The gig economy wave is gaining traction in Kenya. Young people are increasingly embracing gig work, households and SMEs are also adopting the culture of finding services on online gig platforms.
Although the gig economy in Kenya is not a new phenomenon, there is a shift to online work owing to internet and mobile penetration as well as burgeoning youth population.
Kenya is experiencing a ‘youth bulge’ with approximately 20 percent of the population made up of young people between the ages of 15 and 24. This ratio of youth is above the world’s average and Africa’s average of 15.8 percent and 19.2 percent, respectively and with a large youth population and internet and mobile penetration, the online gig economy in Kenya has huge potential to grow, ease youth unemployment and create decent work opportunities for them.
According to a new research by Mercy Corps Youth Impact Lab, the Kenyan online gig economy is valued at $109 million and employs a total of 36,573 gig workers. It is predicted to grow at an annual rate of 33 percent in the next five years with the total size of the gig economy reaching $345 million and employing 93,875 gig workers.
Online gig work is especially popular among tech-savvy millennials who desire the flexibility and freedom of a gig job with the benefit of earning a premium for their skills and services. Gig workers have specialized expertise for particular projects and are easily accessible. With little capital, young people can now work in the online gig work like ride hailing platform- Uber online rentals like Airbnb, online professional work platforms like Upwork and blue-collar matchmaking platform, Lynk. Such workers also offer innovative approaches, the latest technology, and creative, cutting-edge solutions that otherwise are not available.
However, even in this evolution, it appears that corporates have reservations on using gig workers. But gig work comes with the economic advantages that would be worth to explore.
In a research that we conducted, we found that firms using gig workers can help reduce the time it takes to complete a project, and of course cheaper cost. This flexibility allows organisations to also add new capabilities, supplementing the core team when they lack particular expertise and capacity, and thereby easily scale up or down on a project by project basis.
But perhaps it is reasonable why corporates are averse to gig workers. Most companies want to cultivate an organisational culture and a sense of belonging with full-time employees rather than with gig workers with whom they have limited interaction.
Pivoting to a gig economy workforce model can pose challenges for some organisations relating to their human resource practices and traditional recruitment models. It’s also understandable that some corporates could be wary of their data privacy and security being infiltrated when they use gig workers. They want to know who is processing their data and from where.
This could however be resolved by having the human resources work with legal and IT departments to make sure the gig workers have clear performance goals, secure communication systems and the right amount of training and support to make them productive decisions and aligned with the company’s strategy.
Organizations will also need to understand the HR implications of engaging with gig workers. This can be achieved by engaging with regulators, legislators, and gig platform owners. Organizations should also monitor regulatory developments and shifts in public opinion and perception. As the number of gig workers continue to rise and are recognized by the government of Kenya, it is likely that the regulation of the gig work domain will evolve. Engaging with such stakeholders will be important to overcome the reluctance amongst organisations to hire gig workers.
While it may locally require huge HR system shifts to engage gig workers, businesses worldwide are recognizing that the rise of gig workers will have a significant impact on their workforces. For example, Dutch multinational company Philips is among companies that have successfully used the gig worker model.
Through their platform Philips Talent Pool, the company keeps a pool of freelance staff who they have vetted their quality of work and who are familiar with the company. By doing this, the firm is able to cast a broader net for resources, mostly for skills that are scarce.
Kenyan organisations can leverage the gig economy considering a large number of employees, especially millennials who are looking for the next opportunity. Many organisations have been facing a high turnover rates from the same millennials and spend more time, energy and resources looking for suitable replacements. Millennials are the future of the work force, and it is time for corporates to also adapt into their behaviour.
Perhaps, it's time for corporates to re-think and re-structure their approaches to talent acquisition and management to move with the times and capture the millennials, who are strongly gravitating toward gig work. The advantages of having gig workers far outweigh the disadvantages.
The writer is Mercy Corps' Youth Impact Labs Partnerships Manager.