The phrase "gig economy" refers to the growing trend of hiring talented freelancing or otherwise independent employees on a project-by-project basis. The availability of these types of gig workers has radically altered the global work culture in recent years.
Drivers with Uber and Lyft are great examples. The work is done on a ride-by-ride (gig-by-gig) basis, with no predetermined schedule. You could either hop into an Uber or a Lyft vehicle in the early days of the rideshare industry. However, today's drivers frequently work for both organizations at the same time. Workers are frequently hired by direct competitors at the same time, which is a regular occurrence in the gig economy. Remote skill sets are widely available, allowing labor to be scaled up or down as needed and people to be employed from nearly anywhere.
Previously, a person would work for a single employer at a time, and possibly for their entire career. There was a lot of loyalty and long-term commitment. A contractor or full-time employee, on the other hand, may only stay at a company for 18 months before moving on to other chances. Or, even better, even less time. According to IBM's Institute for Business Value's 2021 report, one out of every four workers wants to change jobs this year, up from one out of every five a year ago. More than half of last year's career changers identified as millennials or Gen Z.
How will these trends impact organizations?
To date, corporations have required the commitment of a fixed 9-5 employee by owning that individual's skill and employing it in the manner that they deem appropriate. Employees' visions, when matched with the organizations, help produce better results and foster long-term partnerships.
In exchange, the companies assist employees in furthering their careers, providing health and lifestyle benefits and allowing paid time off. However, the notion that a job is secure for the rest of one's life is no longer valid. While the transitioning generation, which lived from 1990 to 2010, accepted this reality, the next generation is refusing to commit due to employment uncertainty.
To keep permanent employees, firms will need to adapt to a more flexible and modern workforce culture as millennials' collective mindset evolves. The Gig Economy will have an impact on future recruiting, as gig workers choose flexible work schedules, output-oriented projects, self-managed leadership, and personal improvement at the end of each project. To bring both the business and the professional into compliance with these preferences, certain changes will be required.
Workers in the gig economy don't normally work in offices. They may work from home, a cafe, a co-working place, or even while on the road. This is the perk that appeals to the younger generation more than the elder generation. While some employees value physical presence at work, managers will need to discover remote control methods for gig workers.
The detachment from providing paid leaves, entertaining health and personal benefits, and other permanent employee privileges is one of the benefits to organizations. While gig workers typically charge more for projects, the cost of project base expenses can benefit the company in the long run. Taking hold of this benefit, several businesses are already constructing mutual benefits for gig workers to attract higher-quality workers more quickly.
How can HR comply with the gig economy?
HR will play a critical role in establishing how the organization benefits from the Gig Economy by considering policies, systems, and processes. Organizations can increase their performance while reaping many benefits by designing temporary employment methods that attract gig employees.
Having a large permanent workforce is becoming increasingly difficult. HR will need to streamline the concept of 'employee first' to attract individuals who are still adhering to the previous set of employee regulations.
Maintaining a high-quality talent pool will eventually necessitate HR ensuring a favorable working environment for both permanent and temporary employees. The majority of individuals who work full-time now have one or more side jobs. If the work environment is not conducive to maintaining a sense of balance in their lives, they may be forced to become full-time gig workers sooner rather than later.
To date, the majority of firms have prioritized business growth. However, in an era where professionals want synergistic growth with the company as a motivation to join, the business's perspective must fast shift. A company that promotes, favors, rewards, and increments to its employees as much as it does to its own will have a better talent pool in-house.
The Gig Economy, which is mostly reliant on technology, has an impact on future hiring as businesses become more accessible via mobile phones, contracts, interviews, hiring, deliverables, and even payments become easier. HR must become tech-savvy to properly enroll gig workers in your initiatives. This will undoubtedly increase the workload for HR departments, but it may also be useful.
Automation is one factor that can help HR professionals manage their workload more efficiently while maintaining high quality and on-time delivery. OCR and other internet tools can also help speed up the process while lowering the amount of documentation required.
HR professionals will have more time to effectively manage the Gig Economy's new workforce. It will not only provide HR managers more breathing room, but it will also allow CEOs to better manage duties in terms of quality, quantity, and timeliness.
How far is a full-fledged gig economy?
The Gig Economy is now in its early stages. The industrial revolution compelled the world's people to seek permanent and consistent income through employment. Before it, contract-based labor was plentiful all over the world. The commitment and regularity of lifetime income were the key reasons for people showing up for regular work.
However, the current generation, while still working full-time, is quickly picking up on the temporary job notion. The Gig Economy is separated into distinct segments in the shape of an hourglass. While skill-based jobs such as technological development, creative chores, marketing, and advertising are at the top of the list, the opposite side is geared toward people who are just seeking a way to make money. Delivery employees, aggregators, sales executives, and even rental drivers are all examples. Uber is the best example of this, as the bulk of its employees are employed on a contract basis. All that is required is a valid driver's license and a vehicle to work for such businesses.
While this may appear to be beneficial to the lower end of the workforce, it also has its drawbacks and risks. The first bottleneck is a lack of permanent employment benefits such as consistency and safety. While a cab driver can earn more than a regular employee by obtaining 6-7 client rides, he or she can also be stranded for the entire day without getting even one. In terms of gig projects, the same dangers apply to all types of work.
Taking all of this into account, the Gig Economy still has a few years to refine itself.
Technology and management rules must be effectively integrated with business policies before contract-based work may become the new normal. HR and its hiring innovation are one of the most important factors in keeping a seamless workforce balance between permanent and contract workers.
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