The redefinition of employers and employees

Publication date: 11 January 2019
Article type: Blogs and Articles

The rise of the sharing economy is changing the workplace and how people work. HR Manager Biljana Kocevska Adam discusses this impact this has on employers and employees

Game-changing companies such as Uber, Airbnb, Kickstarter and eBay have paved the way for significant change in not only the way we work, but also how we relate to our workplaces. 

These innovative organisations built their brands on the new models they spearheaded: replacing traditional retail and service models with free-agent users who they empower to provide goods and services on their own terms, while incurring extremely low transaction costs to the business. 

Employers and the workplaces that house them have naturally taken note and are following suit. It is not uncommon for a company, especially a start-up, to refer to itself as ‘the Uber of X’. This phrase acts as shorthand for customer and company convenience, indicating a tech-savvy, solutions-based alternative to traditional business models that benefit all involved. We have witnessed a seismic shift in the workplace and its ‘uberisation’ of employment contracts – workers are now allowed to operate flexibly and earn income outside of contractual hours, instead of taking on gigs on a case-by-case basis – just like an Uber driver. 

‘It is not uncommon for a company, especially a start-up, to refer to itself as ‘the Uber of X’’

Such a dramatic change has impacted the traditional employer-employee relationship. Zero-hours contracts are evermore prevalent, with their supporters praising the ability of staff to earn as much or as little as they choose and set a working pattern that accommodates varying commitments. Companies themselves – once seen as steadfast, immovable structures – have blurred the lines between ‘employee’ and ‘self-employed’.

While this increased freedom has benefits, the regulatory and legislative environments in which many of us work have been substantially slower to adapt. Many jurisdictions are still dramatically behind the curve when it comes to ensuring the working and living conditions of the work force, despite benefitting from this fluctuating employment model. 

Working like Uber – good or bad deal?

Taking Uber as a specific example, the dangers of blurring the lines between employee and contractor have been widely publicised. Around the world, the company has faced legal and political hurdles due to varied regulations surrounding the status of Uber drivers – and more generally public transportation – alongside the jurisdiction’s tax, working hours, maternity packages, overtime benefits and other securities afforded to employees preferring a more traditional employment model.

A series of cases in the US cumulated in the issuance of formal guidelines by the US Department of Labour in 2015; namely that if a worker finds themselves economically dependent on a single company, they should be afforded the same rights and privileges as a traditional employee. 

Across the pond, in 2016, the Central London Employment Tribunal ruled that Uber drivers’ contracts and working conditions are similar enough to traditional employees, that they should be entitled to minimum wage, paid holiday and other normal entitlements. In fact, it was only recently the state of New York voted to introduce a minimum pay for drivers. The list goes on;  as a result of a lengthy dispute with London’s Hackney carriages, currently Uber cars are only able to trade in 2018 if the company can prove its compliance with strict employment regulations. 

‘Companies themselves – once seen as steadfast, immovable structures – have blurred the lines between ‘employee’ and ‘self-employed’’

While the quality of life afforded by Uber to its drivers has been held up to much scrutiny, many other sectors have not had the foresight to ensure their staff are protected. As uberisation becomes a widespread practice, it is likely that other companies who are seen to be bending the rules of traditional employment law and regulation will face the same media and political attention. Before falling foul, we must strive to ensure that workers do not have the experiences of Uber’s early drivers by putting pressure on our elected officials to broaden employee definitions and expand workers’ rights legislation now. 

The role companies should be playing

To paraphrase the famous Indian activist Mahatma Gandhi, companies and their HR departments must ‘be the change they want to see’ in addition to putting pressure on regulators. Companies should relish the opportunity to access highly skilled professionals without the long-term commitment of regular employment. The insurance business, including the company for which I work, Nest Investments, has benefitted significantly from such a set up. 

When our chairman Ghazi Abu Nahl set up Nest Investments as a refugee in 1989, he wanted to build a business that allowed its staff to be ambitious and enterprising, while understanding that freedom and flexibility was vital for achieving this. 

Today, Nest Investments, alongside many of our competitors across the insurance sector, engages external agents in addition to full-time staff: it’s the industry’s modus operandi. These individuals sell our insurance products for commission, but do so without the commitment of a full-time employment contract, a holy duality of security and freedom. 

This leaves staff with ample time and resources to pursue additional enterprises, education and professional development – we pride ourselves on the entrepreneurs, students, writers and even artists who help to make up our ranks. Nest Investments treats everybody the same. The organisation invests in all of its freelance agents by granting them the same company benefits as full-time staff and access to the same training as traditional employees. Doing this means Nest Investments and other insurers can benefit from top- quality talent. 

It must be recognised that, with such freedom comes cultural challenges, as Uber itself has demonstrated. In 2017, Uber’s culture was criticised as ‘competitive and rife with rivalry’ owing, in part, to the semi-permanent nature of its staff. When an HR department does not do an effective job of integrating its uberised workforce, freedom can feel a lot like vulnerability and insecurity, which leaves company cultures susceptible to problems. If uberisation is here to stay, companies and their HR teams will have to balance the monetary benefits of a temporary workforce with a positive company culture.  

When it comes to the longevity of Uber’s business model, uberisation is likely to remain popular as long as it continues to make business sense. As more companies experience fluctuating business demands, for example, retail highs in December or the pressures of the financial year end, additional and quickly-deployed staff can make or break a business. 

‘The regulatory and legislative environments in which many of us work have been substantially slower to adapt’

Thankfully most HR teams now have access to technology that can provide not only real-time information on employee costs, acquisition costs and revenue per employee, but also staff satisfaction levels and employee retention statistics. We are now granted a host of information through which to make our decisions and can gain previously unimaginable foresight to help plan our business strategy. HR has a key role to play by flagging the metrics and supplying leadership with information needed to safeguard both employee wellbeing and their bottom line.

So, you want to work like an Uber driver?

 If you’ve weighed up the pros and cons and decided to plant your flag in the land of uberisation, allow me to offer the following advice:

  • View the role as an opportunity to foster more diverse experiences and sample a career. HR managers understand how competitive the job market is, and we also understand that young professionals may still wish to ‘shop around’ for the perfect job or industry. It would be possible for you to work an uberised job while looking for the next one in a totally different field. Many people go through their whole careers without this level of flexibility, so enjoy it while you can.
  • As you explore options and try jobs, you are going to meet lots of people. You’ll likely find your colleagues have had interesting careers: often experienced practitioners will look for more freedom towards the end of their careers through uberisation. These people are an excellent source of industry knowledge. Hear their stories, learn from their experiences and ask them questions.
  • Make use of a variety of working spaces. Your uberised job might take you to the office, but it also might take you only as far as your kitchen table. The beauty of flexible working is just that – you can pick up your laptop and work from anywhere you choose. Do you like working at home? Great, there are often excellent tax benefits for those that do. However, if you prefer a more social space there are a variety of coworking spaces that you can use to get the job done and meet like-minded entrepreneurs and freelancers. 
  • Use this opportunity as a chance to rethink career progression. The Uber model favours horizontal and lateral career movement, presenting the chance to defy the traditional hierarchical corporate career plan. What’s more is that lateral moves can increase the number of options available to you: uberisation turns the corporate ladder into a corporate climbing frame.

Be mindful of relying on the Uber model for a long-term career. As with anything in 2018, change is rapid and unpredictable. While this model is popular now, nobody can guarantee decades-long employment. Whether is right or wrong, a full-time, employed status job is still viewed as the best training in most professional industries. You can always freelance later, but it becomes hard to go full time if you’ve only ever been your own boss. 

‘With such freedom comes cultural challenges’

Biljana Kocevska Adam is HR Manager at Nest Investments, an investment management organisation.