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Workers and organizations exist as temporary life companions through numerous cycles of defined duration. Before the pandemic, companies avoided having to provide benefits and full-time salaries for ad hoc work. Gigs requiring less-specialized labor, such as working as a delivery driver, typically attracted minimally trained workers who needed flexibility or supplemental income. And gigs requiring specialized knowledge, such as design work, typically attracted “professional” freelancers who charged a premium rate and often enjoyed lower tax rates for their efforts relative to their full-time employee (FTE) counterparts.
While this arrangement has benefited many generations of workers, the pandemic is affecting those at both ends of the gig economy — skilled freelancers and less-specialized laborers — more severely than FTEs, because large numbers of staff redundancies increased the gig worker pool. Early in the pandemic, a flood of these newly unemployed people shifted to high- and low-skill gig work; this glut led to a drop in individuals’ hourly pay due to supply severely outstripping demand — for everyone from marketers to Uber drivers.
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As a result, an unprecedented increase in competition has forced many existing and new gig workers — many of whom are young and shut out of the job market — to scramble for their next paycheck. Amid increasingly desperate competition for delivery gigs, for example, some Amazon Flex workers hung their phones on trees close to cell towers for a split-second advantage over rivals to snag jobs first. Instacart workers have protested and even called on customers to delete the app as their hourly pay has declined.
Creating Episodic Loyalty
The extraordinary lengths that some people are willing to — and need to — resort to in order to find work opens up the debate on episodic loyalty.
Episodic loyalty occurs when people view organizations as temporary life companions. These relationships shift through defined periods as organizations and their collaborators — either FTEs or freelancers — engage, disengage, and subsequently reengage with each other throughout a person’s career. For employees who stay within an organization, this loyalty shift occurs as internal episodic loyalty as they take on new tasks, projects, and roles. Gig workers, who are extraneous to an organization, develop external episodic loyalty, often due to the relationships they build with coworkers as they undertake multiple jobs for the organization, and because work processes become more familiar to them over time.
Our current economic climate has led to far fewer full-time positions than there are workers, which is forcing people into the gig economy, willingly or not. This makes it much more difficult for the relationships and familiarity between external collaborators and organizations to grow, which hinders external episodic loyalty from developing between workers and the companies they work for, as well as between workers and colleagues.
Evidence suggests that workers increasingly value trust, engagement, and communication, whereas organizations favor rapid adaptation to technology to drive job performance. However, suppose an organization demonstrates loyalty to a gig worker by providing them with an attractive benefit typically given only to FTEs — such as paid vacation time — but the gig worker doesn’t demonstrate reciprocal loyalty by continuing their relationship with the company. In that case, the company finds itself in the situation of having invested time and money training the gig worker only to have them to move on to another gig, as is the nature of the gig economy.
Balancing the Benefits
Following a U.K. Supreme Court ruling that Uber’s employees were workers rather than self-employed, the European Commission launched a consultation earlier this year on whether gig workers should be given the same employment rights as those of workers in more secure forms of employment, including the ability to bargain for better wages and working conditions as part of a collective. But until such issues are settled, several principles can be applied to create a balance between organizations and gig workers in order to achieve episodic loyalty and thereby greater parity between the benefits the organization and the gig worker provide and receive.
First, we have to consider how much loyalty both organizations and gig-working collaborators are willing to invest in the partnership. This will dictate the level of episodic loyalty and the depth of collaboration. However, both sides are at risk of losing out by committing too much time and too many resources to the other for an unequal return. Both sides should be open about their investment expectations going into a partnership; for example, an organization should clarify whether it is a one-time job or a longer-term opportunity, and collaborators likewise should be honest about their availability.
Second, what will make the collaborator stay loyal? Is it the organization itself, or the gig worker’s purpose and role within the organization? Or are both parties making a wider societal contribution that acts as an incentive for loyalty? Certainly, it seems that organizations need to provide an incentive for gig workers to feel that their loyalty is warranted. But are workers made to feel part of the team regardless of their freelance status? Easy ways to do this include introducing them to the rest of the group, showing them around the office, and setting them up on the organization’s communication and file-sharing platforms.
Likewise, what are the gig workers offering that stimulates a sense of loyalty from the company? Is it a unique skill that full-time staff members can’t provide? Has the company previously hired the gig worker and developed an organization/collaborator relationship? Whatever the anchor point for an organization’s affiliation with a gig worker, it needs to be communicated and reflected in its actions. The organization may also recognize the collaborator’s potential and see room for them to grow. It should act upon this with clarity, again fostering a sense of reciprocal loyalty.
At the same time, organizations need to balance gaining episodic loyalty with their long-term goals and activities. They must weigh how much they’re willing to invest in achieving this loyalty and retaining the specialist knowledge of gig workers who repeatedly return against what they need to invest to reach their long-term goals. In many cases, both concerns will go hand in hand, given that knowledge retention is paramount for organizations to reach their overarching goals.
Ultimately, in order to make gig working fair for all, both workers and organizations must understand and accept the cyclical nature of episodic loyalty, engaging with each other as temporary life companions. Doing so will establish a functioning mechanism for constructively engaging in, disengaging from, and reengaging with employees and collaborators.
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Why Gig Work Needs to Demonstrate Loyalty, and How to Do It - MIT Sloan
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