How to make the gig economy work for HR

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There are some seismic and much debated changes going on in the way people want to work.

Seismic is undoubtedly a big word but the evidence is compelling. For instance, it is predicted that by 2027 there’ll be more contingent workers than permanent in the US workforce. In the UK, 1.2million workspaces per annum are now provided by co-working businesses offering flexible outsourced premises – a market that is growing at 41% per annum. 

Mirroring that, TfL has recently revised down its revenue expectations this year by £240m owing to a reduction in passenger numbers that is, in part, attributed to changing work habits and less commuting to offices

So, there’s a big wave of change underway that shows no signs of slowing and these changing work habits are going to have an almighty effect and influence on the way businesses and HR organisations operate in this gigster environment. 

HR leaders will have some rethinking to do in order to ensure they can ride that wave rather than flounder in it.

Rethink fundamentals

If your business was 50% service providers and 50% employees, do you need that much focus on job descriptions, job families, performance frameworks, remuneration structures? 

Or do you need more expertise and focus in the creation and management of service delivery contracts and performance-based SLAs/KPIs that link to business output?  Performance that HR can own and show ROI as an HR success metric?

Rethink metrics

Norms for salaries, attrition, L&D spend per head and so on will likely change. Flexible worker charges will be higher than “supposedly equivalent” perm salaries. Attrition rates will rocket because two-year tenures will be considered high not low.  If you’re engaging more skilled, flexible contract talent, you’ll potentially need less L&D budget.

Will you be measured on number, speed and cost of hires or blend, speed, utilisation percentage and ROI of hires?  Start to think about different benchmarks for success.

Rethink "this is how a business operates" norms

Do you need your own office space?  If not, think of all the things you also don’t need – some functions would likely disappear.  If you increase your percentage of flexible worker but maintain today’s pension contributors per head, what does that do to your pension fund whilst maintaining (even improving) business output and profitability?

Can you reduce benefits programme costs in the same way?  Maybe now is the time to think about how changing work habits could impact wider business issues and offer opportunity for HR to be a positive strategic change driver.

Rethink value proposition

Learning, flexibility, gaining experiences, delivering value and using that proven value to sell to other potential buyers – flexible workers often look at work differently.  Flexible workers want a positive public rating on TrustPilot they can use to generate sales.

Employees want a positive private performance appraisal rating they can use to defend a salary increase request.

Think about how you’d manage that shift in focus and how you can create a value proposition that encourages both sets of values to thrive in your organisation.

Rethink connectivity

Technology that enables remote connectivity, task management, output management, team engagement et al will all be important in the decentralised businesses of the future.

Think about how you’d manage your team’s delivery if they had a mobile and laptop and no office?  And how to scale up to the enterprise level?

Rethink engagement

Peer to peer partnerships, not master servant employment relationships will become more prevalent.  Businesses will need to change mindset about “their people” who will no longer be so.

Companies that treat service providers like employees will fail to grasp the opportunity and more than likely end up falling foul of legislators.

Think about how your organisation can pivot its thinking towards people engagement based on output value provided to the organisation by the talent as opposed to input value provided by the organisation to the employee

Rethink control

If someone else owns flexible talent acquisition, how will you either protect yourself or benefit from the seismic changes happening? If your function is responsible for less than 50% of talent acquisition and, therefore, you’re not thinking about the above, someone else will have to. Take control. Human Resources – the clue is in the name.

Contractors, freelancers and interims are all human and are all resources and, potentially, the key human resources of businesses in the future.  If you don’t own even just their acquisition and engagement, and they are more than half the talent in the business, think about the potential negative implications for HR and its future.

Plenty of people and organisations will dismiss the wave because they believe it’s too different to what we see today.  They see barriers more clearly than benefits.  To those for whom Uber, Facebook, LinkedIn, Apple et al have made their lives unrecognisable to their parents, I’d encourage you think again. 

McKinsey estimate that 20% of UK jobs (c6.4m people) will be replaceable by automation by 2030 – just 12 years away.  Think that’s impossible?  In 2004 Facebook didn’t exist and yet today 2.2 billion people log on each month to a technology product that hadn’t been conceived when my 14-year-old son was. 

Pivoting a business to engage individual service providers as opposed to individual employees could deliver what HR leaders want – an opportunity to proactively bring to the table fundamental, strategic change programmes that create great value to a business.

But you will probably have to be that change yourself. Otherwise someone else will do all the thinking for you, hand you their plan and you’ll do the executing. And that’s not worthy of a seat at the top table.

About Mark Lee

Mark Lee, CEO, ContractElite

Recruiting leader of more years than I care to think about.  Love surprising the people who say it can't be done.  Hate status quo (the state and the band....).  Learnt my trade at Reed, honed it at Korn/Ferry, now building my own people focused business.  Because never a truer word spoken when said that people do make the difference.

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