How SMEs Can Benefit From the Gig Economy

Freelancing isn’t anything new and, for SMEs and growing startups, tapping into an available workforce of part-timers has always been a popular way to outsource work before a company gets big enough to sustain a larger, full-time staff.

However, the digitally-enabled, dramatic shift in working patterns known as the gig economy offers something beyond a stop-gap. And, for companies like Cause4, embracing ‘sharism’ and the gig economy is a permanent solution that can support innovation and deliver quality to clients.

As of May 2024, there were around 4.28 million self-employed workers in the United Kingdom, and the UK gig economy is now estimated to employ 1.7 million workers. Despite the media’s fixation on companies like Deliveroo and Uber, they make up just one-fifth of the total. By contrast, a quarter of a million people undertake desk-based services such as web development or translation and legal services, through apps and websites. These people make up over half of the UK gig economy. Meanwhile, nearly 100,000 people undertake cleaning, decorating, plumbing, electrical work, dog walking or other manual tasks.

Most of this trade in manpower isn’t happening via apps like Uber and Taskrabbit - instead, people are making use of LinkedIn, Facebook groups, sector-specific blogs, personal recommendations, referrals and agencies to find the flexible positions they need.

The attraction of flexibility

A small business can afford to be flexible. With a team of people that you know personally, you can offer remote-working and irregular hours in ways that large conglomerates simply can’t.

Big businesses with international workforces need to run on more traditional structures, and fill up desks with individuals who are comfortable with a clear career ladder to climb. That still appeals to some professionals – but a growing number want more.

Many of us are, or will be, parents and carers needing a work/life balance that is more than just a vague promise to not be contacted while on holiday. The majority of jobs are still full-time, yet in a survey, seven out of ten working mums in London said they’d prefer more flexible hours, but didn’t dare ask their bosses.

The strain of a daily commute can affect people’s wellbeing, and the pressures of managing home life responsibilities during the ‘off-hours’ can prove impossible.

This isn’t good for the individuals, but it’s also not helping the productivity of the team.

An SME that is comfortable to judge a gigging freelancer by their output rather than their hours will prove an enticing company to work for. And the flexibility works both ways - during quiet times, when the work available doesn’t justify the expense of additional staff, the company can shrink back down to what’s needed to break even.

Treating gig workers as partners

For SMEs whose growth depends on flexibility, gig workers, contractors, and temporary workers are vital.

It’s in the best interest of the company to treat them as indispensable and part of the extended ‘family’. That can mean ensuring your gig workers are kept up to date with your group communications, learning and development programs, and social activities. You want to build a great relationship with a gig worker.

Being open and honest as well as supportive is key, and a good reference or referral when possible is always welcomed.

The gig-friendly office

In 2018, Cause4 moved into a Mindspace shared office in the heart of the City of London. For us, it was more than an office move - it was the realisation of how we want to operate, how our team feels most productive, and where we get our inspiration.

The traditional startup, initiated across a kitchen table, grew up to get a place of its own - an office with the company name on the door, and an address in an impressive neighbourhood that looked good on the branded letterhead. We’re not the first business to recognise that the bricks and mortar office has become outdated.

We decided to rent space in a shared environment. This gives us access to great facilities which are someone else’s responsibility to maintain, as well as a buzzy atmosphere with close neighbours in a variety of other small or mid-sized businesses. We can expand if we need to or benefit from large meeting rooms or attractive social spaces without having to commit to a high-priced monthly rent. That’s a ‘gigging’ office.

Gathering inspiration from the gig

At Cause4, we like to draw in innovative ideas from other industries that can be reworked for our purposes. To do that, we need to be connected to the wider world. Working with people who also engage with other businesses helps revitalise our ideas. It can open our eyes to the inventiveness of other industries and can also warn us of cautionary tales. A gig worker who spends a few days with our company brings with them a wealth of current knowledge learned on other jobs.

Gig economy workers run their own businesses

Getting gigs is like job-hunting on a smaller scale, and the best gigging professionals do their research, find leads, sign up with agencies, email former employers, send CVs to HR departments and pitch themselves and their skills. We can help them by recognising that they need to be profitable and have a level of security. Figuring out the best way of working together is vital, whether that’s through a contract with certain hours or a project with pre-agreed deliverables.

Technology has revolutionised freelance employment opportunities, enabling people to explore and experiment with different working models both as individuals and as businesses. As an SME or startup, we can benefit from this fluid workforce, keeping costs at a manageable level while engaging with some of our most imaginative, well-connected individuals.

About the Author

Michelle Wright is founder and CEO of Cause4, an organisation providing services to support the growth of charities and social enterprises. Cause4 works across the charity, arts, sports and educational sectors in three main areas: strategy and fundraising, philanthropy and enterprise development.

Your common questions answered

What does gig economy stand for?

The term "gig economy" refers to a labour market where people work as freelancers or part-time workers instead of having permanent, full-time jobs.

This means people take on short-term jobs or "gigs," often through apps or online platforms. The gig economy meaning highlights how workers are hired for specific tasks or projects rather than having a steady job with a single employer.

What is the gig economy in the UK?

In the UK, the gig economy is a growing sector where many people work as freelancers or part-time workers.

Examples include driving for companies like Uber and delivering food with Deliveroo.

The growth of the gig economy in the UK shows how more people are choosing flexible work options. The benefits for gig workers often include the freedom to set their own schedules and choose their projects.

What is gig economy and its advantages and disadvantages?

The gig economy involves temporary, flexible jobs where people are paid per task or project.

Advantages of the gig economy include:

Flexibility to work when and where you want.
Opportunities to work on a variety of projects.
Potential to earn extra income alongside other work.

Disadvantages include:

Lack of job security and benefits like health insurance.
Irregular income, which can be hard to budget.
Limited rights compared to full-time employees.

What is an example of a gig economy?

An example of the gig economy is driving for Uber.

Drivers are paid per ride they complete and can choose when they want to work. Other examples of gig economy jobs include freelance writing, graphic design, and food delivery services.

Is the gig economy a good thing?

The gig economy has both pros and cons.

Pros of the gig economy work include the flexibility and the ability to work on various projects. It can be ideal for people who need adaptable work schedules.

However, it also has drawbacks, like less job security and fewer benefits.

Whether it’s a good thing depends on your personal needs and how well you can manage the instability.

Do I have to pay tax on gigs?

Yes, you do have to pay tax on gigs.

In the UK, if you earn money from gig work, you must report it to HMRC and pay taxes on your earnings. This is similar to how you would pay taxes for any other type of income.

Which country has the biggest gig economy?

The United States is often recognised as having one of the largest gig economies in the world.

The country has many gig economy companies and a high number of people working in flexible, freelance jobs. The growth of the gig economy in the US is driven by a large number of platforms like Uber, Airbnb, and Fiverr.

Do gig economy workers have rights?

Yes, gig economy workers do have rights, though they may differ from those of traditional employees.

For example, they might have fewer protections and benefits. However, many countries are working on improving gig economy support and ensuring fair treatment for these workers.

Where did the term gig come from?

The term gig originally comes from the world of music, referring to a live performance by a musician. Over time, it has evolved to describe any short-term job or assignment, reflecting the temporary and flexible nature of such work.

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