Thursday, May 23, 2024
 
 

Platform work: getting the right approach for consumers and workers

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With an agreement finally reached by the European institutions on the Platform Worker Rights Directive after two years of fractious discussions, attention turns to its implementation across the EU 27 Member States. The devil is in the detail more than ever since each country will effectively be allowed to choose their own method of classifying workers. It is vital that a pro-freelancer approach is taken that will benefit workers, consumers and the economy as a whole, rather than vested interests who lack an understanding of the labor market of today.

Getting the right scope

It is vital that national legislators establish a clear definition of a labor market platform and therefore avoid millions of freelancers by choice being misclassified as employees across Europe. There are huge numbers of independent workers who value flexibility and these range from computer programmers and providers of healthcare services to cleaners, musicians and models. This form of open talent often uses platforms to match them with projects. Platforms therefore facilitate the provision of services but should not be presumed as employers, and should therefore not be burdened by unintended legal and operational constraints. The same applies to independent professionals who want control over where, when and how they earn money.

No general presumption of employment

Governments should establish a Voluntary Employment Classification which should allow workers to choose to ‘opt-in’ for employee classification. In practical terms, a freelancer could clearly state that they do not want to be seen as an employee and do not want their status to be tested since they wish to be independent. This approach would respect individual autonomy, allow those who want to be employed to be employed, and is more suited to the varied nature of freelancing and flexible work. Similarly, an individual could ask for their employment status to be tested and a decision on whether they should be deemed an employee could be made on the basis of a checklist of criteria. In this way, if 3 out of 7 classification criteria are met, then an individual should be classified as an employee.

It is important that a nuanced approach is adopted which respects the diversity of freelance work as well as the realities of self-employment. It is vital that millions of entrepreneurs across Europe – as well as genuine freelancers and one-person companies – are not forced into employment relationships against their will. A forced shift from an autonomous business model to a rigid employment structure would be terrible for independent talent and severely diminish the flexibility and freedom that is fundamental to why many choose freelancing and platform work.

Don’t demonize algorithmic management

The use of algorithms and data-driven systems to oversee, monitor, and make decisions about various aspects of workforce management, such as scheduling, task allocation, performance evaluation, and employee engagement is a positive and should be encouraged. Algorithmic management saves time and effort while improving efficiencies. Granted it is important to prevent practices such as “robo-firing,” but not every single algorithmic decision needs to be supervised by a human. These fears are stoked be a lack of understanding of the systems in place and a broader wariness towards technology across Europe. The efficiency and benefits of freelancing, platform work and the digital economy as a whole often rely on automated processes.

A requirement of human oversight would introduce undue delays, more costs and increased
operational processes and unnecessary bureaucracy. It would also be unworkable from a practical perspective. As such, EU member states should adopt a clear risk-based system when it comes to implementation of the Platform Worker Rights Directive – as favored by the new European AI act – whereby human oversight is only required if there is a high risk to health and safety. Moreover, national legislation in this regard cannot go beyond the requirements of the EU General Data Protection Regulation (GDPR) but should rather be aligned with it.

Total talent management

Organizations across Europe need to get to grips with an evolving labor market and changing workforce. The traditional model of individuals on 9 to 5 contracts travelling into an office five days per week is no longer the sole option in town. Modern organizations increasingly blend a mixture of permanent employees, consultants, freelancers and other contingent workers. Studies show that 40 percentage of businesses are made up of non-permanent talent. This reality necessitates the need to create an all-encompassing, holistic approach to talent management and focus more on the value that a worker can provide an organization without focusing on their employment status.

Adaption will lead to organizational success. Companies who are able to attract, optimize and retain all employed and non-employed talent types will be able to create a competitive advantage in their market: particularly as the skills shortage in Europe increases. Getting the right approach to total talent management will improve the organization’s ability to respond to wider business strategies; improve workforce productivity; and heighten the ability to evaluate the availability of skills across the total workforce. This will require HR (Human Resources) – which is traditionally tasked with hiring full-time employees – and procurement – which is typically tasked with hiring contingent talent – departments to be more integrated and less siloed, while employer branding will need to focus on the full spectrum of available talent and not just permanent staff.

Businesses across Europe are capitalizing on technology and embracing more flexible talent structures to navigate the evolving landscape of work and to leverage the multiple benefits technology offers. In parallel, workers are opting for more flexibility and choice over their working lives, while reaping the benefits of new technology-driven solutions. This reality should be facilitated by the legal framework in Europe rather than hampered by it. EU Member States therefore have a great opportunity in their hands and would be foolish to waste it.

 

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