Do workers actually prefer the gig economy?

NZ research looked at whether the gig economy actually delivered on its promise of choice and flexibility for workers

BY HRD 13 Nov 2018

Despite the hype around the choice and flexibility of the ‘gig economy’, University of Auckland research suggests most people prefer a regular nine-to-five-style job.

However, when workers start out in gig jobs, their chances of changing to a conventional role later are surprisingly low.

Professor Elizabeth George, from the Graduate School of Management in the Business School, and her collaborators looked at data from a French survey that followed the work lives of 10,000 young people who finished their education in 1998.

Professor George said the researchers sought to discover if the gig economy delivered on its promise of choice and flexibility for workers.

This included looking at whether individuals want ‘nonstandard’ gig-style jobs and if they can they easily switch between standard and nonstandard jobs. They were also curious to see if educational levels shaped preferences and outcomes.

‘Nonstandard’ jobs are any paid work situations that do not involve a full-time ‘permanent’ employment contract. This includes casual, contract, temporary, or part-time jobs.

Professor George said that people who started out in non-standard work arrangement had a “low likelihood” of changing to a standard job.

“People who started in standard employment were more likely to be in this kind of job at any given point months or years later,” she said.

Interestingly, the difference was more dramatic for people with high and low levels of education compared to medium levels.

For example, highly educated people who had a standard job at one point in time were nearly eight times more likely to also have a standard job at a later point than those who had had a nonstandard job.

Moreover, for people with low levels of education, those who had nonstandard employment at a given time were nearly three times more likely to have nonstandard work at a later time compared to those who had had a standard job.

“In other words, the stickiness of employment status was higher for high and low education levels,” said Professor George.

The potential reasons have to do with the investment businesses make in permanent staff, but not temporary or casual staff.

Professor George added that when you’re in a temporary job the organisation has “very little incentive” to invest in you.

“You probably don’t get the same training or opportunities for career development as you would in a permanent role, which means you come out of that job with fewer new skills,” said Professor George.

“You may well also miss out on mentoring and professional networking via workmates. Also, having lots of nonstandard jobs on your CV is still perceived by some employers as signalling a lack of commitment.”

The researchers also found that compared to those in nonstandard jobs, people in standard employment were more satisfied with their pay, reported a greater sense of professional accomplishment, and had greater optimism about the future. Moreover, they were less likely to be searching for a new job.

The research found that people with high and low levels of education in standard jobs were even more optimistic than those with medium levels. And people with low education levels in standard jobs were least likely to be job-hunting.

Professor George said that perhaps people with low education levels in permanent work are happier because their expectations of getting a regular job at all are lower.

“So it’s not that those with medium education levels are unhappy, but by comparison those with lower levels are even happier,” she said.

“For a long time there’s been this belief that people, especially young people, prefer the freedom – and lack of office politics – of nonstandard work. But our study shows that most young people – like older people – actually want regular jobs.

“Sure, a nine-to-five job in the office or factory can feel boring and stifling. But it can also give you security, financial stability, a sense of meaning and identity, a social network, and all those skill development advantages missing from many nonstandard jobs.”

She said the challenge for companies and policymakers is to ensure that the benefits of flexibility are shared between organisations and workers.

Indeed, prior research has shown that companies benefited from nonstandard work arrangements (for example, via lower wage bills, just-in-time workers) but not so much the workers themselves.

“As technology and international trade makes new forms of work possible it is important that policy makers think about how the promise of choice and flexibility become a reality for workers, and that nonstandard work does not become a route to nowhere.”