The new super-giggers are changing the face of the gig economy

The gig economy is going upmarket. It’s no longer just the Uber and Deliveroo drivers who are working without contracts or benefits, but huge swathes of Europe’s most specialised professionals are turning solo.

These new giggers are supra-skilled experts in data analysis, digital technology, compliance and regulatory work as well as all sorts of specialised consultants from finance to accountancy. They tend to be entrepreneurial by nature, in their late 30s and 40s, are highly educated and don’t like being confined to one single corporate. They are following their younger bretheren, the millennial generation, and want to do their own thing. Sound familiar ?

In the first study of its kind into professional gig work, Source Global Research, estimates that ‘independent’ management consultants now provide a fifth of all consultancy work bought by the top organisations in the UK. That’s worth about £2 billion of the £9.75 billion consultancy total.

This is big bucks. Source, which was hired by Odgers Connect the consulting arm of executive search firm, Odgers Berndtson, to carry out the research, estimates that the entire professional services market in the UK was worth £215 billion in 2016. This suggests that the UK’s professional gig economy – or what you and I would call project-based work – is already worth over £40 billion a year and represents about a third of all freelance income. While this is just an approximate number since there is no firm date, the estimates gives a good taste of the size and value of the independent professional sector.

Source based its research on interviews with senior executives working for 250 of the UK and Europe’s top organisations to find out just how popular the demand is for hiring outside professionals.

Even they were surprised at the results. Adam Gates, head of Odgers Connect, says there is a growing army of independent or freelance professionals, and the numbers are shooting up within both private and public sector organisations. Gates sees this as a growing trend, one being accelerated by the uncertainties created by Brexit, but also because companies in the longer-term are looking to reduce costs and headcount. Whether Brexit, or indeed austerity, are just a smokescreen to cut back on headcount and fixed costs is a moot point. What is sure is that Gates reckons the “genie isn’t going back in the bottle. This change is being driven by the changing needs of employers.”

Whereas a few years ago change was being driven by individuals who wanted to work solo, now its big corporates themselves who see the benefits – and not only because of cost savings. Just as most households don’t have a plumber lodging in their house to be on standby to fix a leaking shower or bursting pipes, so big and small corporates realise they do not need to employ people of every skill set on their premises.

They also see that people can be trusted to work away from the traditional office space, and its a new pattern that suits both sides of the contract. Indeed, the company directors interviewed by Source for the survey said that independent contractors actually deliver higher quality work than consultants at traditional firms. Just as most households don’t have a plumber lodging in their house to be on standby to fix a leaking shower or bursting pipes, so big and small corporates realise they do not need to employ people of every skill set on their premises.

If this trend does continue, relations between employer, employee and government will change profoundly. As well as securing watertight agreements with their new contractors and employers, the new giggers will have to find better ways to organise their own pensions and other benefits. The way government treats the self-employed – whether its as sole-traders or limited companies – will also have to be reformed.

So will tax, specifically National Insurance which is hard to justify any longer as definitions of earnings change between income and employment income. Infact, NI should be abolished and merged into one simple income tax band.

Policy-makers have been slow on the uptake to respond to these changes. But they will be forced to adjust as there are now 4.5 million people, around a sixth of the total UK workforce, working for themselves. Of these, Connect estimates around 3 million people are what you would term professionals, either self-employed or employed in micro businesses.

And in some ways, these new changes to the workplace are more scary than the threat of automation through AI and other new technologies. Professor Peter Fleming of the Cass Business School reckons that automation is a lesser threat than the gig economy. “ The real threat comes from unfair employment policies pursued by governments and firms, the politics and power, if you like. That has been the major driver behind the rise of insecure work.”

Whether you are an Uber driver or a two-brain data analytics geek working for McKinsey, striking out on your own is scary. And that middle-class thing about not daring to name your price and ask for money? Well, that’s going to have to stop.