Article: Gig economy is here to stay: Deloitte's Kathi Enderes

Diversity

Gig economy is here to stay: Deloitte's Kathi Enderes

It’s time organizations should focus on creating an attractive value proposition for alternative workers and strategically leveraging them to help create value for the organization, says Kathi Enderes, Ph.D., VP, Talent and Workforce Research Leader, Bersin, Deloitte Consulting LLP, in an interaction with People Matters.
Gig economy is here to stay: Deloitte's Kathi Enderes

Kathi leads talent and workforce research for Bersin, Deloitte Consulting LLP, enabling organizations to transform work and the worker experience for increased organizational performance. With more than 20 years global human capital experience from management consulting with IBM, PwC and EY and as a talent management leader in large complex organizations, she specializes talent strategies, talent development and management, performance management, and change management. 

Kathi is passionate about helping organizations transition to the future of work. She holds a doctoral degree in mathematics and a master’s degree in mathematics from the University of Vienna, Austria.

Here are the excerpts of the interview.

It is projected that gig workers will comprise half the workforce by 2020, and as much as 80 percent by 2030. What do you see as the driving force of the gig economy? Why is it being debated more than ever?

In today’s rapidly evolving environment, change is the new norm. Workers and organizations alike are learning that agility is key to getting ahead in the future world of work. Skills requirements are rapidly changing, and unemployment is at unprecedented lows in many parts of the world. Not surprisingly, 67 percent of surveyed organizations worldwide are having trouble filling open positions.1

At the same time, more people work in the open talent market as contractors, consultants, freelancers, gig or crowd workers – also known as the alternative workforce. We see gig workers as part of the open talent continuum.

The debates are oftentimes on semantics: what exactly is a gig worker, as opposed to an independent contractor, for example. Definitions are often blurry, resulting in sometimes vastly different numbers of the size of the gig economy. Whatever the exact definitions, the number of people working in non-traditional employment scenarios is increasing. In recent years, facilitated by technology platforms that match gig workers with requisitions, gig work has emerged in areas as diverse as technical development, handyman services or driving cars over technical development to legal services, management consulting or project management.

To access the skills and capabilities of top alternative workers, organizations need a tailored value proposition carefully designed to workforce needs, culture and brand— unique to the alternative workforce

How do you see the future of work in the context of the rising gig economy?

Expansions in technology, global connectedness, and changing workforce and customer expectations are presenting new opportunities for organizations. But expansion typically brings disruption, as well as pressures and confusion on how to best cope with change. This new reality of work provides individuals and organizations opportunities and challenges in three interrelated areas.

The work: What work is. With the rise of automation, augmentation, and changing business needs to compete in the marketplace, the need for new skills and capabilities has required organizations to re-think how work inputs (work activities) and outputs (work products) should change as well.

The workforce: Who can perform the work. Workers of the future embrace opportunities to design unique career paths that do not fit in traditional talent models. Contingent work allows workers with an increased diversity of education level, geographies, skills, experiences, aspirations to access opportunities they would not have had otherwise. The workforce can span human workers and machines, working together in machine/human collaborations. 

The workplace: Where and when the work can get done. Alternative work models have required organizations to embrace workplace dispersion across time zones and physical locations, inviting new types of teaming through technology to help maximize collaboration, productivity and performance.2

According to a study, overall self-employment is likely to triple to 42 million workers by 2020, with millennials leading the way. How can businesses leverage the millennial alternative workforce moving forward?

It’s important to not make the gig economy about a specific generation or a single workforce segment. Regardless of generation, the best alternative workers will have their choice of organizations to work for, and we see this as the next frontier in the war for talent. People look for more than a paycheck, they demand an engaging experience, to feel valued and respected, meaningful work, opportunities to use their strengths, access to tools and resources to help them succeed, and a balance between flexibility and predictability.3

To access the skills and capabilities of top alternative workers, organizations need a tailored value proposition carefully designed to workforce needs, culture and brand— unique to the alternative workforce. Many organizations have experience with taking a differentiated approach to attracting part-time employees versus full-time employees. This mindset can be transferred to attracting and engaging the alternative workforce as well. It starts with understanding what the alternative workforce values, and then designing offerings around those needs.

To be able to successfully empower the alternative workforce will require cultivating ongoing relationships, even though employment might not last long. Each alternative worker should be considered as a potential customer, a positive brand ambassador, and a valued member of a team. 

One of the promises of the gig economy is that workers have more flexibility to work when and as much as they want. What are the motivating factors behind the swelling gig force?

Deloitte’s 2018 Millennials study identified that more than two-thirds of surveyed participants engage in “side hustles” to help pay the bills4. Beyond making money, alternative work offers flexibility in schedule and work location, a variety of work, building relationships and networks broadly, and a modular way to build diverse experiences, and to build their own career and network. 

On the other side, many organizations try to pivot their workforce strategies to incorporate alternative workers. This approach can provide various benefits to organizations:

  • Potential for reduced costs 
  • Increased organizational agility
  • Access to a wider range of skills and capabilities
  • Increased flexibility to scale the workforce, staffing for temporary needs
  • Greater diversity of perspectives and backgrounds.

Do you think the inroads made by technology such as AI and ML will have a significant influence on pushing some jobs out of the traditional and into the gig domain?

The 2019 Deloitte Global Human Capital Trends report shows that while 80 percent of organizations expect the use of smart technologies to increase, only 13 percent see this resulting in significant job eliminations5. More and more organizations are setting their sights on the significant upsides of reinventing work itself with technology, amplifying human capabilities like innovation, empathy or collaboration through the use of smart technologies. Rather than focusing on just cost savings for the organization, forward-looking organizations balance cost, value, and meaning in their transformation efforts, looking to create a better experience and broader purpose for their workforce and their customers. This strategic approach to evaluate work, the workforce and the workplace in conjunction with a sense of can create better outcomes for the organization, the workforce, and customers. 

80% of companies, in a survey, agree that managing gig workers requires a different approach than managing full-time employees. How can different industries settle with their unique talent mix including gig workers?

Despite all of the benefits organizations can reap from the alternative workforce in general and gig workers in particular, only about one in five organizations actually leverage the alternative workforce to a large extent. The vast majority of organizations do not have a strategic approach around this workforce segment,6 or they manage and develop them inconsistently.7 Harnessing the power of the alternative workforce requires a unique value proposition, a positive experience specifically cultivated for this workforce segment and a broader workforce strategy. 

This includes strategically defining:

  • the work most suitable for gig workers
  • how they will interact with other workforce segments
  • how they will be part of teams and workgroups
  • how their work will be managed, rewarded and evaluated

Then, organizations need to develop necessary skills and experiences within leaders, managers and employees to execute on these talent priorities. 

What are the major challenges facing the big gig force? And what are the major hurdles facing organizations in terms of talent management and culture?

For individuals, gig work can provide many benefits – most importantly, flexibility in the nature, time and location of their work, variety of opportunities and a modular way to build a career and experiences. Technologies make it easier than ever to find gig work. The challenges many gig workers face are around predictability – being able to keep the schedule full but not overflowing – and a sense of belonging at work, as teams and leaders might be changing rapidly, making it hard to feel truly connected. 

For organizations, the biggest hurdles are around a strategic approach to gig workers – specifically, who ‘owns’ talent management of these workers, leader capabilities to seamlessly manage various workforce segments, and concerns about often blurry legal and regulatory requirements that can be interpreted in many different ways. 

In the future, organizations will need to strategically evaluate how work gets done and by whom it gets done, and cater to the needs of different workforce segments in different ways in order to provide more meaningful work

Do you believe the gig economy is the way of the future? Where do you see the gig economy in the next 10 years?

While the gig economy is here to stay, it’s not going to be the destination for every person in every situation. In the future, organizations will need to continuously and strategically evaluate how work gets done and by whom it gets done, and cater to the needs of different workforce segments in different ways in order to provide more meaningful work – and broader value to the organization itself, its entire workforce and its customers. This can include a mindset of giving gig workers more of what employees have – the sense of belonging to a team, and meaningful work – while also giving employees more of what gig workers have – variety and flexibility of work. Organizations that purposefully design a positive, personalized experience for their entire workforce, including gig workers, have better customer and financial results, and impact the communities they serve in a positive way.8 It’s a win/win. 

Organizations can rethink their workforce strategies for the gig economy:

  1. Start with outcomes. What business goal are you trying to accomplish with the alternative workforce? A balance of cost, increased value and growth, and meaning is key. Once you are clear about what you are aiming for, define how you will measure success, and keep track to continuously improve. 
  2. Imagine the possibilities. Broadening the talent pool to strategically take advantage of alternative workers presents myriad opportunities. Check your assumptions, think big, and create bold ‘what if’ scenarios. 
  3. Compose a plan. Prioritize your starting point. It could be where there is high value for customers, where leadership is ready, where skills are particularly hard to locate, or where most flexibility is needed. From there, create a plan for activating the alternative workforce. 
  4. Activate the workforce. Access this workforce starting with a tailored value proposition. Curate engaging experiences for the alternative workforce. Engage the workforce—high-performing organizations are 4.8x more likely to provide alternative workers with performance goals and 10x more likely to provide them with regular performance feedback.9

The alternative workforce is here to stay. To leverage the power of this workforce segment and position your organization to get the most out of the relationship, focus on creating an attractive value proposition for alternative workers and strategically leveraging them to help create value for the organization, the workforce and the customer. 

 

Notes

  1. 2019 Global Human Capital Trends: Leading the social enterprise—Reinvent with a human focus, Deloitte Consulting LLP and Deloitte Insights, 2019.
  2. Creating value and impact through the alternative workforce, Deloitte Consulting LLP, 2019
  3. High-Impact Workforce Experience study, Bersin, Deloitte Consulting LLP, 2019.
  4. Deloitte, 2018 Deloitte millennial survey: Millennials disappointed in business, unprepared for Industry 4.0, 2018.
  5. 2019 Global Human Capital Trends: Leading the social enterprise—Reinvent with a human focus, Deloitte Consulting LLP and Deloitte Insights, 2019,
  6. 2020 Future of Talent Study, Bersin, Deloitte Consulting LLP, 2020
  7. 2019 Global Human Capital Trends: Leading the social enterprise—Reinvent with a human focus, Deloitte Consulting LLP and Deloitte Insights, 2019.
  8. High-Impact Workforce Experience study, Bersin, Deloitte Consulting LLP, 2019.
  9. High-Impact Performance Management study, Bersin, Deloitte Consulting LLP, 2018.

 

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Topics: Diversity, #GigEconomy

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