GIG Economy: How it shifts the entire HR industry and multinationals’ HR strategies
In 1999, a 9-to-5 job was the norm. One couldn’t imagine that in a few decades 34% of the entire global workforce would be “gig” workers. The “gig economy” is determined as a subset of the sharing economy. The McKinsey Global Institute defines the “gig economy” as contracted contingent work transacted in the digital marketplace and managed by an online talent platform.This definition doesn’t cover ongoing part-time employment and freelance work that is not contracted through an online talent platform. As it stands, 150 million workers in Western Europe and North America are employed as independent contractors. Thanks to the numerous technological platforms that allow remote collaboration in tasks, the “gig economy” is a rising trend. Creating a workplace where people work for themselves either in one or many places, trading their services either part-time or full-time, the “gig economy” is no longer an imagined reality but a way of life for millions of skilled workers across the globe.
However, there are both complexities and advantages involved with both parties transacting in the “gig economy”. For employers, it gives an opportunity to source for employees globally, transcending skill limits that may exist in a local geographical area, with lowered costs, and flexible scalability. Likewise, the downside is the unreliability of employees. For employees, it creates opportunities for career independence, flexibility, and control of their development, with a wider variety of work options. On the flipside, the tradeoff is regular employment benefits and job-security related stress given the competitive and unpredictable nature of “gig”.
It is certain that outsourcing, crowdsourcing, and freelancing trends are here to stay, so organizations must adapt to the demands of managing a diverse global workforce of “gig” employees. Re-strategizing policies to optimize the “gig economy” is key to hire, retain, and manage a global workforce. The HR industry is experiencing a learning curve on re-developing incentive programs as well as training and development programs for contingent workers.
Entire HR industries are re-adjusting not only to expanding physical offices across the globe and increasingly diverse workforces; but also, to a technologically disrupted workforce, adding its own dimension. Contingents are becoming a priority for organizations’ HR strategies, and the relationship between the two is an aspect HR research is exploring. Soon, countries are going to draft legislation outlining regulations for contingent employment, and HR must devise plans to operate within stipulated frameworks to become a global employer.