A considerable amount of the workforce makes a living by working nine to five. However, the number of people who choose to work independently with multiple income sources is constantly increasing by the day. Surveys conducted prove that new generation workers prefer independent work as compared to full-time salaried employment by more than 2:1.
What Is the gig economy?
The gig economy, in simple terms, is a free market system where part-time, temporary positions are common and where businesses tend to contract with independent workers for short-term engagements.
The improvement in the economy is changing in how present-day organizations maintain their business and deal with their workers. The gig economy model allows workers to take a specific part of a job and this becomes a win-win situation for both the company and the employees.
The tech-driven industry of convenience
The recession period saw giggers crowding the customer service segment of work. The inclusion of a flexible workforce eventually opened up organizations to the idea of being more agile and accommodative. What changed was that about 70% of employers in the developed countries truly believed that giggers increased their profitability and efficiency.
Though there is no accurate estimate of their numbers, it is projected that this ‘flex’ or ‘mobile economy’ will comprise half the workforce by 2020, and as much as 80% by 2030. Gig Economy is figurative of the kind of contract work expanding into every corner of the economy.
A McKinsey study estimates that 20–30% of the workforce in developed countries already engages in some form of independent work. A report by ICRIER states that there are 15 million Indian freelancers that contribute to about 40% of total freelance jobs offered worldwide. Adding to this, India is home to the second-largest market of freelance professionals (about 15 million), standing next only to the US (nearly 53 million). The majority of them are employed full time but also work side-hustles which they earn from.
Organizations are shifting towards the gig economy – The reason behind it
The gig model offers organizations with more flexibility, reduced fixed costs, and the ability to adapt to market changes faster. Also, this allows organizations to tap into a fresh talent pool.
From the employee standpoint, the gig model offers relatively more flexible work hours, a superior life balance, and more self-governance.
Changing business and societal norms, a change in perspectives and changes in career goals coupled with a shift in generational work ethics have combined to make work a part of a lifestyle as opposed to a distraction from it. The gig economy is on the brink of changing it all.
This means that work today is far more different if compared to what the scenario was a decade ago and such changes are the pattern will continue. There has been a paradigm shift in the mindset, career is no more about a job but a sense of accomplishment. With digital technology, the ease of entry, and affordability coming into the picture, more and more people from various works of life and demographics are shifting to the gig model of the economy.
The question-of-the-hour is what this means for businesses. The gig economy has become an added advantage for businesses as it eases the process of finding giggers (where online has played an important role), cost-effective and efficient substitute for sudden vacancies, among others.
Hiring giggers reduces fixed costs such as training costs, onboarding costs, medical, or other HR programs. The only cost is in the form of a paycheck that covers just the work they are hired for.
Onboard effectively – Any organization that encounters turnover realizes that the onboarding procedure can be expensive and tedious. You don’t need to complete several HR programs that include inductions and other meetings.
Challenges faced by organizations
There are some of the significant drawbacks that come along when hiring for such a model. The areas that organizations find to be tricky while dealing with giggers constitute talent management, quality of supply, performance management, and on their training front.
While it is easy for organizations to find individuals who have the right expertise and skillsets for a certain job, it becomes challenging to onboard someone who is culturally fit with the right set of behavioral attributes. The turnover rate is comparatively greater when it comes to gig workers because of the fact that the assignment might not the be dream job or it could be for some quick way to earn more money.
Furthermore, frequent gig departures result in continuously losing company secrets, which is a threat to a business. This leads to difficulties for the company to retain its acquired knowledge. Another challenge that businesses face lies in engaging the contingent workforce to stay in the company for the long haul.
Possible solutions to capitalize on the gig economy
The “Gig Economy” is prospering and will keep growing. In reality, a more significant number of organizations are influenced by an alternate work system and it is high time for HR leaders to start pondering on practical strategies to incorporate the liquid workforce strategy.
Companies and HR need to focus and invest in competency-based hiring. There must be a unique competency framework aligned with business objectives for hiring a contingent workforce. In addition, the training model needs to be revamped. Organizations must identify and map the skill gaps in your gig workforce to design an effective training program.
There should be some level of engagement with gig workers. As a matter of fact, the chances of giggers leaving are much higher unless they are appropriately engaged. Make them understand where and how your business derives its revenue.
It’s also important that organizations invest in an active LMS that could communicate your objectives clearly, for gig workers are more often remote, transient, and busy. The training should include leaders communicating mission and values concisely. Talking about the training and development interventions, be mindful of some pointers. The training needs to be delivered in a smaller section and that too, frequently.
And the future
When all this comes together, it becomes clear that the gig economy will continue to develop. The next couple of decades could even see the end of the full-time position as the predominant mode of employment. Instead, organizations may function on a skeleton staff of decision-makers and leaders, dipping into the global talent pool of gig workers to fill in the gaps. These workers will be drafted into work on projects, with short-term contracts lasting days, weeks or months. Organizations and workers will develop broad networks of contacts along the way, helping both to shape and sell their brand.
This changing nature of work will be accepted by many, but others will resist the shift away from stability and predictability and towards the relative unknown of gig work. But the time when full-time jobs were secure is now long gone – almost no full-time employees today can guarantee they will be in the same position in a year’s time. For this reason alone, freelance and project work may well be the future for most people.