Deliveroo riders are hoping to be classed as workers, giving them access to holiday and sick pay. © Getty Images
Deliveroo riders are hoping to be classed as workers, giving them access to holiday and sick pay. © Getty Images

Managing ‘gig’ economy risks

posted by Katie Jacobs
in Law
9 June 2017

With companies making more and more use of non-permanent staff, procurement must collaborate to mitigate the risk

Do you know your RPO from your MSP? You’re going to have to soon enough, as the recruitment process outsourcing market (that’s RPO, which encompasses ‘Managed Service Programmes’, or MSP) is growing at three times the rate of traditional staffing.

Thanks to this spike in demand, procurement will find itself working more closely with HR to ensure organisations are getting the most value from recruitment services, says Matthew Dickason, global managing director of Hays Talent Solutions, a provider of such services and a new CIPS knowledge partner. While HR traditionally owns RPO (usually bringing in permanent employees) and procurement looks after MSP (typically contractors), lines are blurring as staffing models evolve. “We’re seeing more of an interest in bringing it all together into a ‘total workforce management’ approach,” Dickason explains.

The growth in demand for flexible staffing models is due to both supply and demand. On the supply side, many potential employees want to work more flexibly, especially millennials and those working in technology, Dickason says. From the employer perspective, flexible labour pools allow organisations to bring in talent as and when they need it, and bring tax savings. Self-employment is booming in the UK, growing from 3.8m people in 2008 to 4.6m in 2015.

However, the growth in use of contractors, temps and freelancers brings with it risk and complexity. The number of employment suits on the legalities of the ‘gig economy’ is growing. Recent high profile examples include a case brought by Uber drivers, in which the court ruled the drivers must be classed as ‘workers’ and, therefore, merit more employment rights, rather than self-employed contractors. Uber is appealing the decision.

Food delivery app Deliveroo has also come under fire, with a group of riders taking it to court over the workers versus self-employed contractors definition. The riders hope the tribunal, which has yet to make a decision as we write this, will rule they need to be classed as workers, giving them access to basic employment rights. The Independent Workers’ Union Of Great Britain, which is bringing the case, says Deliveroo “bogusly” labels its riders as independent contractors.

Such cases, and a government review due over the summer, mean compliance is front of mind. “The negative press has put this on people’s radars and they are aware they need to look at this area,” Dickason says. “People are looking to reduce time [spent on recruitment] and reduce costs, in a compliant way. It’s about making sure you are educated around mitigating the risks of using non-permanent staff.” That means HR, procurement and operations collaborating to ensure recruitment outsourcing brings all the value but none of the risk.

To explore the resources Hays Talent Solutions offers CIPS members as part of the knowledge partnership, please visit: bit.ly/labourrecruitment

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