Deliveroo is a British food delivery company established in 2013. It operates globally, including in Singapore, where it employs over 9,000 riders and partners with over 2,500 restaurants to provide top-notch meal delivery services. This study evaluates the company’s human resource management techniques by analyzing the psychological contract and Atkinson’s Flexible Firm model. The HR practices based on Atkinson’s model aim to incorporate flexibility in the company’s internal and external aspects to maintain a competitive edge in the market and adapt to technological advancements. However, there are risks associated with having a flexible workforce, as downsizing may have negative consequences if future circumstances cannot be predicted. The gig economy workers set expectations in their relationship with their employer, known as a psychological contract. Despite criticism, Deliveroo has been successful in addressing concerns regarding its riders.
Atkinson’s Flexible Firm Model
Atkinson’s Flexible Firm Model is a framework for evaluating the adaptability and flexibility of an organization’s workforce and human resource management procedures. The concept was created in the 1980s by British economist and management consultant John Atkinson, and it has been widely applied to the management of human resources and labor relations (Beukema,2019). Functional flexibility, numerical flexibility, and temporal flexibility are the three areas into which the model divides flexibility.
With Atkinson’s model, which strives to provide flexibility, the majority of employers in recent years have focused heavily on delivering employees’ requests that have been discovered to have highly flexible working models a chance. The demands of both employers and employees are highly complementary. However, the workers are almost always hurt because of the ongoing employee-employer disputes (Alajmi & Lengyel,2020). Due to its flexibility, part-time jobs can have poor pay and unstable employment. There is a prospect for convergence in demands when employees have the option and chance to choose a contract.
As a result, having highly flexible work schedules keeps Atkinson’s flexible model alive. Despite some negative aspects, the model best analyzes the organization’s flexibility. Atkinson’s Flexible Firm Model is useful for evaluating and analyzing an organization’s human resource management practices and identifying areas where they can improve flexibility and adaptability (Assaf et al.,2020). However, it is essential to note that flexibility can come with trade-offs, such as lower employee morale and turnover. Organizations should consider these trade-offs when implementing flexible policies.
In the instance of Deliveroo in Singapore, the nation’s economy typically gains from the company’s support of over 6,000 job possibilities. This usually refers to all the business locations where different workers and riders are discovered to be spending money. Another business that significantly boosts the development of the gig economy is Deliveroo. In addition, the many types of organizational flexibility have been outlined by Atkinson’s model.
Numerical Flexibility
The ability of an organization to change the amount of its workforce as necessary is referred to as numerical flexibility. A company with this kind of flexibility can make the required hires or layoffs to adapt to changes in client demand or market fluctuations. Atkinson’s Flexible Firm Model suggests that a company’s numerical flexibility is determined by its ability to adjust the number of workers it employs in response to changes in demand (Alajmi & Lengyel,2020). Based on the information provided, Deliveroo in Singapore has implemented a low-cost business model that relies on independent contractors to provide most of their delivery services.
This allows the company to have a relatively high level of numerical flexibility, as it can quickly increase or decrease the number of contractors it employs based on changes in demand.
However, some things could be improved with this approach. The company may need help retaining a stable pool of workers if the demand for its services is consistent, which can lead to issues with worker availability and quality of service (Assaf et al.,2020). Additionally, the company may face legal and reputational risks if it is not able to provide enough work to its contractors or if it is not able to provide them with fair compensation.
Functional flexibility
Functional flexibility is an organization’s capacity to change its staff’s functions and capabilities in response to shifting market conditions. With this level of adaptability, a business can quickly change the responsibilities and abilities of its employees in response to changes in client demand or market movements (Atkinson et al.,2022). Deliveroo’s use of the gig economy model to provide functional flexibility has allowed the company to quickly adapt to changes in customer demand and shifts in the market. Still, it has trade-offs regarding employee stability, quality, and engagement.
Based on Atkinson’s Flexible Firm Model, Deliveroo in Singapore has implemented functional flexibility by using a gig economy model, which relies on a large pool of independent contractors to make deliveries on demand. This allows the company to quickly increase or decrease its workforce to meet changes in customer demand (Atkinson et al.,2022). This type of functional flexibility allows the company to adjust the skills and roles of its workforce in response to changes in customer demand and shifts in the market.
However, this approach also comes with some drawbacks. Independent contractors typically have more job security or benefits than traditional employees, leading to a high turnover rate and difficulties in building a stable, dedicated workforce. Additionally, it can be difficult for the company to ensure that all the contractors have the necessary training and skills to provide a high-quality service. Furthermore, independent contractors are not employees, which means that the company is not legally responsible for providing them with benefits such as health insurance, vacation pay, or retirement benefits, which can lead to lower morale and engagement among the workforce.
Temporal flexibility
Atkinson’s Flexible Firm Model describes temporal flexibility as the ability of a firm to respond quickly and effectively to changes in demand for its products or services. According to this model, a firm with high temporal flexibility can adapt its operations and processes to meet changes in order promptly. It is important to note that the flexible firm model is a theoretical framework, and evaluating a company’s temporal flexibility would require an in-depth analysis of its operations and processes. Due to the agreement of the contract, the riders of Deliveroo have been categorized as freelancers from the company’s standpoint.
Having a rider obliged to go the extra mile and work extra hours, especially at peak times, is immensely valuable to the company. This could provide the company with a high degree of temporal flexibility regarding its ability to respond to changes in demand for its services (Healy, Nicholson & Pekarek,2018). Additionally, the company takes advantage of working extra hours to make more profit. The employee and the employers find it satisfying since it tends to be optional with great premium rates. From the employees’ perspective, the riders can work how they want to, depending on their flexibility, thus increasing productivity and engagement with the employee. However, as a food delivery company, Deliveroo likely relies heavily on technology and automation to facilitate the coordination of its delivery fleet and promptly process orders.
Psychological contract
Over the past few years, the human resource management team has significantly advanced in understanding the psychological contract. The fundamental cause is that the relationship between employers and employees today tends to be more intricate than what is reflected in the employer-employee agreement (Van den Groenendaal et al.,2022). On the other hand, the fact is that there is a deep and complicated relationship that tends to go beyond some formal legal agreements that are always given and discussed by the two parties. As part of the legal contract, each party carries the responsibilities and expectations towards the other.
The psychological contract is the unwritten, frequently tacit agreement between an employer and employee regarding the mutual responsibilities and expectations that form the basis of their working relationship. In the case of a business like Deliveroo, there may be a range of expectations and commitments included in the psychological contract between the company and its employees (delivery riders). The psychological agreement that Deliveroo has with its delivery drivers, who are classified as gig economy employees, may be distinct from the typical employer-employee relationship in this situation.
In Deliveroo Singapore, the company’s business plan and human resource management systems include gig economy workers. The organization is categorized under the contract as a platform rather than an employer. Hence their riders are classified as independent workers. The hiring procedure is conducted through the Deliveroo platform, so potential riders must first register for an account on the business website and provide their contact information (Van den Groenendaal et al.,2022). To be eligible to ride, candidates must fill out various forms and provide appropriate information.
Then the rider’s work is completed with a computerized app, which is utilized to send and receive messages about orders. As a result, the employer and employee still need to have a formal contract as opposed to the corporate approach, which tends to define a contract for hiring staff members permanently, including their salaries and the benefits and drawbacks of the assignment (Deliveroo, 2019). The current relationship between the riders and the employer is often based on a psychological contract due to the HR management team’s procedures.
The Human Resource Management team at Deliveroo Singapore emphasizes the gig economy by providing riders with a service delivery employee with a flexible work schedule based on a contract representing labor and payment. Freelancers generally enjoy the benefits of flexibility and pay in their diverse programs (Danilwan, Isnaini & Pratama,2020). Deliveroo can hire them by providing flexible compensation and help instead of engaging permanent employees, who can be highly demanding. The business has successfully established transactional development, enabling it to realize profits in the corporate sector. In essence, the contract can constantly be amended through continuous communication, thus necessitating a long-term relationship.
Engagement between the employer and the employee
Deliveroo has launched a “silver ribbon partnership” employment model in Singapore to increase employee engagement by offering riders more excellent aid regarding their mental health control over their work. This includes providing flexible scheduling, the option to select which orders to accept, and access to chances for training and professional growth. Thus they become subject to the company’s contractual nature (Glassdoor, 2019). Nonetheless, Deliveroo has been looking at the reviews they acquire from the employees to see the areas they need to improve and work on.
The theory behind this concept is that Deliveroo can build a sense of ownership and involvement among its staff, resulting in enhanced engagement and, eventually, better performance by empowering riders and treating them as partners rather than just employees. The company is responsible for identifying and recruiting suitable candidates for delivery rider positions (MM,2021). This includes sourcing candidates, conducting interviews, and ensuring that new hires meet Deliveroo’s standards for safety and quality. Also, human Resources provides training and development opportunities for new and existing riders to help them improve their skills and perform their jobs more effectively.
Benefits of the employee
Deliveroo Singapore has partnered with the Singapore Red Cross Organization and Silver Ribbon of Singapore to reach out to its drivers and offer physical and mental health support. The drivers’ well-being is enhanced by this relationship, which also gives them access to the tools they need to improve their physical and emotional health. Deliveroo also offers insurance coverage for accidents and injuries that may happen to gig workers while they are on the job. Knowing they are protected in an accident can provide gig workers and their family peace of mind (MM,2021). Deliveroo may be addressing some of the fundamental problems in the current psychological contract that have a direct bearing on the lives of their riders by such silent efforts to make their riders comfortable.
Another benefit is the flexibility of the work schedule. Gig workers for Deliveroo can choose when they want to work and how long they want to work. This allows them to balance their personal and professional lives as they see fit. They can also work in different areas and at other times of the day, depending on their availability and preferences. Deliveroo gig workers are independent contractors, which means they are not tied to a set salary or hourly wage (Glassdoor, 2019). Instead, they are paid based on the number of deliveries they make. This allows them to earn money based on their efforts and skills, which can be especially beneficial for those looking to supplement their income or start a small business.
Conclusion
Finally, being one of the businesses that frequently engage in the gig economy, Deliveroo’s human resource management has been evaluated using Atkinson’s flexible firm model, which has shown to be fruitful. For both the business and the employee, Deliveroo has been a win-win situation. The model also has the propensity to handle the business’s problems in several areas. Therefore, as one of the recommendations for potential solutions, the issue can be resolved in conjunction with the psychological model since the model tends to explore the hidden agenda from the employees’ perspective and, if adequately addressed, could be advantageous to the employer and the employee.
References
Alajmi, A. M., & Lengyel, P. (2020). Managing Employee Resources The Extent To Which Labour Flexibility Can Generate Employee Commitment. https://www.ceeol.com/search/article-detail?id=952308
Assaf, A. G., Atkinson, S. E., & Tsionas, M. G. (2020). Endogeneity in multiple output production: Evidence from the US hotel industry. Tourism Management, p. 80, 104124. https://doi.org/10.1016/j.tourman.2020.104124
Atkinson, C., Lupton, B., Kynighou, A., & Antcliff, V. (2022). Small firms, owner-managers, and (strategic?) human resource management. Human Resource Management Journal, 32(2), 449–469. https://onlinelibrary.wiley.com/doi/full/10.1111/1748-8583.12406
Beukema, L. (2019). Flexible Firm: John Atkinson. In Canon van HRM: 50 theorieën over een vakgebied in ontwikkeling (pp. 395-409). Vakmedianet. https://research.hanze.nl/ws/files/26998120/20190813_HOOFDSTUK_22_Atkinson_1_.pdf
Danilwan, Y., Isnaini, D. B. Y., & Pratama, I. (2020). Psychological Contract Violation: A Bridge between Unethical Behavior and Trust. Systematic Reviews in Pharmacy, 11(7).
Deliveroo. (2019). Ride with us. Retrieved from: https://deliveroo.com.sg/apply?utm-campaign=ridewithus&utm-medium=organic&utm-source=landingpage
Glassdoor. (2019). Deliveroo Reviews. Retrieved from: https://www.glassdoor.sg/Reviews/Deliveroo-Reviews-E1053365.htm
Healy, J., Nicholson, D., & Pekarek, A. (2018). Should we take the gig economy seriously? Labour & Industry: a journal of the social and economic relations of work, 27(3), 232-248 DOI: 10.1080/10301763.2017.1377048
MM, S. (2021). Influence of empowerment, psychological contract and employee engagement on voluntary turnover intentions. International Journal of Productivity and Performance Management, 70(2), 325–349. https://www.emerald.com/insight/content/doi/10.1108/IJPPM-04-2019-0189/full/html’
Van den Groenendaal, S. M. E., Freese, C., Poell, R. F., & Kooij, D. T. (2022). Inclusive human resource management in freelancers’ employment relationships: The role of organizational needs and freelancers’ psychological contracts. Human Resource Management Journal. https://onlinelibrary.wiley.com/doi/full/10.1111/1748-8583.12432
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