The gig economy is growing in its prominence, but don’t lose sight of the advantages of hiring and engaging for the long term.

Businesses today require greater flexibility to respond quickly to market changes. The gig economy – or the ability to deliver specialised projects or tasks using short-term ‘contractors’ – may seem an attractive strategy to support that flexibility. This is partly because the long-term skills shortage means the right people are getting harder to find. As a result, it’s tempting to think these hard-to-fill roles can be broken into pieces and ‘gigged out’ (my term). This has its place, but my caution to businesses is to remember the advantages of staff who have strong relationships at work.

I once interviewed a particularly successful area manager from a franchise group – a major, well-known, international company. The area manager had discovered that a stronger performing outlet had a lot of best friends in it who socialised together. The outlet had lower absenteeism and the team better covered others when someone was absent. It also performed higher than surrounding peer businesses in customer satisfaction surveys. From this insight, the area manager began to encourage team socialisation at other outlets – and ultimately created one of the best performing areas in the country.

Any company can break their work into ‘projects’ or tasks and have people undertake various parts as and when necessary. It does sound attractive. However, it creates a disconnected ‘workforce’. Personal relationships at work, which are largely only possible through consistent employment at one place, are a great tool for engagement and retention. Gallup has been reporting on this for almost 20 years with their research discovering that those with strong friendships at work demonstrate greater loyalty and greater job satisfaction, including people feeling they get more recognition for their contribution to the business. From our work with numerous businesses, we also know that engagement and retention have a direct correlation with an organisation’s capacity to deliver on its business strategy and objectives. These benefits will not occur if you have a range of people coming in and out of the business to undertake projects.

The gig economy from a candidate perspective offers the opportunity to be part of the Uber-isation of the workforce by using digital platforms such as Freelancer, Taskrabbit and Upwork. Via sites like these, businesses or even individuals can list what they want done and people bid for the work. Anything from marketing projects to changing a light bulb can appear on these sites. It helps expand the workforce and creates diversity. People can now undertake projects or tasks when time, space or other constraints mean they may not be able to work in a traditional manner. For candidates, the gig economy has its place.

For businesses, by all means, if you have a short-term project or task to deliver, the gig economy can provide a viable option. However, this is best balanced with a greater use of permanent employment to build stronger work relationships that underpin staff engagement and retention.

Happy recruiting!