Gig economy: Adjusting to the new nature of work

The American workforce is undergoing dramatic change, becoming a more flexible, collaborative network that redefines the definition of the “worker.” In this gig economy, people are growing comfortable with flexible working arrangements, moving between roles and between organizations, and working across geographic boundaries. This flexibility on the part of workers, combined with a growing demand for talent, has the potential to reshape the workforce into a collaborative, transparent, technology-driven marketplace. Simply put, in a few years, a significant number of people who work “for” your company may not be employees or even contractors. They may be temps, freelancers, collaborators or other types of virtual workers, all connected through online platforms to increase productivity.

Managing this gig workforce, however, requires some internal adjustments. Traditionally, freelancers and contract workers have been managed through the procurement department. Solving for talent and workforce challenges using a gig marketplace to connect workers with assignments begs greater HR involvement.

In the gig economy, HR faces new challenges around culture and compliance. How does a company create a common sense of identity among a disparate workforce? How does it ensure that gig workers are reinforcing the corporate brand or messaging? How does it maintain regulatory compliance and training for everything from harassment to data security when it doesn’t employ the workforce? Technology provides some answers. Collaboration software tools offer data that companies can mine to gain to track worker compliance and monitor the mood of the workforce. Many social media tools already generate insights into employee sentiment, and companies are finding that these same tools can be used to monitor behavior as well. Yet monitoring is just the start. How does the organization then cultivate a two-way relationship with these workers, instilling a belief in the organization’s mission, vision, and brand?

Developing a gig workforce comes with other unique risks. Companies may have to work harder to retain experienced employees. While firms tend to gain flexibility in managing payroll costs and adjusting fluctuations in the marketplace, they have less control over worker availability. Talent that a company was counting on for a specific project can disappear with little warning. This risk is amplified by record low unemployment rates, a highly transparent job market and rising expectations for hourly and contingent workers.

In addition, companies that operate in different countries face divergent laws with regard to contingent labor. Consider the wide-ranging policies adopted by local governments around the globe for how ride-sharing services compensate and schedule drivers. Or how even local governments are writing rules that require employers to set firm and adequate schedules for their contingent workforce.

Therefore, before companies can embrace the gig economy, they should consider several steps to change their definition of employment:

• Workforce planning must adjust both to account for the growing role of automation and to account for increasingly divergent and diverse talent sources.
  
  
• Companies must remove walls that they have spent years building. Many organizations are designed to keep proprietary data, patents, and technology separated from non-employees, for example. These barriers inhibit collaboration.
  
  
• Monitoring culture, engagement and the employment brand must be done objectively. How companies manage and interact with gig workers will affect their brand. Gig workers may not be on the payroll, but they are as much a part of the culture as full-time employees.
  
  
• Branding must extend beyond products and customers. Workers are no longer a captive market, and a company’s brand will extend into the workplace as well as the marketplace. Workers’ reactions and satisfaction with company engagement are likely to be shared on social platforms and will affect the organization’s ability to attract other workers in the future.
  
  
• Management must shift its focus towards the output of remote workers and away from how they spend their time.
  
  

The gig model is already disrupting traditional approaches to staffing across several industries. In technology, for example, large companies develop the operating systems that run smartphones, but hundreds of smaller firms, startups and individual developers use gig-based workers to create the apps that bring value to those systems for consumers.

Increasingly, companies outside of the tech industry that has traditionally used full-time employees are hiring gig workers for at least some of their operations. At the moment, many of these tasks require lower skills, but increasingly, demand for creative talent will grow. If a company has a special project that requires expertise its own workers don’t have, it may hire gig workers specifically for that project and pair them with employees. Groups will come together to work on a specific project, then disband. Some members will join other groups to address a different issue, perhaps at another company or in another country.

The growth in gig workers already is outpacing growth in the economy overall. From 2002 to 2014, while total employment increased 7.5 percent, gig economy workers increased by as much as 15 percent, according to the Aspen Institute. Increases in the number of independent contractors accounted for more than 29 percent all jobs added between 2010 and 2014.

As the gig economy shifts toward more creative work, the nature of the work may shift from shorter-term projects to longer-term relationships. Companies that are well positioned to capitalize on this new, flexible workforce will be those that embrace disruption in the workplace and begin now to rethink the nature of work and workers.