professionals, as ‘the workforce’ continues to fragment and shift outside the traditional definition of an ‘employee’.
“The nature of the global workplace and talent markets is changing fundamentally and moving “beyond employment” (Boudreau et al. 2015). Future leadership will increasingly involve optimizing how one gets the work done, not how one manages employees. Estimates are that more than 40% of work will soon be done by individuals who are not employed by the organization they work for, and that emerging non-employment talent platforms are the key to solving global inequity and opportunity (Manyika, Lund, Robinson, Valentino, and Dobbs, 2015).”
“Yet virtually all present laws, organizational systems, and human resources processes are designed with the assumption that managing full-time employees is how work gets done.”*
“Conventional labour markets are managed by policy makers and shaped by employment laws, collective bargaining, and local norms. But in the online gig economy, platform developers make important decisions on matters ranging from minimum wages to matching.”
And from The Nation:
“ The online platforms of companies like Mechanical Turk provide virtual hiring halls in which people request and advertise miscellaneous help, ranging from sorting someone’s e-mail inbox to participating in an online behavioral study. But questions have bubbled up about how our existing labor laws—many created in the Depression era—can be grafted onto a labor structure that is inherently borderless and perilously “flexible.””
How Big is the Gig Economy?
The flippant answer is probably ‘bigger than you think it is”, but it’s hard to arrive at clear figures, as the data seems to be imperfect, in large part because the definition used to classify gig workers isn’t something that everyone agrees on, with many surveys looking at the broader group of ‘independent workers’ (including temps, freelancers, and independent consultants). Additionally, while some research focuses on workers in a particular geographic area (often the US and/or Europe), gig work arrangements often span borders, with organizations/users in one country, and workers in another.
According to Policy Horizons Canada, an estimated 48 million workers were registered on online work platforms globally in 2013. The market is estimated to be growing at 33% annually, with the number of workers expected to reach 112 million and market revenue to hit US$ 4.8 billion in 2015. They provide a breakdown of workers across platforms including:
- Upwork (9 million freelancers)
- Freelancer (16 million freelancers)
- Hourly Nerd (Over 10,000 MBA graduates from top schools)
- Proz (766,603 translators)
- Fiverr (Over 3 million services)
- Amazon Mechanical Turk (332,519 human intelligence tasks)
- Cloudflower (5 million contributors)
The most current data I could find is via the Online Labour Index (OLI), which is “the first economic indicator that provides an online gig economy equivalent of conventional labour market statistics. It measures the utilization of online labour across countries and occupations by tracking the number of projects and tasks posted on platforms in real time.” (Note that it is an interactive data set, but only includes English-language online platforms, and tracks volume of tasks/projects, not workers)
Who’s Using Gig Workers?
According to iLabour data, the answer seems to be predominantly the United States, with many other countries and regions also leveraging these platforms to a lesser extent.
Interestingly, online labour isn’t just being used for tech work, as I had assumed it might be. As this iLabour chart shows, creative and multimedia work, and writing and translation, also make up significant portions of the work being done through online platforms.
Who are Gig Workers?
A recent Intuit survey of 4,622 workers broke the respondents into five categories. (Note that these are US workers only, so the global outlook might be quite different.)
- Career freelancers (20% of on-demand workers) are “happily building a career through independent work,”
- Business builders (22% of on-demand workers) are driven by the desire to call the shots in their own careers. Interestingly, 55% said they own a business, on top of their on-demand work.
- Side giggers (26% of on-demand workers) are looking for financial stability by moonlighting in the on-demand economy. In this category, 88% say the main reason they do on-demand work is to earn more income, 43% have a traditional full-time job, 16% have a traditional part-time job, and 20% own their own business on top of doing on-demand work.
- Passionistas (14% of on-demand workers) are less motivated by money than the other groups. This well-educated cohort is mostly driven by the desire for flexibility in their work and the chance to do something they enjoy. 38% have a college degree and 29% have a graduate degree.
- Substituters (18% of on-demand workers) are replacing a traditional job they lost–or can’t find one. Not surprisingly, they are much less happy with their work situation than the other free agents in the survey. Among this group, 19% said they were unemployed or looking for a job prior to trying on-demand work.
Giving Gig Workers a Voice
What seems to be missing from much of the available data and metrics is the voice of the gig worker. Why do individuals do gig work, and what risks and advantages do they experience? To find out more I spoke with Kristy Milland, a worker, speaker, and activist (in addition to being a Ryerson student currently studying psychology) who runs TurkerNation.com, the oldest online community for Amazon Mechanical Turk crowd workers.
Amazon Mechanical Turk is on online crowd working platform, which is described (by Amazon) as “a Marketplace for work that requires human intelligence” in which requestors can submit tasks (anything from very simple image identification to more complex web research) and Turkers (Mechanical Turk workers) can select available tasks to complete, at which point they would be paid by the requestor. The majority of Turkers are in the U.S. and reports indicate that roughly half of Turkers have college degrees, with many of them relying on Turking not just as a “side-gig” but an important source of income. Last year, The Nation reported that “Two-thirds of surveyed workers reported that they used MTurk’s platform daily, and a quarter rely on the site for all or most of their incomes.”
Kristy, what drew you to begin Turking, and why have you continued?
“In November of 2005 I read about Amazon Mechanical Turk’s grand opening, and I thought it seemed interesting. I’ve been an internet entrepreneur for the last 20 years, and exploring new online avenues of income has always interested me. At the time I was running a day care and an online consulting business, so I had some free time to dabble with mTurk and see what it was all about. I’ve continued working there because, as a Canadian, it has become more difficult to consult online in the fields I was experienced in. Then, when I closed my daycare and decided to work solely online once again, my husband lost his job. I struggled to find consulting work, so I turned to mTurk as a full-time income. I often worked 17 hour days, seven days a week, just to make ends meet. Once he found another job (as a junior employee starting back at the bottom of the ladder), I decided to return to school and pursue a degree. I was hoping that I could work on mTurk in my spare time as I needed a job flexible enough to work around studying, class and exams.”
Do you think that this type of use of labour (crowdsourcing work, using online gig platforms to connect with workers for short term work) is getting more popular among companies? If so, why do you think that is?
“I believe that this sort of work has been very popular for a long time, far before “gig economy” even became a buzzword. For example, Google has been leveraging crowd work to better its search algorithms for over a decade, and all of their other services also utilize the crowd. Amazon, Twitter, LinkedIn, LexusNexus, Flickr, Facebook, basically all of the major companies online either use third party services, like mTurk, or have their own internal crowds to leverage. From completing work too tedious and time-consuming for a well-paid staff member to do, to increasing the speed work is done by hundreds of times, to the low cost of these services, a company that isn’t using crowd and gig work is missing out.”
From a workers perspective, what are the pros and cons of Turking?
“The pros include that if I absolutely must go somewhere, I don’t have to ask my boss for permission. I also can work in my spare time, although only if there is work posted to be done. I also always know there is work available, so if times are tough I won’t be completely without work, although the downside is that I won’t be able to be picky and it might be very difficult to make enough to deal with the issue.
The cons are that it’s difficult to sign up; in fact, anyone outside of the United States who signs up today has their account automatically denied two days later. It is also hard to make minimum wage, with the average wage Turkers report sitting at around $2 per hour. If you do the work full time, you lose your flexibility, as you must be at the computer when work is posted or you might not be able to make enough for the day. In addition, the content we’re exposed to is often questionable, such as in content moderation HITs. (In fact, Microsoft’s internal content moderation crowd is currently suing them for psychological harm!) On top of that, mTurk itself is designed in the favour of the companies who post work, so workers cannot appeal rejections nor when a client blocks them from doing work. The companies who post work, known as Requesters, also have the ability to keep work without paying just by rejecting it. This all makes working on mTurk often underpaid and extremely precarious.”
You have been vocal about the need for oversight into work like that you do as a Turker. Do you think that the public and government are aware of the issues that this type of work can present?
“I think the public knows less as not only is the work rarely publicized, and only a small percent of people in Canada actually work on the platform (a survey I ran last month to count Canadians there collected around 300 responses). Those who do work there are often reticent to discuss it with others, both to avoid having new people sign up as competition (an issue more for Americans than Canadians since we can’t sign up anymore), but also to avoid having to explain what it is and why they do it.
I believe some departments of the government are aware of crowd work, especially since Policy Horizons Canada published a recent report on the rise of the gig economy and its positive and negative impact on the workers. My fear is that they are in denial about how quickly it can cause problems for the Canadian economy. Crowd workers who make very little will not offer much in the way of income tax, which is used to provide the social services they are thus most likely to avail themselves of. In addition, the fees paid for the work is not going to a Canadian company, instead it returns to Amazon in Seattle and therefore the corporate taxes on that income are going to the American government. This drain of funds for the services we need will become more evident as gig and crowd work, and automation, continues to decimate entire careers. For example, journalism is feeling the squeeze now as artificial intelligence is beginning to be used to write factual articles about sports scores and current events (often well enough that the layperson can’t tell the difference). Pathologists are beginning to find themselves out of a job as studies have demonstrated that crowd workers are as good or better at detecting cancer and other medical problems in scans of pathology slides. What happens when graphic design, engineering, architecture, computer programing, medical and legal professions begin to be moved to crowd platforms intended for expert and amateur workers? When doctors are forced to compete to diagnose patients, a race for the bottom occurs in pay, and suddenly even those professions we would expect to be protected become underpaid and overworked. In the end, this drain of revenue for the government as the middle class fights for work online will be catastrophic.”
For employers thinking about using gig work platforms, what kind of things should they consider before doing so?
“First, they should read the Guidelines for Academic Requesters ( http://wiki.wearedynamo.org/index.php/Guidelines_for_Academic_Requesters ). While these were initially intended for researchers running studies on mTurk, they contain a great deal of advice about how to put your work on the platform easily, and receive high quality results in a short amount of time and for a fair cost. Next, I would recommend at least browsing TurkerNation, especially the Requester FAQ, as many top workers are there providing free advice to Requesters who want to get it right on the first try. We’re happy to answer any questions a new Requester might have, so they can also sign up and we’ll help them get their work up on the platform. We can ensure a good experience to anyone who might be posting just a single project for completion or even someone who wants to automate humans into the loop of their business processes. Spending time talking to workers up front can save a great deal of time trying to clean up a mess later!”
My sincere thanks to Kristy for engaging me in a discussion about this topic on Twitter, and graciously agreeing to answer my questions. I highly recommend her website as a resource to learn more about crowd workers’ experience, and I’ve added her recommendations for additional reading to my list below.
- Kässi, O. & Lehdonvirta, V. (2016) Online Labour Index: Measuring the Online Gig Economy for Policy and Research. Paper presented at Internet, Politics & Policy 2016, 22-23 September, Oxford, UK. http://ilabour.oii.ox.ac.uk/online-labour-index/
- Cascio, W. F., & Boudreau, J. W. The search for global competence: From international HR to talent – Journal of World Business (2015), http://dx.doi.org/10.1016/j.jwb.2015.10.002
- Policy Horizons Canada: Canada and the Changing Nature of Work
- Switch Collective: HR Professionals: What does the Rise of the Gig Economy Mean for You
- Personnel Today: Why HR should embrace the gig economy
- CIPD: Two-Fifths of Companies Expect to Employ More Gig Economy Workers I the Next Five Years
Image credit: Thom via Unsplash.com