By: Arnold February, Regional Investment Manager at Business Partners Limited
The advantages that the gig economy holds for local businesses and young professionals
The number of people rendering professional services on a temporary basis, has increased significantly in South Africa. Statistics SA estimates that between 2017 and 2018, temporary employment rose from 2.6 million to 3.9 million.
This so-called “gig economy” is increasingly attracting professionals, from copywriters to financial consultants, and according to Arnold February, Regional Investment Manager at Business Partners Limited (BUSINESS/PARTNERS), it is clear that the South African market is steadily embracing this new way of doing business. “Employing professionals on temporary contracts, or to work on specific projects has, in many cases, proven to be a cost-effective way for businesses to find the skills that they need without the need to grow those capabilities internally.”
In light of Youth Month, considering that South Africa’s youth unemployment rate currently sits at a worrying 55.2%, February believes that the gig economy is especially advantageous for young people who need to earn a living and build up their work experience. “Young professionals can easily be integrated into projects without companies having to commit to permanent contracts or training. Individuals are then able to gain exposure to many different projects and operations, which can rapidly build their experience levels.”
February explains that the development of better digital technology, more widespread internet access and increasingly faster connectivity speeds, are all factors contributing to the growth of the gig economy. “Today, many of the people providing part-time services can do so online, from wherever they are. This allows them to take on more clients and save significantly on travel time and costs.
“We’re also seeing the opportunities available for part-time service providers rising significantly. Companies are increasingly downsizing their internal operations to save on costs, and creating dynamic virtual teams managed by a small number of internal staff. This is especially the case in the IT and media industries,” he adds.
For businesses, the growing gig economy also holds many new opportunities. “Businesses are increasingly coming under pressure to become more cost-efficient and competitive. The gig economy allows for greater flexibility and minimises the cost and legislative requirements associated with having a large internal staff complement.”
However, February warns that making use of professionals on a gig basis, is not without its hiccups, and businesses need to be aware of these. “To start, contracts are vitally important when engaging with any professional on part-time or freelance work. The contract needs to be very specific about the time period or block of work for which the professional is employed, as well as the remuneration conditions.
“It is also incredibly important for the business to make sure that they have the rights to the intellectual property that the professional produces for them, or else they run the risk of competitors benefiting from the projects that they paid for,” he adds.
Lastly, February says that business owners need to consider that freelance professionals face a lot of uncertainty in their chosen careers. “Naturally, people who freelance for larger companies are not always sure where their next job will come from, and they are always on the lookout for the next project in order to maintain a consistent income.
“This can also be a problem for the business owner, since there is no guarantee that one’s preferred part-time service provider will be available for upcoming projects. As such, it is advantageous for companies to build relationships with the part-time or freelance workers that they employ, and to alert them far enough in advance of upcoming projects.”
With young, skilled professionals making up the majority of today’s part-time workforce, February believes that a growing gig economy will continue to benefit both the country’s youth and private sector. “Considering the specific set of challenges that South Africa is facing, greater opportunities and more participants in the gig economy is a win-win,” he concludes.