The workforce solutions ecosystem has slowly evolved over the past two decades. With the use of a VMS technology and a focused operational team — either internal or external — large enterprise organizations have a gained visibility into most, if not all, of all their non-FTE workforce. However, over the past few years the usage of gig workers has increased significantly, leaving many buyer organizations back in the dark in terms of their usage of these types of workers and their associated transactions.
Despite the reintroduction of headaches thought to have been left behind, gig workers do provide significant benefits to the ecosystem and contingent workforce program managers would do better looking for ways to oversee their use than limit them.
SIA estimates that, in 2020, there were 52 million contingent workers in the US, representing 35% of all workers, generating $1.3 trillion in revenue, $722 billion from B2B transactions — the more relevant portion for our readership — and $615 billion from individual consumers (B2C).
Meanwhile, we estimate the global market size for contingent workers sourced through staffing firms was $415 billion in 2020.
Ease of Use
If you have ever utilized a gig worker — most of you have ridden in an Uber or Lyft or ordered dinner through DoorDash — you know how easy their associated technologies make it to utilize a resource. These companies, as well as Upwork, Freelancer and Fiverr, along with a handful of other organizations, enable people to engage with a resource directly for a service or a project. Business units within buyer organizations have also realized the power of engaging an individual via a web-based platform technology easily by simply leveraging a company credit card — so easily that it is scary to leaders of structured, centralized contingent workforce programs. The challenge and concern is the difficulty to have visibility and control to ensure company policies are adhered to and against.
The talent platform model also enables specific hirers and freelance workers to enter into, complete and transact work arrangements through a website or other digital platform such as a smartphone. It is essentially recruiterless staffing, with the entirety of the transaction, including remuneration, facilitated online via a two-sided marketplace of workers and hirers. The talent platform takes no responsibility for the workers’ tax or social insurance obligations.
These platforms enable buyers to execute work getting done by working directly with a gig worker with the necessary skills and abilities. Imagine the QECR elements of contingent workforce management — quality, efficiency, cost and risk — at play when an engagement manager procures talent on a gig platform. Managers are full control of the experience, from selecting skills required to setting the budget and defining deliverables based on milestones. The average time it takes for a manager to hire a gig worker is three days. Another benefit is being able to source without geographical limitations.
Of course, the manager takes on the burden of sifting through myriad applicants, which can be daunting, and the CW program loses any established controls it may have developed over project development and scope management, exposing the program to potential hidden costs and additional risk.
Benefits to the Talent
However, the gig worker enjoys incredible freedom on these platforms. A gig worker can have a full-time job and make extra money on the side while feeding their love for a skill they might not get to use at that job. For example: A marketing professional for a Fortune 2000 company has a passion for illustrating children’s books. They can find work in the evenings or weekends using their skills on small projects to nourish their creative needs. They can select the project and agree to the timing and price by working directly with the decision-maker.
The reality of the gig economy is real and the entire ecosystem stands to gain from it. Centralized buyer CW programs will need to find a way to engage the gig economy workers to support the managers and talents needs while serving the overall needs of the organization to take advantage of the QECR elements these gig platforms offer. The growth of individuals who want to do gig work is not going to shrink, it will only continue to grow.