As we enter the new age of work, the gig economy is a rapidly growing trend. The growth of the gig economy is even more apparent on the onset of COVID-19, with the number of global gig workers expected to rise from 43 million to 78 million in 2023. This shift will have major implications for the modern workforce as well as HR professionals, who are now tasked with assimilating and managing these gig workers into their existing workforce.
What is the gig economy?
A gig economy, as defined by Investopedia, is a labour market that relies on temporary and part-time positions filled by independent contractors, freelancers, project-based workers, temporary hires and part-time workers instead of full-time employees. These workers are termed as “gig workers”. They can be found in every industry. These gig workers are often hired on a formal agreement to provide services to the organisation without officially being on the payroll.
Gig workers are here to stay. What are the implications for HR?
The proliferation of gig workers means that the role of HR will also evolve. HR will have to find tools to effectively manage the talent lifecycle across both contingent and full-time employees as well as optimise organisational structures and operations.
Here are some implications of the gig economy on HR management:
Redefinition of job roles
With the arrival of the gig economy, this means that business leaders and HR have rethink about the definition of job roles. While gig workers may not necessarily fill the whole role of a retail assistant or caregiver, there are opportunities for tasks to be shared in order to be more efficient and quick. Job roles need not also be confined to a physical location as tasks can now be outsourced to talents regardless of geographical location. In fact, half of freelance workers globally provide skilled work such as computer programming, counselling, information technology work or marketing.
HR will have to prepare for and embrace the gig economy by redefining and redesigning roles. To start, identify roles within the organisation that can be restructured to fit the gig economy. Consider what tasks or services can be completed by freelancers or contract workers. This ensures that HR is prepared when someone decides to leave the organisation or when the organisation decides to scale up and needs additional manpower.
Incorporating gig worker data into HR systems
Given that gig workers are unlikely to be on the organisation’s HR management systems, measuring their work progress, key performance indicators (KPIs) or performance will be challenging. To determine the impact of gig workers on the organisation’s operational efficiencies or profits, it is crucial to integrate gig worker data into the organisation’s HR systems. This helps HR and business leaders to track gig workers’ work progress, determine accurate compensation, and identify talent and growth opportunities with these gig workers.
To get started, look for HR analytics tools that are able to track and monitor gig workers. This may include tracking hourly performance metrics, monitoring gig workers’ schedules and automating pay calculations. With freelancers today viewing gig work as a long-term career choice, leveraging on an integrated HR platform to manage the blended workforce (gig workers and full-time employees) can be highly effective in monitoring business impact, improving talent lifecycle, and even succession planning.
Revising labour policies to include gig workers
Labour laws and HR policies have traditionally only covered full-time workers. This is understandable. After all, determining appropriate benefits entitlements or amount of protection coverage that a gig worker should receive is an arduous task. Should you prorate based on the number of working hours? What benefits that a full-time employee is entitled to should be offered to a gig worker? Yet, this divide means that gig workers and contractors are not protected in terms of compensation and benefits under the eye of the law or the organisation. They also may not receive the same level of benefits such as annual leaves, medical compensation or even work injury compensation as full-time employees.
In managing this blended workforce going forward, HR needs to create inclusive policies that integrate both full-time employees and gig workers. In fact, some countries such as Singapore have already introduced new job protections for gig workers, which include mandatory employee contributions to workers’ central provident funds and entitlement to injury compensation. With gig workers here to stay, HR can take the lead in creating policies that offer proper compensation, rights and protection to these workers.
Run a pilot test to incorporate gig workers
The use of flexible workers will only increase in the coming years, particularly in large corporations. When your organisation is ready to incorporate gig workers as part of your labour force, it is critical to involve the rest of your workforce. Start by running a pilot programme to help teams, business leaders and employees understand the optimum structure, policies and workflows that work best with full-time employees and gig workers. Review the structures and policies periodically to ensure compliance with industry regulations as well as organisation standards.
Managing a blended workforce that involves both full-time employees and gig workers is not easy. It requires HR to have in-depth understanding of the needs and aspirations of gig workers and be able to weave that into existing HR policies and processes. Thankfully, there are many tools and resources available to help HR revamp and streamline internal processes to manage and deal with the paperwork, compensation and benefits, and compliance in onboarding gig workers. Talent management and productivity tools can also help the organisation prepare for success by fostering an inclusive community between full-time employees and gig workers that keeps them engaged, collaborative and motivated.
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