Managing people in the gig economy

The gig economy, where workers are independent contractors with flexible arrangements, offers great benefits to both sides. It gives startups, as well as established businesses the opportunity to tap into a pool of talent as and when required, outsource certain tasks and stay lean. On the other hand, it gives independent workers the freedom to work when and where they choose, maximising their time and income.

Over the last three years, the number of workers taking part in the gig economy in the UK has doubled, showing the increasing popularity of the flexible arrangements. Recent advantages in machine learning and artificial intelligence mean that algorithms can now quickly adjust and manage even complex sophisticated tasks, such as managing the entire workforce. And whilst businesses like Uber, Deliveroo or Airbnb have built their success on these algorithms, being managed by an algorithm brings a different set of challenges companies and individuals are facing.

Algorithmic management

To maintain productivity when it comes to a flexible workforce, gig economy companies are increasingly using algorithmic management which allows them to efficiently manage workers globally. However, being managed by an algorithm instead of people can be frustrating to workers, and in extreme cases their resentment can lead them to behave subversively and potentially cause harm to their employers.

A recent study of Uber drivers in New York and London which looked at data collected formally and informally has found three areas of repeated complaints about working for algorithms – constant surveillance, minimal transparency and dehumanization. The study has also found that drivers find performance evaluations in the form of customer ratings particularly frustrating – understandably, as scrutiny of work can reduce productivity, no matter whether the attention comes from a person or an app and can be very limiting to workers.

Whilst Uber knows a lot about their drivers, the drivers know very little about the app and the logic behind the complex algorithm. Some drivers believe the system can be manipulative, which has proven true in the past when Uber has admitted drawing on insights from behavioural science to nudge drivers to work longer hours.

Due to the nature of the job, drivers are also feeling isolated and lonely – they don’t have a team to socialise with or a manager to speak to. This often leads to workers sharing their frustrations in public communities and forums, which can be very damaging for the business as they are not involved in those online conversations.

Human nature

A company’s success is built on their people and no matter how perfect the algorithms are, human nature will still play a key role. Regular communication is what keeps people informed and motivated, and it should not only be about sharing information, but also asking for feedback and getting the workers involved in improving the algorithm-driven systems and processes. It’s human nature to socialise with others and having supportive communities where workers can create social connections can break the isolation that comes with the job.

Workers need to feel that they can trust the company they work for and feel proud to be part of the team. Adding a human element to how people are managed in the gig economy can make a significant difference and help workers feel valued and less like they are treated as machines. At Acumen we pride ourselves in offering development that gives managers practical tools to help solve real life challenges. In most cases we design the interventions specifically for each customer, but we also offer a wide range of off the shelf programmes for those who prefer this approach. For more information, please contact simon@askacumen.com.