Flexing some labour market muscle: Managing the growing significance of the gig economy

With a labour shortage and more flexible roles, businesses need to adapt to new ways of working

By Brendan McGinty National Recruitment Federation

THE GROWING SIGNIFICANCE of the gig economy is reflected in Ireland’s latest Labour Force Survey, as zero unemployment and skills shortages demand new flexibility on the part of recruiters, employers and employees.

The number of employees who are agency workers increased by 4.8% in the third quarter 2019, over the same period last year, according to the most recent labour market survey data published by the Central Statistics Office last November.

While agency staff represent a relatively small proportion of Ireland’s overall workforce, Ireland is seen to be following a global trend towards more flexible labour markets and labour supply, with growing numbers of contractors, consultants and freelancers in our new just-in-time, on-demand workforce.

Growth in the numbers of contingent workers allows industry and the public sector to adapt to market needs efficiently and cost-effectively, which crucially supports business competitiveness.

Agency workers are key too in maintaining vital public services here, particularly across the Irish healthcare system.

With the total number of employees put at 1.99 million in the latest labour force survey, agency workers in Ireland now account for 2.8% of that workforce, compared to 2.7% a year previously.

The CSO figures also show that for those taking up agency positions, the majority, 68%, now have a permanent job or work contract of unlimited duration, an increase of 9% in the year.

Full Employment

The reliance on temporary agency workers can be a useful pathway to full employment for people who face difficulty finding work in the regular labour market, which could be due due to lower skills or education level. It facilitates the successful transition from unemployment into employment.

A growing agency sector also contributes to the reduction of undeclared work and helps formalise work and conditions for the workers involved.

Ireland has record employment levels, with unemployment down to 4.8%, the lowest since January 2007. Just 119,000 workers were classified unemployed in December 2019, meaning Ireland is now essentially at full employment, with employers struggling to fill vacancies.

Labour demand allows more skilled workers in both vocational and professional roles to choose agency work or contracting, giving flexibility in terms of when and where they work, and at what price.

Nurses, security guards and hospitality staff are traditionally more likely to work as agency staff, but the likes of IT contractors, accountants, engineers and architects are among the sectors where the number of contingent workers is rapidly growing.

Current labour market conditions have created the year of the candidate, in recruitment terms, where counteroffers, higher salaries, perks and holidays, as well as a spotlight on employer brands typifies the market.  

So too, many professionals are now being contracted by choice, rather than hired, meaning flexibility for the worker in terms of when and where the role is completed.

Women at work

With a labour shortage and greater acceptance of flexible roles and new ways of working, the time has never been better for women returning to the labour market. 

Ireland’s female labour force participation, particularly women over the age of 35, has remained low. Even with some 80,000 more women at work than in 2014, we are still the fifth-lowest country for the proportion of women at work in the EU. 

More active labour market policies to encourage women back into the labour force would certainly relieve some of the current labour market pressures.

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But this requires Government action on a range of diverse issues including skills development, greater choice in flexible work options, affordable child care and better provision, and more workable social protection measures.

How we do our work is changing and evolving at a rapid pace and employers and HR professionals need to adapt recruitment policies and workplaces accordingly if they are to attract and retain the best candidates in the marketplace. 

Full-time, part-time, temporary and fixed-term employees, alongside agency workers, freelancers and consultants will make up an increasingly flexible and contingent workforce. 

This new model reflects the growing weight of services in the economy, rapid technological change, the emergence of new business models, and lifestyle demands for more flexible work conditions in an era of practical full employment.

While the nine-to-five job-for-life has very much been consigned to the past, this new flexibility will still demand careful control of labour equality and employee well-being, if the promised productivity and competitiveness advantages of a flexible labour market are to be realised.  

Brendan McGinty is a former IBEC director and is now Managing Partner with Stratis Consulting and a strategic policy advisor at the National Recruitment Federation

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