Understand What Drives the Gig Economy & Transform Your Talent Acquisition Strategy
The gig economy continues to transform the very face of the modern workforce, effecting changes at a pace many organizations struggle to match. Talent acquisition strategies that were considered best practices as little as five years ago are widely regarded as obsolete today. Yet, with changes happening at such a blinding pace, it can be difficult for a workforce management professional to remain abreast of the latest and greatest strategies. However, once one comes to understand the drivers behind the explosive growth of the gig economy, it becomes much easier to formulate a talent acquisition strategy effective in this emerging environment.
So what is driving the wholesale shift amongst American workers from favoring full time, permanent jobs to embracing gigs where they’re employed to perform a particular task (or set of tasks) for a defined period of time? What’s behind the predictions (from a recent study performed by Intuit) that a full 40% of Americans will be independent contractors by the year 2020?
There are a number of forces at work here, pushing workers away from traditional workplace roles and toward a more gig-positive posture. To a very large extent, this trend is a logical outgrowth of the digital age which leverages technology to field a much more mobile workforce able to perform their duties from anywhere there is an internet connection. This digital tether helps deliver many of the quality of life benefits workers tend to gravitate towards; things such as greater control and autonomy over work locations and working hours, better work/life balance and schedule flexibility and others. Add to this mix the rising frequency of layoffs of full time workers and the transferability of 401(k) plans and the allure of being your own boss grows stronger.
Moreover, millennial generation workers (who are fast becoming the largest workforce demographic) have never known a job market without a gig economy element. Unlike their Boomer and Gen X counterparts, they have never adhered to expectations of swearing loyalty to one employer. The gig economy for this soon-to-be largest segment of the American workforce is just “the economy”.
Understanding these drivers and how they will continue to impact on contemporary workforce design and management will be crucial to success in this rapidly evolving environment. Here’s what your organization can do to prepare with this knowledge.
Transform your talent acquisition strategy to align to new reality by “flattening” your organization. Titles and structure are growing less impressive to the talent you’ll be interviewing. Instead, focus on putting people first, not job roles or corporate structure. Create opportunities for constant feedback. For better or worse, Millennials thrive upon hearing feedback on how they are performing, what experiences they should be learning from and how to sharpen their skills. This is especially true if the feedback is delivered by respected leaders or highly respected consultants in specialized areas of focus.
Review job functions and roles and determine what percentage of contingent labor represents the “right mix” for your organization, with the goal of lowering your benefit and even office space costs. Typically, the right mix of contingent labor is between 15% and 30% of the overall workforce, with some organizations going as high as 40%. With this in mind, it is important to establish a contingent workforce program with the requisite guidelines and policies ensuring:
- Partnership with the correct staffing suppliers
- Cost containment strategies
- Visibility to entire workforce for continued workforce planning strategy
- Risk mitigation and compliance to any independent contractor laws
Recruit resources to staff by project instead of to accommodate ongoing needs. When interviewing candidates determine if they are open to temporary positions as well as full time roles. You may gain increased access to top talent by engaging them in short-term gigs and then creating opportunities to gain knowledge from them. Lastly, build talent pools! Partner with an Employer or Record firm to take on the payroll of these candidates at lower mark ups than recruited contingent workers.
Do all these things and make the gig economy work for your organization instead of being subject to the winds of change.