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Is the gig economy exploitative or empowering?

Negative stories about contingent workers abound — such as reports of Uber drivers who tell passengers they love the work, but are actually dissatisfied. At the same time, in “Lead the Work," Ravin Jesuthasan, David Creelman and I interviewed freelance workers that actually prefer the flexibility, variety and potential income upside of freelance work.

Statistics about the relative pay, working hours and job security of contingent workers compared to full-time workers tell a similarly paradoxical story. As with the anecdotal evidence referenced above, published research provides no black-or-white answers about contingent workers' happiness. The good news? Within the nuances of these stories and statistics are patterns that leaders can use to increase engagement with freelancers.

The Evidence: Mixed Results

Here are just a few examples of key studies about worker attitudes and motivation, comparing freelance or contingent workers to regular full-time workers.

meta analysis of 72 studies involving over 230,000 workers found that on average contingent workers experience slightly lower job satisfaction than permanent employees, but that it varies by the type of contingent work. Some contingent workers (e.g., agency workers) experience lower job satisfaction while other contingent workers (e.g., contractors) do not.

A survey of temporary workers in Europe found that prior experience as a temporary worker was not associated with job insecurity, job satisfaction or organizational commitment, but job insecurity increased closer to the end of temporary contracts.

2004 review found that in temporary manufacturing jobs, contingent workers actually had lower levels of role overload and role conflict than permanent employees. This suggests that supervisors may narrow the scope of the tasks assigned to contingent workers, which limits their jobs but positively affects their job attitudes.

A 2010 study across a large a national sample of Australian temporary workers found that compared to permanent workers, temporary agency workers are less satisfied with job security and hours worked, but equally satisfied with their pay.

Researchers compared permanent and contingent workers doing the same work in six U.S. locations of a telecommunications company, using the “Job Characteristics Theory," and found contingent workers perceived their work as more motivating due to higher “task identity” (a complete and visible work outcome) and knowledge of results, despite perceiving less job security. Contingent workers also had higher “growth need strength” (need for personal accomplishment, learning and development).

How to Increase Contingent Worker Engagement

Though the findings are mixed, patterns are emerging that suggest how leaders can increase engagement among contingent workers.

1) SourcingWorkers engaged through temporary-staff firms or direct-hire arrangements prefer permanent employment, while independent contractors prefer non-permanent arrangements.

2) Volition: Research suggests that those who voluntarily choose or prefer contingent work have more positive experiences than those who chose it for lack of alternatives.

3) Organizational SupportEmotional support from coworkers and supervisors is positively related to contingent worker commitment. This is true of commitment both to the temporary firm that placed the workers, and the organization where they deliver their work. Support from the client organization has been found to “spill over" into commitment to the temporary organization placing workers with that client.

4) Social vs. Economic Psychological ContractWorkers that perceive their “psychological contract" with an organization as social and emotional (versus merely transactional and economic) tend to be more willing to go the extra mile by working longer, helping others and supporting change. Evidence suggests that temporary workers perceive more transactional psychological contracts than permanent workers. Yet, when temporary workers have a lasting relationship with the organization with the possibility of renewing their temporary contract or converting from temporary to permanent, they develop a similar psychological contract to permanent workers.

5) ContinuityEven beyond the psychological contract, expectations of continuity positively associate with temporary worker attitudes and performance. One study found that agency temporary workers who have opportunities to transition to standard employment arrangements have more positive attitudes toward supervisors and coworkers and are better performers than their peers in permanent work arrangements.

Look Beyond Full-Time Employment

It's easy to get trapped in assuming that all regular full-time workers are more satisfied than others, and that regular full-time employment is the only way to satisfy, motivate and engage workers. But the evidence suggests that such simplistic assumptions don't reflect reality.

Leaders must embrace the complexity with which workers experience their work. Full-time, traditional employment can indeed satisfy and engage workers, but it is not the only option. When non-standard temporary and contingent work is carefully constructed to consider the right sourcing, to provide worker choice and organizational support, and when opportunities for renewal and continuity exist, the evidence suggests that non-standard work arrangements can be as equally motivating as — or even more engaging — than permanent employment.

Photo: Creative Commons