Highlights
- The gig economy has started seeking global attention in the era of blurred digital boundaries.
- Any new concept adoption has a short timeline and a high clout.
- We will see gig implications on traditional HR, and possible preparedness for it.
On this page
On this pageinpage
Gig and its risks
The era of the new normal brought unprecedented changes in how we function at work. The need to focus on self and well-being became a priority for many employees, forcing enterprises to adopt newer working models that allow more flexibility. Owing to the blurred digital boundaries, the recurrence of the concept of the gig economy started seeking global attention. The gig economy, also known as the "freelance," "on-demand," or "sharing" economy, is a labor market characterized by temporary and flexible work arrangements. It involves individuals working as independent contractors, freelancers, or on a project-by-project basis, often through digital platforms and apps. Gig workers are not traditional employees; they have greater autonomy and are typically paid for specific tasks or services they provide. The working style of some cab service providers, where a driver is at will to accept/reject a service request, is a perfect example of a gig worker. A similar work pattern is predicted for the future across work domains.
Some are adopting gig work patterns across the globe owing to the accrued benefits of autonomy, availability of talent pool, optimal utilization of resources, and better work-life balance. If the platform economy expands substantially in the future, the risks associated with such short-term gigs would also threaten the overall work culture, such as long working hours, lack of legal protection, brittle occupational safety and health (OSH) policies, and so on.
Let us look at the implications of the gig economy on working style.
Implications
The gig economy can have several implications:
- Flexibility: In the gig economy, workers can choose when, where, and how they work, improving work-life balance.
- Challenges in job security: Gig workers may need more job security, stable income, and traditional employment benefits.
- Impact on traditional employment: Traditional employment models may evolve as more workers embrace gig work.
- Legal and regulatory complexities: There are challenges related to employment classification, tax compliance, and labor laws.
While this working model can have implications, the fact that we anticipate the gig economy's wider adoption is owing to its benefits both for the employees and the employers. Let's look at these benefits at large.
Enterprise benefits
Organizations can benefit from the gig economy in several ways:
- Cost savings: Hiring gig workers can be cost-effective as companies pay for specific tasks rather than traditional employee salaries and benefits.
- Access to specialized skills: Organizations can tap into a global talent pool and access specialized skills on demand.
- Scalability: Businesses can quickly scale up or down as per project necessities without long-term employment obligations.
- Innovation: Gig workers often bring fresh perspectives and expertise to projects.
Embracing gig
There's a growing number of global workforces engaged in this working style; the gig economy is likely to continue evolving:
- Expansion: It is expected to grow, with more workers and industries embracing gig work, such as the IT sector, other service sectors, and project-based organizations.
- Technological advancements: Technology will be central in shaping the gig economy's future.
- Regulation: Governments may introduce new rules to address labor and worker protection issues.
Policymaker's readiness
As HR policymakers, we must consider the following factors to remain prepared for this new working model.
- Recruitment and talent management: HR must devise policies to adapt, attract, and retain gig workers. This includes developing strategies to identify and engage with independent contributors.
- Legal and compliance issues: HR must navigate the legal complexities associated with gig work, such as classifying workers correctly, complying with labor laws, and managing the nuances of contracts and agreements.
- Benefits and compensation: HR must create flexible compensation structures to attract and retain gig workers. Traditional benefits such as health insurance and retirement plans may need to be reevaluated or adjusted to accommodate gig workers, who do not typically receive these benefits and provide them with a safety net.
- Onboarding and training: HR must design onboarding and training programs catering to gig workers' unique needs and schedules. This can involve online training modules and flexible orientation processes.
- Performance management: HR must develop new metrics and assessment methods for gig workers. Evaluating the performance of gig workers can be more challenging, as they may have a different level of oversight than traditional employees.
- Engagement and company culture: HR must maintain a sense of belonging and company culture among gig contributors who may not physically work in the office is crucial. HR must find ways to keep these contributors engaged and aligned with the company's values.
- Workforce planning: HR departments must become more agile in their workforce planning to accommodate the fluctuating needs of gig contributors. It would be necessary to understand when and where to source gig talent.
- Data and technology: HR must leverage technology and data analytics to manage gig workers efficiently, from hiring to payroll. This involves implementing a modern HRMS platform that can handle a more dynamic workforce.
- Communication and collaboration: HR must facilitate communication and collaboration between gig workers and full-time employees, often through digital platforms and tools.
- Risk management: HR must work to mitigate the risks associated with gig workers through their policies and security measures. Gig workers can introduce unique risks to a company, such as data security and intellectual property concerns.
- Regulatory frameworks: HR must develop or adopt labor laws and regulations to address the needs and rights of gig workers.
- Taxation: HR must ensure the revision of tax policies to certify fair contributions from gig contributors.
Adopt and adapt
Recent times have shown us that adopting any new concept has a short timeline and high clout. With the mass resignations that swooped several economies, it isn't wrong to predict that the gig economy, too, may see a sudden influx, which can significantly impact human resources in several ways. HR must adopt new strategies, policies, and tools to manage and engage gig contributors while conforming to legal and ethical standards in a dynamic work environment.
