How your business can profit from gig workers
Companies like Uber and Deliveroo have become the poster boys of a new way of employing a workforce. They were quick to adopt Zero Hours Contracts and hire contractors to deliver their customers or produce. But these Standard-bearer brands represent the visible tip of a huge iceberg that is changing the employment market.
“Gig economy” describes an economy based on performing tasks and projects, generally today offered through a digital platform, This emerging contingent workforce is progressively replacing regular full-time employment and, in the U.S., is expected to be the majority of employment by 2027.
How large is the gig economy?
Morgan Stanley, reported in 2019 that up to 35% of the U.S. working population of over 55 million people may be engaging in temporary work of some form, while in the United Kingdom, Germany and France, the rate of growth in the gig economy is exceeding relative full-time employment growth (gig workers in the EU doubled in the years 2000-2014).
Ernst and Young suggest that since the financial crisis, full-time hiring rates among the U.S. S&P500 index of companies have fallen to 2.7% while gig working has increased. Similar trends are also observed in other economies — for example, in 2016, almost 5 million people performed commissioned tasks in the United Kingdom.
Nearly half of global company HR directors, surveyed by PwC, expect that external contractors will account for 20% of the total number of workers, while the value of the U.S. gig economy is expected to reach USD2.7 trillion in 2025.
Where is the gig economy taking hold?
Where is the gig economy taking hold? Well, research conducted by BCG on 11 markets indicates that the IT sector is most affected, where gig work provides the primary source of income for 9% of workers, while 24% see it as an additional income source. From our experience at Simplify Workforce, all industries are now taking their strategies towards an on-demand workforce seriously, with most adopting a Total Talent Management (TTM) ethos in the way they source work.
Whilst general perceptions of the subject are that gig working is only for manual or relatively low-skilled jobs like taxi driving, this isn’t backed up by hiring trends. It’s every bit as likely you’re going to find top-talent and hard-to-reach job skills (like scientific, technical and professional candidates) in the gig economy—because they can achieve higher rates of pay and an improved work-life balance—than in the full-time workforce. Adoption of gig workers is across the board.
New ways of packaging work
We’re all accustomed to identifying work that needs to be done and hiring someone on a full-time contract to do it. But work packages can be broken down in more ways than one, and approaches fashioned by victorian-era industrialists into hierarchical organisational designs might not be the most appropriate for the digital era!
As time moves forward, we’re seeing work packages becoming more fragmented into smaller and smaller packages. Consider:
Job Role Descriptions
Aggregating a series of ‘work to be done’ activities into a job role description is the most common way people have traditionally been hired. The benefit of this is the hiring manager is able to flex the activities within the scope of the role, and it gives the employee an indication of what’s expected of them.
They might be the most common form of work packaging format but job role descriptions have a downside:
- More often than not, such contracts include a broad sub-point that says something like—‘…and any other duties your manager may ask you to perform to assist in the achievement of departmental objectives.’ These catch-all statements mean that many professionals find they’re asked to discharge tasks that fall outside of the bounds of their subject-matter expertise and beyond the activities they enjoy fulfilling.
- They shroud the fullest capabilities of individuals. You can be sure that when someone applies to be an Accounts Payable Clerk, that’s not the only thing they’ve done in their life, or the only experience and skill they have. Much of the potential of a workforce gets lost in multi-layered hierarchical management structures and job descriptions that mean talent is bound tightly to departmental needs; prevented from being leveraged by the rest of the organization.
- They distort recruitments. Recruitments focus on finding individuals with the broad skills-set required to fulfil the combination of work built into the ’work package’ as interpreted by the hiring manager. But hiring managers are not organizational designers. This interpretation of work package might not best serve the organization.
- They shroud contributor performance because it’s not clear how contributors are fulfilling their time, and how well they’re being managed.
Discipline or Activity-Oriented Hiring Briefs
When hiring managers look to hire temp or contingent workers, they will focus contractual requirements (yes, in the form of a job description) more on the fulfilment of a specific discipline or activity, less on ‘and everything else’ departmental needs.
Re-thinking resourcing of work at departmental level
– Most work allocation happens at a departmental level within an organization and it’s important therefore to re-educate departmental managers on the viability of the various ways of getting a job done; equipping them with the encouragement and knowledge to question ‘norms of behavior’ that may not be in the best interests of the organization (or the payroll budget!).
Ask most CXE executives today, and most believe that the majority of their work activities are performed by full-time employees. In reality, an increasing amount of jobs are being fulfilled by machines (computers, software robots, algorithms, chatbots etc.) and a significant proportion of remaining work tasks are fulfilled by outsourcing firms and members of the gig economy. Knowledge portals and crowdsourcing platforms also win their fair share of work.
When jobs need to be performed, department heads have more options to consider. This is causing HR and recruitment professionals to encourage a joined-up ‘Total Talent Management’ approach to sourcing work, starting with a thoughtful triage approach that questions hiring norms of behavior that may be founded on ignorance, or the outmoded belief that hiring someone on a full-time contract is always the best solution.
Total Talent Management Portals: Technology supporting the gig economy
Changing attitudes and behaviors can be ‘enabled’ by effective Total Talent Management technology ecosystem. This takes the form of an integrated portal (like SimplifyPortal!) that equips recruitment teams to work with procurement and IT colleagues to adopt the best approach to getting work done. Central to the operation of a successful Total Talent Management approach are the following factors;
- Re-thinking Organizational Designs – In most companies today, recruitment is a function of HR, separated from procurement and IT. When work may be performed through technology automation, robots, full-time workers, gig workers, knowledge portals, crowd sourcing platforms or outsourcing firms, the best organizational unit to make decisions on how best to fulfil it is a centralized ‘organizational change and improvement team’ responsible for making triage decisions in the best interests of the enterprise; placing business outcomes over departmental aspirational priorities. Separating out these delivery options through different decision-making and sourcing channels only serves to distort the decision making process.
- Educating your audience – Departmental managers that hold a significant influence over how work is packaged and how it’s fulfilled need to be educated in the options at their disposal to get work done, although surprisingly few departmental managers have access to the broad gamut of task delivery options that exist in the market today.
- Defining work packages in a smarter way – As we’ve mentioned previously in this article, Total Talent Management has to be seen as part of the solution to equipping organizations with all of the sensible choices of work delivery that exist today, framed by well-designed work packages.
- Creating a tailored triage engine that provides outcome recommendations – Core to any effective work-fulfilment engine is a thoughtfully designed triage approach, that today probably includes AI-enabled technology to sift through the available packaging options
- Bringing access to relevant work sourcing options – Unless departmental managers have access to all of the various instruments to fulfil work, they can’t use them!
- The role of Technology Ecosystems – Total Talent Management Portals (like Simplify Portal) have a major role to play in equipping organizations with the technology ecosystem they need to reach all of the desirable work sourcing resources to fulfil work in the most cost effective way on-demand. In addition, they help organizations to adapt their attitudes, behaviors and processes to embrace new organisational designs and smarter ways of getting work done.