In a survey of more than 700 global human-capital leaders, 61% indicated their businesses expect to transfer a significant portion of permanent positions to contingent roles. To be more agile and flexible in a changing economy, they plan to replace up to 30% of their permanent positions with freelancers, gig workers and independent contractors. And they plan to do it in the next 12 months.
Organizations that best manage their temporary workforces — from talent acquisition to onboarding, upskilling and timekeeping — are the ones that will thrive in the gig economy.
The job market will be composed of freelancers who work multiple hourly jobs to build their living, taking work that ranges from dog walking to running errands for on-demand services, from driving Ubers to freelance writing.
For gig workers, the employment deal is 100% employee-centric: They work on their own schedule, they’re accountable for their own performance and development, and they avoid being stuck with an organization that’s not an ideal fit. Moreover, the barriers to entry are low; just about anyone can sell their skilled services at the click of a button to someone who wants to use them via online communities. The overlap between workers’ skills, the ease of sharing online and the transparency of reputation through online ratings and reviews has culminated in many new opportunities for people to work in a more fluid, on-demand way.
For organizations, the proposition of on-demand employees also has its appeal: It delivers a more flexible workforce that is there only when needed, minus the long-term responsibility and challenges that come with permanent employees. Keeping skills current becomes the employee’s responsibility, while organizations become the platform through which collective work is coordinated.
But there are many challenges, too, in managing a gig workforce. Operationally speaking, employers need to consider hurdles around recruiting, timekeeping and people management, among other issues. But hiring managers and their organizations can find a balance between affording gig workers the flexibility and control they crave while, at the same time, integrating them into the company culture. This enables managers to hire and retain the best talent while improving collaboration, morale and commitment.
The talent gap is widening and will create greater challenges in the near future, according to 69% of respondents to a Randstad Sourceright survey. Another 25% of respondents said they consider talent scarcity to be their greatest concern.
Finding, attracting and retaining the best talent is a major challenge considering that many gig workers view jobs as inherently transient and their relationship with companies entirely transactional. Hiring and retaining the best employees will become even more difficult as the gig economy grows at its projected pace, giving rise to increased overall churn in the hourly workforce.
In competing for gig talent, company culture can be as important as the job description itself. Even if the job is temporary by definition, gig workers tend to be selective and place a premium on the work environment.
Conveying company culture is key to attracting the right type of talent. From a business process standpoint, when selecting an automated talent candidate acquisition platform, consider the following:
- Make it easy for job seekers to apply for open positions from their social profile.
- Create and share jobs across leading job boards and social networks in just a few clicks.
- Sort, classify and rate candidates and tag applications for easy review.
- Capture prescreening responses, assessment results, certifications and interview notes in the candidate profile.
- Quickly determine a candidate’s fit by launching video interviews that can be shared with other hiring managers.
The goal is to sustain a warm pipeline of qualified candidates, giving the hiring manager the ability to quickly and efficiently fill positions while retaining the ability to be selective.
In a gig economy, the sheer number of workers needing to be processed, situated and acclimated makes high-volume onboarding a real challenge. Temporary employees are expected to hit the ground running, but it’s not usually that simple. And with the volume of new hires needing to be entered into the system and oriented, any small inefficiencies in onboarding can become costly.
Considering that the typical contingent worker is with the company from three months to a year, any time devoted to on-boarding becomes a disproportionately large chunk of time that could be spent allowing them to do what they were hired to do.
Automating onboarding dramatically reduces the time it takes to collect employee data while improving accuracy and efficiency. With employee-onboarding software, a hiring manager can have a complete set of digital and online forms combined with electronic signature functionality that easily converts applicants to new-hire records, all while ensuring accurate tax reporting and I-9 compliance. Through this software, the hiring manager also can prepare new hires from day one by incorporating tasks and activities into the onboarding process. Employee onboarding software should come with customized workflows and tracking so the hiring manager can see when new hires complete required training, review orientation documents, sign policies and much more.
While it’s vital that onboarding shortens the time it takes to get each new hire up and running, it also is important to make it as frictionless and positive as possible. Onboarding sets the tone for the rest of the gig and promotes overall job satisfaction. Also, bear in mind that if you’re not welcoming gig workers into your culture through standardized integration and onboarding, you’re communicating that they’re replaceable.
The process of improving workers’ skills, recent surveys indicate that more employers are increasing their budget to invest in upskilling to help their contingent workforce advance their careers. Although gig workers are hired on a temporary basis, more employers are realizing the value in cultivating the best among them for full-time positions within the organization. If necessary, gig workers can be retained to fill specific positions, reducing costs of hiring new people when the need is short-term.
One way to identify top performers and create an upskilling plan is through a performance management system, which can help automate performance appraisals and reviews. Managers can identify top performers and, as importantly, engage, challenge and inspire workers via ongoing coaching and feedback, goal setting and employee development.
Time Tracking and Compliance
Efficient and accurate time tracking arguably is the most critical function in managing contingent workers. It’s also the most challenging because a manager must effectively manage compliance and labor details (e.g., overtime, paid time off, pay rates) at all locations.
Contingent workers can be widely dispersed, receive alternate benefits plans, have their own specific category classifications and be taxed differently. Additionally, not all gig workers work the same way; some show up to the worksite while others work remotely, usually as part of the same overall contingent workforce, and all of this further complicates management challenges.
A user-friendly time-tracking system can reduce exposure to false workers’ compensation claims and wage and hour lawsuits. Built-in compliance safeguards provide a variety of benefits, including flagging violations, delivering meal or break compliance alerts, factoring in federal and state wage and hour rules, and accurately reflecting union contracts.
The Future of the Gig Economy
There are benefits for businesses to hire gig workers: They’re often less expensive in terms of salary and benefits, and businesses can flex their workforce to meet identify and demand top performers who have the potential to be developed and cultivated for full-time positions. This allows employers to avoid incurring additional recruitment costs and sinking training and benefits costs into workers who potentially won’t stay or aren’t a good match for the company. Furthermore, because the company employs these workers only when they’re needed, there are fewer costs associated with a labor surplus.
But the recruitment, timekeeping, bookkeeping and people-management requirements for effectively supplying and sustaining a temporary workforce pose steep organizational challenges. Add in fluctuating client demand and high turnover, and it becomes a major undertaking. The underlying backend technology can address the many moving parts that go into managing a contingent workforce, but it’s more than just improving efficiencies or cutting costs.
The system you have in place can — and should — be viewed as a strategic asset, allowing you to attract, hire, motivate and nurture temporary workers, which can have both an immediate and lasting effect on your organization.