D
Catalyst | Dexterity
“All employers need to consider
carefully the impact of their
actions on corporate and
individual wellbeing”
While those free agents at the top of their game
are able to negotiate the potential downsides of
less traditional employment – including income
variability, the need to fund retirement plans or
health insurance themselves, or client non-payment
– for workers at the lower income end, these present
major challenges. A 2018 Report on the Economic
Well-Being of US Households suggested that 58% of
US workers relying on contingent work would have
difficulty handling the unexpected expense of $400,
evidence of a darker side of the so-called gig economy.
There are clear implications here for public
policy. A string of research, reports and early legal
challenges are acknowledging the potential for
companies to exploit those workers who have no
choice but to join the contingent workforce and are
being disadvantaged by gaps in income security and
worker protections and benefits.
In April 2019, for example, the European
Parliament approved the Directive on Transparent
and Predictable Working Conditions in the
European Union, binding Member States to
re-balance employer flexibility versus workers’ rights
and protections, however they are employed. Other
solutions being debated include everything from
better portability of benefits between employers to
the trialling of a universal basic income.
Much focuses around the employment status
or classification of these workers, who are neither
permanently employed nor truly self-employed. In
force from January 2020, the California Assembly
Bill 5, which explicitly limits the classification of
workers as independent contractors rather than
employees, was entirely driven by the problems
caused by employee misclassification.
“Tackling exploitation and the potential for
exploitation at work” was also a central element of
Matthew Taylor’s 2017 report on the future of work in
the UK, Good Work. This calls for a clearer distinction
between what Taylor calls “dependent contractors”
and those who are genuinely self-employed, the
better to provide the necessary protections and
benefits for workers who fall into this category.
But what should companies be doing while
public policy catches up? It’s interesting that the
2019 Deloitte Global Human Capital Trends survey
carries the title Leading with Social Enterprise. The
report is clear that this is not the same as yet another
round of corporate social responsibility or more
pronouncements around social impact.
Rather, it’s about balancing the need to
deliver profits and returns for shareholders with
“improving the lot of workers and customers,
and the communities in which we live”. As the
fourth industrial revolution creates high levels
of disruption across the economy, politics and
society, all employers need to consider carefully
the impact of their actions on corporate and
individual wellbeing.
However we frame the debate around the
contingent workforce, whether in terms of attracting
and engaging with contingent workers with critical
skills or an awareness of the exploitative potential of
the gig economy, there is much to be said for Deloitte’s
endorsement of five core human principles for social
enterprise: purpose and meaning; ethics and fairness;
growth and passion; collaboration and personal
relationships, transparency and openness.
Thirty years ago, Charles Handy anticipated
that we’d need to respond actively to radical
change all around us. The rise, and implications, of
the contingent workforce is a prime example of the
challenges we all face.
Issue 4 - 2020
39