The idea of the ‘gig economy’ is rapidly becoming a popular alternative to keeping employees on the payroll, whilst offering flexibility and less autonomy for workers. According to a 2019 report by the TUC and academics at the University of Hertfordshire, Britain’s gig economy accounted for 4.7 million workers.
While it is clear this new way of working is growing in broad terms, it is still too early for some sectors to know how this increasingly prevalent approach to hiring is working out.
For now, the real estate sector remains relatively unchanged by any shift towards a gig economy, yet the dramatic nature of this recent work culture means it’s only a matter of time before the gig economy concept begins to impact the way the industry operates.
In a bid to unravel the question of whether the new era of temporary work could ever be fully integrated into our industry, we have taken a look at some of the pros and cons of real estate adopting a gig economy model.
What is the gig economy?
The gig economy is a form of employment that sees independent or self-employed workers join companies on a temporary basis. Some gig workers will work as freelancers, simply fulfilling jobs on demand. Others work to short-term temporary contracts which typically run for the duration of a project or busy period.
The question remains as to whether employees will drive this change based on individual preferences, and the level of flexibility that can be gained and controlled, as opposed to relying on companies to change their flexible working policies.
Can a gig economy model work in Real Estate?
In the real estate industry, and if adopted, you would most likely see this model in areas such as Construction, Estate Agency, Consultancy, and any project-based work in Development Management, Planning and Architecture, etc.
Hypothetically, gig economy workers would be favoured at different stages for a project or during peak seasons, providing an extra helping hand or tailored expertise to companies with a number of employed staff.
Advantages of the gig economy model
Despite the initial reservations, there are some benefits to a gig economy in real estate. Let’s take estate agency and a construction role as an example:
Flexibility of temporary workers
One of the main benefits of the gig economy is that it provides real estate agents with the flexibility to hire the right skills for the right roles. This approach to hiring is useful if an employee is absent or during a busy peak season when companies require additional help. Rather than taking on a long-term staff member, real estate agents and other firms in the industry can benefit from hiring extra talent with little commitment, but with an option to simply extend the temporary contract if circumstances change.
In addition, the flexibility of hiring using the gig economy model gives companies the ability to bring onboard different specialists for specific roles rather than attempting to find a multi-talented individual able to juggle an array of tasks.
The financial benefits of hiring through the gig economy are arguably some of the most attractive. Without the commitment of a salary or long-term employment contract, real estate agents can hire skilled and experienced industry professionals who might be out of reach financially if they were to be hired using a permanent contract.
Another advantage is that freelance and temporary contracts rarely include the provision of training or added qualifications, which is a common but costly feature in most long-term contracts. Self-employed real estate agents often invest in their own training, allowing temporary employers to take advantage of their skills and expertise without the extra costs.
Bolstering major projects
When approaching a busy season or negotiating a major project, it is important to feel as though you have the best talent by your side.
What the gig economy can do is transform the way real estate companies approach projects. Skill gaps can be filled on an ad-hoc basis by searching through the growing pool of highly skilled experts who make their services available for shorter periods of time. This new era of hiring has been particularly beneficial in real estate’s construction sector, where the gig economy model has enabled investors and developers alike to hire specialists as and when they are required.
Disadvantages of the gig economy model
There are a number of disadvantages levelled at the gig economy concept that may see real estate as one of the last sectors to adopt the model.
While the gig economy may be a blessing for many organisations seeking easier hiring and flexible employment options, it has also made it easier for professionals to work independently. In real estate, Estate Agency is one profession where this can be problematic.
With this rise in flexible hiring comes an increase in self-employment, leading talented professionals with enough experience to go it alone once they are able to source work as and when they need it. Without the tie to an agency, self-employed estate agents are often in a position to offer competitive pricing and flexible services that suit those seeking a more flexible approach to real estate investment.
Moving away from traditionalism
If the gig economy is embraced by the industry, the real estate sector will gradually shift away from its more traditional approach. Bolstered by digitalisation, it could become easier than ever to secure the services of a real estate professional without entering an office or even picking up the phone. The new era of remote working could be the catalyst for the start of an emerging gig economy.
While there are many who champion the opportunity for change, others argue that the impersonal nature of the gig economy is too far removed from the industry’s enduring emphasis on face-to-face interactions.
Losing word of mouth
Much of the real estate sector, particularly when it comes to construction and real estate development, is run on word of mouth. While this hasn’t always been ideal for entrants to the industry, it has resulted in a culture of loyalty and trust within the industry. With a rise of a gig economy, this can result in a disconnected team of unvetted workers.
The start of a new era?
It is clear from other industries that the gig economy may not just be a short-term trend. While there are both pros and cons to this emerging working culture within real estate, it provides the work/life balance that is increasingly popular among younger workers.
In one form or another, the real estate sector may have to find a way to embrace this changing approach to how candidates want to work, or at least to adapt it in a way that suits and compliments the traditional model.