VERCIDA: The Gig Economy and Diversity & Inclusion

The Gig Economy and Diversity & Inclusion

VERCIDA hosted a roundtable in September 2017 to explore the relationship between the gig economy, and diversity and inclusion. It was chaired by Mark Lomas, Head of Equality, Diversity and Inclusion at HS2, and part one of the discussion and key recommendations are summarised below.

Some facts about the Gig Economy

There are around 1.3 million people working in the gig economy in the UK, and 5 million contractors.

Contractors tend be higher paid and highly-skilled, whereas gig workers are often low paid and low skilled/no-skilled.

The average wage of these workers is £2.50 per hour, which is less than minimum wage (£7.50/hour for people aged 25 and over).

How does the gig economy effect different organisations at present?

Some companies use contractors for a lot of roles like project control and project management, which results in higher costs due to day rates and uncertainty for contractors and companies about contract extensions.

However, some of the uncertainty can be managed by planning months ahead.

This also means companies have to tailor separate communications for contractors and permanent staff members to avoid any confusion around key messages.

There is also a disagreement in some companies about where the responsibility lies for managing and recruiting contractors: some procurement departments and recruitment departments both consider it the responsibility of each other, rather than themselves.

How does disability factor into the gig economy?

In terms of disability, one attendee quoted a figure of 30 million disabled people in the UK, over half of which are unemployed. More clearly needs to be done to address this to get more disabled people into work.

As the gig economy grows employers need to make sure they’ve thought about the needs of disabled contractors, the same way they’ve though about permanent staff who are disabled.

This includes making sure things like disabled toilets are in order, or offering flexible home-working options for those who will benefit from it.

Also, more needs to be done to educate employers about Access to Work funding in order to remove the fear some employers have of employing disabled people, who they may see as a burden.

It was also noted that Access to Work funding is not available for disabled people doing voluntary work, which was sadly ironic, as they often use voluntary work as a stepping stone into employment.

The effects of changes to IR35: the exodus

Due to changes in IR35 tax rules last year public sector employers have seen large numbers of highly-skilled and sought-after contractors leave contracts and move to the private sector.

Even though many were offered permanent positions with great benefits, most chose to move over to the private sector where they can earn more money.

Tensions between staff and contractors

Some attendees spoke anecdotally about situations where a contractor on a huge day rate has worked alongside a permanent staff member earning a salary with a daily rate much lower, even though they were doing exactly the same job.

This has caused strong interpersonal issues and has seen some staff members telling employers they insist on being paid at the same rate contractors are paid for new contracts advertised.

It can also lead to some employees feeling that their loyalty to a company isn’t properly valued.

It was established that some companies don’t offer the same levels of inclusion for contractors as they do for employees, which can in turn lead to some contractors feeling undervalued and isolated.

One attendee said their employer offers all contractors and staff support through the company’s internal access to work scheme, but contractors don’t receive all the benefits that employees do.

How the gig economy affects the diversity of workforces

It was noted that in some sectors there can be a vast difference in the diversity of contractors recruited through procurement and employees recruited through recruitment, which has a big impact on the overall diversity of a company’s workforce.

It also means that some companies may have potentially discriminated against some contract applicants, due to some of the requirements they have placed in contract tenders such as length of experience.

Due to this some firms have changed their processes so that procurement of contractors follows the selection process for the recruitment of employees much more closely than before.

However, some attendees noted that they felt there are higher levels of diversity in the contractors they select than the employees they recruit.

This is because more attention is paid to ensuring employees are from a background with a better cultural fit to the organisation,

This is much less important for contractors, who are needed on a short-term, project related basis, meaning they were more likely to come from diverse backgrounds, so long as they are suited for the role.

Gig opportunities can be long-term and global

Companies are often flexible about the length of time contractors work for them on a contract basis and it was noted that contractors who are good at their jobs are often highly-valued and retained on a long-term basis.

One attendee mentioned that one contractor has worked for their employer for 15 years.

Also, roles can be based in multiple locations across the world, which means that when procuring contractors it becomes a global search for the best contractor.

This brings a variety of time consuming challenges around how to effectively procure these contractors, what currency to pay them in, what rates to pay, etc.

It has also led a change in procurement, moving away from person search to advertising the contracts on online marketplace websites where contractors can bid for roles.

Transgender people tend to be more comfortable as employees, not contractors

One attendee noted that it was likely that most transgender people are probably more interested in permanent employment instead of gig economy contractor roles.

This is because transgender people are highly likely to be looking for stable working relationships that make it easier for them to be themselves and be accepted for who they are.

The stability helps them to deal with the stress and anxiety they are likely to face because of their identity and revealing their identity to others, along with the instability they may face in their personal lives.

However, transgender people who have fully transitioned and are comfortable and confident with their identity are more likely to be comfortable working as a contractor, for example, there are openly transgender people contracting in industries like IT.

If companies make it clear they are diverse and inclusive employers they are more likely to attract more talent and diverse applicants for contractor roles.

And if employers advertise themselves as transgender inclusive organisations, with an LGBT employee network for example, they will get more transgender people applying for jobs.

One attendee noted that although their employer’s policy is to make it clear they are a LGBT friendly employer on all job or contract adverts, they are also listed on VERCIDA to demonstrate their inclusive values.

Employers should make their D & I credentials clear

The same attendee also revealed that their employer was attempting to increase its number of employees from minorities such as disabled people, and that they were unsure to mention that they are keen for disabled people to apply for certain roles.

One attendee who is disabled responded by saying they felt that an employer should specifically say if they are keen for disabled people to apply.

Knowing this from the start can help disabled people overcome anxiety if they know that an employer will be understanding and help to make reasonable adjustments to accommodate their needs.

It was noted that VERCIDA sees 30% more applications from diverse candidates for job roles where an employer’s diversity and inclusion credentials have been listed.

The role of gender in the gig economy

It was noted that attendees are seeing more woman working in gig economy roles than men, which is positive for overall gender diversity in the gig economy.

One attendee noted that after she had children it was challenging to find a new senior role that offered her the flexibility she needed to balance work and family commitments.

She said it was because of this she turned to working as a self-employed contractor, which offers her a senior role with the flexibility she needs and project work she enjoys.

Also, she said it can be challenging to win some contracts due to having smaller professional networks than men because of the time out they have spent having and raising children.

It was also noted that there is most likely a large gap between day rates for males and female contractors, with women suffering from lower levels of pay.

Zero hours contracts can be good for disabled people

There was a general perception that zero hour contracts are negative for employees.

However, zero hour contracts can be very good for disabled people, as they offer them flexibility to suit their circumstances and they can be particularly good for people with invisible disabilities. 

Companies must demonstrate their commitment to D & I and ethics to attract Millennials

People born after the year 2000 have differing views of gender and ethics and diversity than those from older generations.

For example, they have more fluid views of gender and identity and are more likely to gender agnostic.

Also, research shows that 80% of so called ‘Millennials’ would rather take a pay cut and work for diverse and ethical organisations.

This means that companies have to work hard to demonstrate their diversity and inclusion credentials in order to attract Millennials.