According to McKinsey, about 20-30% of the workforce in developed markets is part of the gig work culture. In India, about two million or approximately eight percent of the formalized workers are working on project-basis. It’ clear that the gig economy is growing across the globe, including India. On the one hand, employees enjoy the flexibility that the gig economy offers. On the other, companies are increasingly embracing a flexible workforce as it helps them achieve cost-effectiveness and agility.
While businesses and millennial employees both favor this growing trend, it creates certain challenges for organizations. Companies need to fully adapt to this trend in order to use it to their advantage. Here are few processes that are likely to be impacted by the gig economy.
In a survey of 500 plus organizations, over one-third said they expect to tap into flexible hiring for 50% of their needs in the next five years. With contingent hiring replacing traditional hiring in many areas, HR needs to be updated on the legal and financial implications of flex hiring as contractual jobs are subject to a different legal framework. A flex model requires also HR to focus more on ‘talent’ rather than job roles to ensure superior employee job fit, which means they have to approach recruitment more like a sales function.
With most contingent roles providing the flexibility of working offsite, organizations often have to conduct their on-boarding process virtually. This means companies will have to invest in simple processes where new employees/contractors can be introduced to the company and its workflow. Big-time gig employers such as Uber and Airbnb tend to on-board and train their employees on-the-go - through apps, webinars, etc.
Companies are gradually shifting to more frequent performance appraisals in the gig economy. Yearly appraisals are already becoming passé, with half-yearly, quarterly, or even monthly appraisals taking their place. Real-time performance evaluation is also gradually becoming popular. Cisco, for instance, has done away with its annual appraisal system and has brought in a weekly evaluation system. Other companies such as Deloitte have also moved to a project-basis evaluation system considering the rise in the number of flex employees.
Learning and Development
As organizations aim to increase productivity and reduce costs through flex talent, automation will play a key role in the end-to-end process of hiring and talent development. According to Gartner, Artificial Intelligence (AI), Virtual Reality and Augmented Reality (VR & AR) are going to be a part of most new product innovation by 2020. This rapid advancement in technology calls for significant changes in workforce talent as well as knowledge management by organizations. This requires continual focus on talent upskilling through training and development models that are designed to keep the workforce abreast with the changes in the industry.
Finally, it’s important to rewire the entire business perspective to deal with the impact of a gig economy - not only on the company’s culture but also on the society. Everything from internal culture to external business practices must be reframed to not only accommodate but also take advantage of the benefits of flex employment.