HR and the Gig Talent Economy
The gig talent economy has been on the rise for many years. It has been most prevalent in certain industries such as consulting and Information Technology. Most companies are changing and evolving at break-neck speed to keep up with customer experience, expectations, competition, innovation and digital disruption. Internal labor markets alone cannot sustain the changing business models. Companies are realizing that their ability to attract gig talent has a direct impact on a business’ ability to drive its performance and growth.
According to McKinsey Global Institute’s paper ‘Independent Work: Choice, Necessity, and the Gig Economy’, “some public estimates place the amount of the workforce involved in contingent work as high as 40%”. Future workforce planning will include full time equivalents, consulting and other partners, independent on-demand workers, workforce agency temporary/project worker and independent specialized consultants.
So how can gig talent drive company agility?
- Bring deep expertise to a company.
- Buttress speed to market and deliver capability ahead of time.
- Change, adapt and scale rapidly based on the context. For example, you can engage the right talent to manage a turnaround, research and development or other key specialized projects.
- Infuse knowledge into an organization that it otherwise might not have.
There are also practical implications for considering gig talent. Companies must decide whether to build, buy or borrow talent to meet work demands.
For example, it is hard to find talent such as scientists and engineers. These positions also lend themselves to remote work, thereby expanding the available labor pool from local to global geographies.
According to a research study conducted by Josh Bersin as HR People + Strategy, more than half of hiring managers (59%) are experiencing a severe shortage in skills and capabilities. When team leaders, managers, or executives see a skills gap, they want to fill it fast. If a company has a good understanding of talent pools within and outside the company, it can more quickly find independent workers to fill identified needs.
Work-life integration continues to challenge traditional work arrangements. Child care, elder care and commute times create barriers for many workers who would otherwise thrive in a flexible work arrangement.
With salaries and benefits for key talent continuing to increase, using gig workers can reduce the strain on budgets. Workers can engage and disengage as needed, versus being a permanent fixture on company payrolls. In addition, the recruitment and retention of fixed employees carries a hidden cost that is not realized with gig workers.
To support this increased rate of change, HR must help create a strategic gig talent capability, using non-traditional methods of staffing to support the business and itself. With continuing budget pressure, HR will have to consider a revised staffing model where 20%-40% of the headcount within HR needs to be gig talent, according to Hai Abburi from Founding Fuel. For example, if HR wants to build an augmented reality (AR)-based training module, hiring an AR design and delivery expert can create a product and get it to market much quicker than partnering with IT to get this done.
Human resources must also build an independent workforce capability for the organizations they support. HR must attract and acquire gig workers, create external gig talent networks, and build databases of talent pools.
The challenge for most organizations is that the process to attract, engage and pay a gig worker is cumbersome. Since building gig talent is a relatively new capability, many organizations have not assigned resources to own the process and thus engaging gig talent is time-consuming and inefficient.
Here are some considerations.
- Recruitment for gig-workers needs to be easy and fast, not drawn out. From sourcing to selection to onboarding it must be a matter of weeks, not months.
- Gig-workers must be evaluated against performance measures and specific deliverables. The goal is to get the job done and exit the gig-worker.
- The right technology must be in place to automate joining and leaving processes and ensure they are smooth and easy to manage so as not to increase the administrative burden.
- The company must manage the quality and terms of the contract.
The gig economy represents an opportunity to access expertise and skills to bring products to market or meet specific goals. Gig talent can also accelerate internal learning by transferring knowledge from the gig worker to employees. After almost 25 years of working inside corporations, I am now actively working as a gig worker. I have experienced first-hand how my unique knowledge, talents and strengths (both hard and soft) can transform a business to be high-performing and high-achieving. By interacting with others not only on the “what” but also demonstrating the “how”, I am elevating the internal HR capability currently and for the future.
As a result of the coronavirus, how we work will forever be changed. The pandemic has caused companies to recognize that current work constructs are unsuited for the demands of the modern workforce. Flexibility is key for people to bring their best selves to their work. Flexibility is also a driver for talent who want to enter the gig economy. We will continue to see a shift toward gig work as talent models are reconstructed to allow for alternative work arrangements that serve both people and companies well. HR is key to enabling this shift and should be at the forefront of creating the gig talent capability for their companies.
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