The gig economy and the older worker

A new study says 20% of gig workers are over 55, with doing something I enjoy being the main motivating factor. Employers need to understand their gig workforce better, says the report.

older man working in the gig economy

 

Is your image of gig workers all young people doing Uber or Deliveroo? Think again.

A new report from the US says 20% of gig workers are over 55. Among independent contractors, the 55+ group is even higher at 30%. The report says this group does not appear to be working out of financial necessity alone. “Doing what I enjoy” is the main factor and far more important to the older age group than to younger workers. This is followed by flexibility, with income and benefits at the bottom.

Almost 40% of gig workers over 55 consider themselves retired –  with 30% of gig workers saying their income is intended to supplement their retirement savings. Only a third say they can find traditional employment which is as good as their contracting position.

The Illuminating the shadow workforce: insights into the gig workforce in businesses report by the ADP research institute says definitions of gig working make it difficult to track this nontraditional workforce, with many different terms springing up in recent years, ranging from

the sharing economy to the platform economy.  It calculates that one in six workers in the US is now not a traditional employee, but admits it is hard to track what it calls this ‘invisible workforce’, particularly as they may be paid through multiple channels, including agencies.

Many gig workers are not part of the company’s workforce strategy.

The report splits them into “two worlds” of gig working. Independent contractors who tend to be older, highly educated and more likely to have a higher income. Companies often use these on a project basis because of their specialised skills for periods when regular staff cannot manage the workload without training or at short notice or for commission-based work. The other group is typically short-term seasonal or on call workers who tend to be younger, less educated and have a lower income.

The report comes as another US study from MetLife talks about how the definition of retirement is changing, as bridge jobs, gig work and encore careers replace the traditional notion of a fixed end to one’s working life. It says many employers believe the commonly used definition of retirement should be expanded, which could include changes in the work model for older workers.

Changing world of work

The ADP report is based on the payroll data of more than 75,000 large companies, employing more than 18 million workers, supplemented with a survey of over 16,000 workers and interviews with 21 company executives.

The report says that, although gig working has been around for a while, its growth is “changing the conversation within traditional organisations and shining a new light on human resource practices”. Moreover, the broad acceptance of gig work is changing how all kinds of workers look at the world of work. In fact it finds that there are fewer differences between gig workers and traditional workers than some may thing, with regard to length of being with one employer, for instance.

It states:  “Every indication is that gig work will only continue to grow, and with an already tight talent market, businesses will need to fully understand the dynamics of the contingent workforce – to optimise talent management, workforce strategy and the company’s bottom line.”

What is clear is that the majority of independent contractors are doing so out of choice, not because they can’t find a regular job. Sixty per cent said they would continue to gig for the next three years, with flexibility a key motivator, often above financial security or benefits. The report says flexibility “may be a worthwhile trade off particularly for those who are able to enjoy some traditional benefits from another source, such as a spouse”.

The report says the gig workforce presents opportunities for new levels of flexibility and scalability for an organisation, but also poses unique challenges with regard to engagement and legislation. The important thing is for employers to track and understand that workforce.

It states: “In a tight labour market, gig workers can be a precious source of talent if companies understand what drives gig workers’ decision-making.”

What is needed, it says, is HR strategies that address gig workers in businesses, given, as it says,  “gig work is the new normal”.



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