Earlier in September, Andela -- a popular startup in the African talent-sharing marketplace -- reportedly changed from its most recent model of hiring senior software developers.
If you recall, the startup began as a training institute for junior software engineers in 2014, a model which has since proven unsustainable, before it morphed to what it is now.
According to this report, it stopped operating a salaried model and ineluctably changed to a contract-based employment model. Consequently, developers will be paid per job -- a gig economy-esque model.
Before now, the company has expected its pool of engineers to either decide to be a full-time or contract staff. But at this point, every employee will only be paid based on the job they do instead of the monthly salary.
While there is not enough information to show how well this is working for the startup, we cannot ignore how tech companies like this are constantly pushing the gig economy narrative in Africa. What easily comes to mind are the ride-hailing platforms that have increased in many African major markets.
Technology has been instrumental in reshaping the concept of work, especially in creating a means for more flexible working conditions. With the introduction of tools supporting virtual interaction, there is certainly a shift in the traditional meaning of what it means to work informally.
Understanding the gig economy
According to the International Labour Organisation (ILO), gig jobs are classified under temporary employment with pre-determined termination dates. And they could be fixed-term, task-based contracts, seasonal, or casual jobs.
Globally, regulations came into play in the last three decades as the population of the workforce doing gig jobs increased.
As a result, there is now a level of legal protection for those doing such jobs that didn’t exist 30 years ago.
That these jobs existed before the disruption caused by technology suggests it is possible to create safer conditions for workers today. But not all economies can guarantee this.
A PwC report considers a ‘gig’ as a critical part of a system that will characterise the future of work. Asides this, because of the disruption caused by the pandemic, companies will only need people whose skills are crucial to their operations.
However, this does not suggest that a company will be able to permanently employ everyone it considers crucial even if they are willing to stay. Besides, the paucity of talent is still a challenge.
Beyond the talent challenge, economies with several regulatory inadequacies have more to be worried about while building a gig economy.
What is at stake?
It is important to consider an emerging economy with a somewhat prospering gig economy.
India’s gig economy is a major contributor to its GDP. It is the fifth-largest country for flexi-staffing -- after the US, China, Brazil, and Japan -- because the rise in the number of startups in the country has led to an increase in contractual jobs on digital platforms. Ride-hailing companies in the country, for instance, are said to have an estimated workforce of four million.
Unfortunately, the pandemic exposed some of the sector’s loopholes which will continue to mitigate against the growth of the gig economy if necessary frameworks are not put in place.
The concept of job security is based on a steady income, a sense of permanence, and retirement benefits. The hardest hit when a company faces major challenges -- acquisition, bankruptcy, or financial scandals -- are part-time workers; their full-time counterparts, on the other hand, have better job security.
Understandably, all sectors of the economy were affected by the pandemic with job loss a common theme. But it appears casual, seasonal, or task-based contract employees were mostly affected because, barring those offering exceptional value, they were not the priority when companies drew up their adaptation plans.
For instance, the number of drivers/riders in the ride-hailing workforce who lost their jobs during different phases of lockdown was alarming. Worse still, those who went ahead to provide services as the lockdown was eased did so at their peril as no safety or health provisions were made.
Typically, part-time workers have lower levels of protection when it comes to termination of their employment. This is having in mind that not all temporary jobs have clearly defined termination date.
Usually, no reasons are given by the employer to justify the end of the employment relationship other than the end date of the contract being reached and the employer’s unwillingness to renew.
Also, because of the ease with which workers in the gig economy can be replaced, most companies do not bother giving them benefits once they are let go.
Conversely, even though a part-time worker could be required to fit into a company’s culture during the period of service, the company may not be committed to such in the same proportion.
There are very few countries with defined regulatory provisions protecting the interests of temporary workers. As a result, these casual jobs are taken up without any contractual agreements.
And the absence of regulations makes it easy for employers to treat employees unfairly, without the latter having litigation options to redress the wrongs done to them.
One such occurrence -- recently discussed in a previous article -- would have been forestalled if there was a written contract in place.
Another example is the recent neglect of drivers by ride-hailing companies that left infected drivers to care for themselves even though their infections resulted from the companies’ oversight.
In a lawsuit, the companies said that the drivers could not be treated as employees because they were only gig workers.
Weighing the pros and cons of the gig economy
Despite its attendant challenges, a pronounced gig economy plays a crucial role in people’s entry into the labour market; it also helps the young population gain relevant work experience.
Whether you are an African freelance writer remotely running a publication for a Swedish company, an Uber driver, a software engineer, or a web designer building a website for a corporate agency, you’re a part of the gig economy.
Additionally, taking up gigs is an opportunity for an individual to upskill without being held back by a ‘stable job’.
In essence, the gig economy provides a kind of testing ground which helps young people try out different roles, compare work ethics across sectors, develop other skills, as well as build a network of professionals.
Meanwhile, an employer can objectively judge whether an employee is a best fit for the company after a series of short-term services before deciding to offer permanent employment.
This type of flexible work environment can only benefit the economy. However, if proper attention is not given to how involved parties run the system, people will always get the short end of the stick.
For example, the Indian government plans to use this period to establish a secured framework which will specifically favour the gig economy.
Ultimately, if African countries will benefit from the gig economy, they need to adopt or invent an inclusive regulatory model for every form of employment. Eventually, it would be less complicated belonging to either side of the labour spectrum. Perhaps, it will also serve as a panacea to the unemployment challenges faced in the continent.