Article: 'The growing gig economy is great news for businesses'

Employee Relations

'The growing gig economy is great news for businesses'

Muhammad Vickneswaran, the Director of Human Resources, Kuala Lumpur Convention Centre, in an interaction with People Matters, shares intriguing insights on the rising gig workforce and the future of talent management.
'The growing gig economy is great news for businesses'

Muhammad Vickneswaran is a senior Human Resources professional with over 27 years’ experience in HR, specifically in the hospitality industry, and was appointed Director of Human Resources of the Kuala Lumpur Convention Centre (the Centre) in August 2017.

Prior to joining the Centre, he was General Manager - Human Resources for East Malaysia & Brunei, Dairy Farm Malaysia. Holding a Bachelor of Business Studies degree with a major in Human Resource Management from the University of Tasmania, Muhammad has also received numerous HR accolades including the ‘101 Top Global HR Minds (Hotel Industry)’ at the World HRD Congress 2019 and ‘Malaysia’s Most Talented HR Leaders Award 2018’ at the 13th Employer Branding Award 2018.

Here are the excerpts of the interview.

What's the big deal about the gig economy which is being debated more than ever?

As the current workforce’s obsession with flexibility and freedom intensifies, the gig economy will continue to grow and disrupt businesses. The gig economy’s digital platforms consistently deliver choice, control and options for people who choose to build portfolio careers. Those who are not reliant on gig work, use it for supplemental income while those who are charmed by its flexibility and pay are seeing it as the best overall option.

The rise of the gig economy is closely linked to technological change, and the future of work and the number of people in gig employment will not only be affected by how technology continues to evolve, but also by how people and society react to those very changes. The rise of the gig economy has also encouraged employers to improve diversity in their workforce strategies. Some large companies have even replaced their permanent employees with professional contractors for some teams - so that they can tap into a more specialist talent pool, while remaining agile and competitive.

However, due to the gig economy’s nature, gig workers aren’t recognized as employees. This means they’re cut off from the benefits that go hand-in-hand with full-time employment like medical insurance and paid sick days, just to name a few. Additionally, these workers can face financial uncertainty because irregular income can make it difficult to stick to regular savings, let alone save for retirement.

As such, with the rise of the gig economy and changing conventional notions of employment, ensuring legal and social security for gig workers will be crucial in dealing with the constantly changing labor market moving forward.

How do you see the future of work in the context of the rising gig economy?

According to the Institute of Labour Market Information and Analysis (ILMIA), the gig economy in Malaysia is expected to grow by 55 percent every year and it is predicted that the industry might soon generate nearly 50 percent of the country’s economy. There are presently 2.2 million gig workers registered with the Malaysian Digital Economy Corporation (MDEC), but the number could be higher, so the importance of gig workers to organizations and countries cannot be underestimated moving forward. The growing gig economy is great news for businesses and workers who are ready to take advantage of all that it has to offer. But in order to get the most out of these changes, we need to make sure that organizations don’t get too focused on cutting costs that they lose sight of everything else; treat your freelancers well to support the economy (and the people working for you) instead of squashing it, and we’ll all be able to grow together.

How can businesses leverage the potential of the millennial gig workers who comprise the majority of the alternative workforce today? 

With growing skills shortages and the low birth rate in many countries, leveraging and managing alternative workforces will become essential to business growth in the years ahead.

As the alternative workforce continues to move into the mainstream, organizations need to take a strategic approach to tapping into this important source of talent. Businesses need to use innovative approaches to move beyond “managing” contractors and freelancers to “optimizing” and “leveraging” them, creating new connections among HR, the business, procurement and IT, among others, to do so effectively. Remembering our principles for human capital reinvention, businesses must also consider issues of inclusion, diversity, fairness, and trust when constructing organizational systems around alternative work. It’s important that the entire workforce, both alternative and traditional, be treated with respect with regard to culture, inclusion, and work assignments – and that perceptions on all sides reflect these values.

What drives the gig economy and what are the top motivating factors behind the rising gig force?

In addition to greater flexibility demanded by gig workers, one of the biggest motivating factors driving the fast-growing gig economy forward is the rise of automation and machine learning in the workplace, which is encouraging even the already employed to consider freelancing. 

Other motivating factors include falling incomes and increasing cost of living; higher unemployment rates; and decline of pension programmes, which are influencing job seekers’ decisions to seek opportunities in the freelance market.

What sorts of big interventions do we need to ensure that businesses treat the gig force the right way?

There are three key areas that businesses worldwide need to look at to create a better future workplace for all:

Firstly, Corporate Responsibility to Respect Human Rights, organizations must live up to their responsibility to respect human rights, and labour rights in particular, in accordance with the United Nations (UN) Guiding Principles. At a minimum, this means that companies should correctly classify workers to ensure full enjoyment of labour rights and social protections, and refrain from challenging policies and legislation that afford such protections; put in place human rights policies and processes, remediation, and human rights due diligence processes; and provide for, or cooperate in, legitimate remediation processes, and abolish forced arbitration clauses in workers’ contracts.

Secondly, Legislative Reform, lawmakers around the world should ensure that their legislative proposals adopt a presumption in favour of employee status, and afford gig workers the same rights and protections as employees, including minimum wage, overtime, unemployment insurance, workers’ compensation, family and medical leave, and the right to collective bargaining. 

Last but not least, Business Incentives, governments should shift the current paradigm from one that incentivises business to classify workers as "independent contractors" or "non-employees", by creating incentives for businesses to classify workers as "employees", thereby strengthening the bargaining power that team members hold in the workplace.

The gig economy is the way of the future and will continue to flourish in the next decade as the future of the workforce will consist of more millennials and generation z

How do you see the new California gig legislation which is opposed by many including the likes of Uber?

I think it is a good and necessary step to afford gig workers the same rights and protections as employees. That said, if freelancers are reclassified as employees, they could also have to trade in their freedom for structure, potentially losing their ability to set their own hours, work on terms they prefer and accept opportunities that feel right for them.

Do you think the inroads made by technology such as AI and ML will have a significant influence on pushing some jobs out of the traditional and into the gig domain?

Yes, it will as we are living through a fundamental transformation in the way we work. The rapid advances in technological innovation, automation, robotics, AI and ML are definitely replacing human tasks and jobs, which is dramatically changing the nature and number of jobs available, as well as the skills that organizations are looking for in their people.

Do you believe the gig economy is the way of the future? Where do you see the gig economy in the next 10 years?

If the gig economy keeps growing at its current rate, yes, I do believe the gig economy is the way of the future and will continue to flourish in the next decade as the future of the workforce will consist of more Millennials and Generation Z, who prefer freelancing over full-time employment because of the flexibility and independence it provides.

All this suggests a positive future for the gig economy as a whole and now it is about finding that balances the benefits for both employees and employers. 

 

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Topics: Employee Relations, #GigEconomy

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