Rather than feel threatened by the gig economy, HR should tap into the opportunities it offers for harnessing talent and competitive advantage, says Acuity Coaching’s Simon Coops.
The gig economy has been heralded by a host of emerging online platforms that give access to work opportunities to freelance individuals and contractors.
Gig economy resources
Typical players include Lyft and Uber – essentially technology companies that have disrupted the traditional market by offering an improved service at lower cost – much to the disapproval of taxi drivers.
It also encompasses organisations such as Airbnb, which enables property owners to rent their property direct to the public – creating a new source of income for them and a rival to traditional accommodation.
These innovations have created value and shaken up well-established service sectors largely to the benefit of consumers.
But is there something for the HR profession to learn here? Could some of this disruption and creativity be brought to bear on what we are being asked to deliver?
Threats and opportunities
The short answer is yes – despite claims that the gig economy is prospering at the moment because of lack of regulation and poor governance, there are signs that there are both threats and opportunities for HR and the organisations they serve.
The main threat is the disruption that comes from existing or new competitors tapping into the gig economy first; the opportunity is to beat them to it.
The good news is that not everything about the gig economy is new. Chances are you are already tapping into it with contract workers at various levels – just as traditional taxi firms tended to use self-employed drivers.
The disruption, however, comes from a combination of:
- an organisational structure tailored to make the most out of the available resource;
- a proposition to the market that attracts and retains the right people;
- a different route to market for the skills you require; or
- the means to track and evaluate how individuals are used.
The existing ways employers exploit the gig economy are mostly tactical. They are a means to an end, and will not create competitive advantage because they only solve short-term problems and enable suppliers to take advantage of an unforeseen or unusual need.
Suppliers, meanwhile, take advantage of this by charging a hefty premium. At their worst, contractor workforces create discord and tension, because their lack of commitment and selfish behaviour are completely at odds with most corporate cultures.
Using gig economy workers properly creates a more flexible workforce and can:
- bring real expertise to bear in strategically important areas;
- enable downsized departments to function more effectively by flexing their resource levels;
- promote agility and creativity by bringing in exposure to individuals with different experiences;
- improve retention of key skills and experience by offering employment on an as needs basis;
- increase the number of ways talented people can engage with the organisation over their whole career; and
- benefit the organisation’s diversity goals by offering another flexible employment option.
Some more forward-thinking organisations are already launching channels to directly interact with the gig economy.
PwC has launched “Talent Exchange”, an online platform that directly connects independent professionals with PwC teams, for example. Freelancers register, upload their CVs, then apply to work on the firm’s client projects.
Having access to known talent at short notice on a pay as you go basis at a reasonable price should really be a no-brainer.
Other organisations have been marshalling the resources of the gig economy for years – here at Acuity Coaching we build and manage executive coaching and mentoring faculties for multinational companies, staffed almost entirely by individuals who left corporate life for a portfolio career.
This is proof that this type of resourcing can work, but how HR departments go about building resourcing solutions that use the enormous resources available remains a big issue.
Thoughts inevitably turn to technology as the first port of call – take PwC’s platform as an example. There are also those who think that getting leaders to change their hiring habits and adopt alternative approaches cannot be achieved solely through technology.
Once the concept is proven and accepted, however, technology can give access to leaders to the available talent and facilitate the hiring process.
Technology on its own it will not work unless it has been proven as a valuable channel to market. Just stuffing a database with individuals who would be interested in working on a slightly different basis is not enough.
Define the process
The answer probably lies in taking a recruitment project type approach where:
- leaders are canvassed for areas where they struggle to find resource, keen to find an alternative source and gain their commitment to try something new;
- a good specification for what a good candidate would look like is developed;
- an employment proposition is developed to communicate to the target audience which is attractive and deliverable;
- there is a screening process to select the best people;
- leaders are prompted on a regular basis to consider using the new resource; and
- there is a careful assessment of the performance of the individual and detailed feedback gained.
Once there is a track record, the information on the skills and performance can be made available online.
What will stop this happening is that it requires a big investment up front to deliver such a programme, and arguably there is no way that HR departments will be able to find the time to deliver something speculative.
My own belief is that there will be a different type of supplier who will offer to deliver that whole process with no up-front cost, managing the whole service on a pay-as-you-go basis.
There is no doubt that new competitors in most markets will fuel their growth by making the best of the gig economy. Established organisations will need to make sure they don’t get left behind.