It’s a big topic of conversation: the gig economy. We at Staffing Industry Analysts are dedicating an entire industry conference in September to focus on it: “Collaboration in the Gig Economy.” Some companies in the space are household names — Uber, Airbnb etc. Others are start-ups fighting to keep afloat. But what is this economy people claim is revolutionizing the world of work?
Defined. One of my colleagues describes the gig economy in the most layman of terms: The typical gig economy worker will have six to eight “gigs” going at ONE time. These gigs will vary, but most are considered peer-to-peer transactions and appear in various forms — from ride sharing, errand running to software development and consulting. What is prompting this change? The rise of applications/digital platforms — many of which do not require considerable background checks or access gates — that enable an individual to sign up easily is one main reason. Peer-to-peer arrangements aren’t brand new in the economy, but the digitized, broad-based access to these labor engagements allows further potential transformation of current norms in getting work done at the right time, right place and right price.
Also contributing to the rise of the gig economy is the attractiveness of controlling one’s own schedule and earnings potential. When I just started working, I was hourly and my schedule changed every week. My employer dictated when I would work, and thus what my earning potential was going to be for that week. Many Gig-E work engagements put the control in the worker’s hands.
Size. Just how big is the gig economy? Time magazine, Burson-Marsteller and Aspen Institute Future of Work Initiative conducted a first-of-its-kind poll and found that 44% of US adults have participated in such transactions (gigs) which equates to more than 90 million people. Although I would guess most of these transactions are not what we would deem the normal “contingent labor program resource,” it is definitely affecting the way work can be done — and when it will be done.
For the contingent workforce program, the increased utilization of the human cloud, online staffing and freelancer management systems and an increase in the number of workers wanting to be an independent contractor, there will be a new challenge and opportunity for program managers and organizations to access top, contingent talent. Think of an independent contractor program potentially on steroids, driven by enterprising engagement managers who use these same type of resource engagements harmlessly for their personal labor requirements. A great deal of professional workers don’t give a second thought about using Uber. These same engagement managers are being orientated now to successfully engage and leverage Gig-E transactions to get work done!
Effect on the CW program. Can an organization afford to not consider this new independent contractor (IC) worker type? For years, due to the focus from state and federal governments on the misclassification of independent contractors, many buyer organizations have either decreased or flat out stop utilizing them. However, with the mindset of the “gig” worker and today’s engagement managers, that approach will need to be revisited. Engaging an IC compliance partner or implementing a proper vetting process can help with the misclassification piece. Where it might become more challenging is that, instead of having one resource working eight hours day/five days a week, based on their other “gigs” they may not be able to provide a set schedule they will be available. This will require some additional project management skills and defined contractual language to ensure that the engagement delivery dates will be met.
It may take a while for the gig economy worker relationship to become part of your CW strategy, but you cannot ignore it. For starters, focus on understanding the drivers for the gig-economy, how this may affect your program and your organization, and better yet, having dialogue now with key stakeholders to create a plan. If and when this does present itself in your organization, you need to be ready and able to engage/manage Gig-E transactions of the top talent you want and need.