The gig economy: retuning reward

How reward is being disrupted
The gig economy retuning reward

We’re hearing more and more about the gig economy. This weeks publication of the Taylor Review has added to the debate. And it's not only employment law that will need to respond, the way we reward will too.

Changing mind-sets

Depending upon your viewpoint, it offers flexibility or it’s a form of exploitation. It’s synonymous with an erosion of employment rights for lower paid workers. Indeed, there have been a number of court cases (such as Plimlico Plumbers and Uber) with more in the pipeline this year (Deliveroo).

But it’s not just about unskilled work; the gig economy is coming to a knowledge worker near you.

I see the law suits as the sharp end of a more fundamental change – our relationship with work.

Economic volatility, technology, connectivity and globalisation have changed the employment proposition, from a career to a ‘tour of duty’.

Both the employer and employee want increased agility in the way they work.

A fresh outlook on work life balance and a multi-generational workforce have changed the psychological contract. The single career model is becoming increasingly rare as portfolio careers or project based employment become the norm. Employees are more frequently mixing up the traditional life stages of education – work - family – leisure.

With more frequent job changes, generations moving in and out of employment, the 24/7 culture and success being redefined, we think reward will need to be re-tuned.


Gone will be the paternalistic programmes like pensions that reward employee loyalty or seniority.  Benefits such as sick pay and holiday will be eroded as work is delivered by contract not employment.

Reward will need to reflect the relative short-term nature of the employment or engagement:

  • Base pay will be subject to much greater individual negotiation by contract or engagement. It will be related to the market rate for the skills that the person brings. Internal equity will be less important.
  • Bonus will be linked to engagement or project outcomes and paid upon delivery of milestones or contract end rather than linked to the employer’s financial year.
  • Cash will be king. Enabling workers to source and self-manage pension, healthcare etc. rather than accumulating multiple ‘pots’.
  • Benefits offerings may become pooled by sector or industry to facilitate buying power.
  • Skills development will become a more overt part of the package. Offering training courses, ‘pots’ to spend or exposure to specific development as workers seek to upskill for this and their next engagement. To make themselves more marketable.
  • Culture and employer brand will be increasingly important as companies seek to attract and re-attract the talent they need.

On their part, workers will need to build their personal brand and will be looking to contract with companies that can help them do that.

Of course, companies are likely to still need core employees but this will be a much smaller group. For them, the more traditional reward approach linked to long term wealth creation may still be appropriate.

But for the increasing group of workers engaged on a project basis, reward needs to change to provide the agility and value that they and companies need.


At Verditer we partner with clients to make reward and performance management more effective.  Contact us to find out more about our approach to reward strategy.

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Image courtesy of Dale Harvey ‘British Sea Power’