Managing the paradox of the alternative workforce
Your order from UberEats is delivered by an executive on a bike that has a Swiggy tag, taken out from a bag that says Zomato. Your Ola driver is the same guy who dropped you off the other day when you booked a cab using the Uber app.
Sound familiar? It’s a sign of change. There was once a time when being associated with more than one company was frowned upon or actively discouraged. The advent of the gig economy has changed all that. The alternative workforce has gone mainstream.
In Deloitte’s latest survey on global human capital trends, the evolution of the alternative workforce was at the top of the list. For many years, employers considered contract, freelance and gig employment to be “alternative work”, options to supplement full time jobs. Today, 33 percent of survey respondents use alternative workforce for IT, 25 percent for Operations, 15 percent for Marketing and 15 percent for R&D.
By 2020, the number of gig workers in the US is projected to triple to 42 million1. Growth rate of employment in the freelancing labor market has also been faster than the overall employment growth rate in other regions like EU, UK, etc.
By understanding what makes alternative workers tick, an organization could also potentially change the way work gets done across the board. Autonomy and flexibility are desirable for anyone, not just those working gigs.
Most organizations are using their alternative workforce transactionally, not strategically
In India’s unorganized sector, which constitutes 82 percent of the workforce2, alternative labor has thrived for centuries. Artisans, construction workers, semi-skilled laborers… there has been a plethora of diverse talent in this space. It’s the organized sector which is yet to tap into the full potential of this workforce model. While organizations have been striving to bring this to their home turfs, it has mostly been restricted to transactional jobs which can predictably be outsourced.
The survey results suggest that today organizations need to move from “managing” this workforce while it performs tactical activities, to “leveraging” it to achieve strategic objectives. Aggregators like Uber, Ola and Swiggy have given a masterclass on this, by adopting business models which directly call for entering into a mutually beneficial relationship with gig workers, instead of the arrangement being a temporary solution to full time work.
How do organizations optimize and leverage this workforce trend to integrate with their business model and further their strategic objectives?
To begin with, deploying the alternative workforce in areas outside of the most obvious (for example, IT) has the potential to allow organizations to reap the benefits of on-demand expertise across functions. Also, as the workforce grows more flexible, so too should talent sourcing. The good news is, HR is getting increasingly involved in the sourcing of alternative workers. More than half of Deloitte’s survey respondents said that their organizations had specific plans to address recruitment strategies for the alternative workforce. What is needed is a sourcing strategy that allows the organization to connect the appropriate talent with the appropriate role, no matter where the talent comes from.
By definition, alternative workforce is a revolving door of talent
The very reasons which make gig/part time/freelance work a lucrative alternative for workers - flexibility in duration and a sense of independence - can potentially create hurdles in achieving the objectives of the job. By the time a worker gets accustomed to the way things happen in the organization, the job he was brought in for could be well under way, or even completed. An individual may not be able to reach his full potential on the job, if significant time is spent on adjusting to new ways of working.
How do organizations adopt a “plug-and-play” model, so that benefits of the expertise can be reaped from the get-go, and inordinate time isn’t spent in acclimatizing to the culture?
Organizations can try to circumvent this issue to an extent by opting for value-based hiring, so that qualified workers who are most closely aligned to the organizations’ values are brought in. However, to do this, organizations first need to have clarity on the values and behaviors that are most important to them. Increasingly, they are also taking advantage of a growing portfolio of alternative workforce management tools in the market.
When leveraged the right way, the inclusion of alternative workers has the potential to enhance organizational performance.
Acquiring an alternative workforce is one thing; but how do you keep them engaged?
An alternative worker willingly foregoes the reliability, company perks and associated benefits of a full-time job in favor of the freedom and flexibility that comes with a gig. However, organizations have historically designed reward frameworks to attract and engage talent using the compensation and benefits of full-time jobs.
How can these frameworks evolve for a new type of talent altogether, for whom conventional wisdom around rewards may not apply?
Engaging alternative workers requires a culture of acceptance and respect for these workers and the skills they bring. To start with, leaders need to design teams that include alternative workers, and expanding the teams’ purview beyond tactical work. This way, organizations nurture diverse teams built to achieve strategic objectives, while promoting mutual respect and loyalty.
In Deloitte’s latest survey on global human capital trends, the evolution of the alternative workforce was at the top of the list. For many years, employers considered contract, freelance and gig employment to be “alternative work”, options to supplement full time jobs. Today, 33 percent of survey respondents use alternative workforce for IT, 25 percent for Operations, 15 percent for Marketing and 15 percent for R&D
Organizations also need to focus on relationship-building. This doesn’t just help with engagement. By learning more about the alternative worker, organizations can reinvent rewards to be more responsive to an individual’s needs and wants.
By understanding what makes alternative workers tick, an organization could also potentially change the way work gets done across the board. Autonomy and flexibility are desirable for anyone, not just those working gigs. An organization which reinvents “work” and the “workplace” could have a positive impact on the engagement of full time employees as well (for instance, by introducing remote working policies).
Think about your organization. Which of your jobs are “gig-able”? Which are core and cannot be outsourced? Consequently, what are the different employee segments that the organization must cater to, and how do you acquire, engage, reward and retain each segment? If there are gaps in skills or people, how will you bridge the gap? Importantly, how will you equip your organization’s leaders to lead diverse teams?
By themselves, gig workers are just threads without the support of an organizational fabric. To weave them together and to get the best from talent, a solid workforce strategy needs to be in place.
- Leading the social enterprise: Reinvent with a human focus, 2019 Deloitte Global Human Capital Trends
- Labour Force Survey, National Sample Survey Report 2011-12, Ministry of Statistics and Programme Implementation