Workforce Flexibility in Retail: Casual Staff or the Gig Economy?

If you are in retail and have not yet heard of the term “gig economy”, it’s time to find out what it means because it could potentially have a big impact on your business and your bottom line.

The term refers to employment where rather than staff being taken on as casuals or permanent employees, they are instead employed as contractors under their own ABN.

Investopedia explains that the gig economy:

• Is based on flexible, temporary, or freelance jobs, often involving connecting with clients or customers through an online platform.
• Can benefit workers, businesses, and consumers by making work more adaptable to the needs of the moment and the demand for flexible lifestyles.

Whilst the term ”gig economy” is often associated with taxi and delivery drivers, a large range of occupations can be included in the “gig” workforce.   For example Dog walkers, graphic designs, caregivers, freelance writers could all form part of the gig economy. This is distinctly different from casual (or permanent staff) who are employed by a business.

Distinguishing Between Casual Employment and the Gig Economy

To illustrate, let’s use Eddie’s Pizza Shop as an example: 

Casual or Permanent Staff: The staff who are hired by Eddie’s Pizza taking the orders and making the pizzas and are employees of Eddie’s Pizza.

Gig Economy Workers: The staff who are contracted through platforms such as Uber Eats to deliver the pizza from Eddie’s to your home, using their own car and paying for their own petrol to do so, are self-employed and are part of the gig economy.

Demand for retail staff

Retail, with seasonality of trade and tight margins potentially restricting the ability of employers to offer permanent roles, has always lent itself towards having a significant proportion of casual employees.

Jobs and Skills Australia tell us that as of May 2024 currently approximately 9.2% of Australia’s workforce is employed in the retail sector or approximately 1,320,300 people and whilst over the past 20 years the retail trade workforce has shown a general upward trend,  yet over the past 12 months, the retail workforce has fallen by 12,500 (or 0.9%).

Retailers considering gig economy over casual workers  

 Australia’s Fair Work Ombudsman (FWO) defines casual employment as work that ‘does not include a firm advance commitment that the work will continue indefinitely with an agreed pattern of work’. 

The FWO National Employment Standards provides a pathway from casual to permanent employment, also known as ‘casual conversion’.

With swings and roundabouts in trading levels having a huge impact on how retailers employ staff and under what conditions, it’s understandable some may be looking for ways to avoid the onerous on-costs of employing formerly casual staff in permanent roles.

In these cases, attention will naturally turn to the gig economy and finding ways to outsource work and better utilise contractors.

And in some cases it will absolutely make sense. But for others, whose business will benefit more from having stable staffing and who may struggle to compete for retail staff in this current environment, this could prove to be disastrous for their company.

The key to making the right decision will come down to how well an owner knows their business and clientele and what is needed to make them thrive.