Finally, the major risk that companies identify in using independent workers is compliance risk.
Because the labor cost savings are so great, companies have to create a rigorous review process to ensure that employees are not misclassified as independent workers. It’s important that HR leaders implement clear documentation and manager training to ensure that gig
economy workers are both classified and managed appropriately as independent workers, and regularly reviewed.
The Future: What to Expect as the Gig Economy Workforce Grows
The gig economy is rapidly becoming the new normal for how businesses organize work. There are several demographic and technological drivers that are sparking the accelerating growth of the gig economy. First, as we look ahead to what’s fueling the expansion of the gig economy, we see
increasing demand from companies for independent workers. Gig economy workers are cheaper, are more flexible, provide on-demand skills and expertise, and allow for a dynamic approach to talent management. As long as companies continue to obtain these benefits from adding gig economy workers to their workforce, they will continue to demand gig economy talent.
Shifting values and priorities of the workforce are also contributing to the rise of the gig economy, and it’s clear that more workers are seeking the flexibility, control, and autonomy that the gig
economy offers. PwC’s Everson reveals that “in a study by PwC, the University of Southern California and the London Business School a significant number of employees across sectors and generations feel so strongly about wanting a flexible work schedule that they would be willing to give up pay and delay promotions in order to get it. Sixty-four percent of Millennials say they would like to occasionally work from home, and 66 percent would like to shift their work hours. This is
feedback we take to heart at PwC, since almost 80 percent of our more than 200,000 employees globally are Millennials.”22 As millennials become managers and business leaders, their priorities and values will contribute more to shaping how work is organized and done.
Technology is making it easier, more convenient, and increasingly affordable to find talented, experienced gig economy workers. Leading third-party platforms like Upwork, Field Nation, Toptal, Work Market, HourlyNerd, and many others are another source in addition to traditional temporary staffing agencies to help companies identify and recruit independent workers. According to the
“Freelancing in America 2015 Report,” 69 percent of freelancers say technology is aiding their ability to do so.23
As more professionals switch off the traditional full-time employee track to become gig economy workers, expect additional companies like PwC creating their own platform to source and manage freelance talent. Could this become a movement where certain industries, such as professional services, shift the bulk of their talent to independent workers? Will there be a new breed of Fortune 1000 firm with a core leadership team—a group of leaders and team members with specialized skills
—and the rest composed of gig economy workers? Consider the high “contractor per employee” ratio at companies such as Uber and Lyft. Time will tell, but the growth and benefits of the gig economy point to the rise of a much more flexible and fluid workforce as a way to navigate the changes in the future workplace.
PwC is committed to attracting independent workers as part of its HR strategy because of the company’s belief that gig economy workers are the workers of the future. Everson concludes, “At PwC we have launched the Talent Exchange as a way to find top talent who want to work on their own terms. We simply cannot walk away from nearly 40 percent of the workforce in 2020!”
Another company that has decided that it can no longer ignore the gig economy is LinkedIn.
LinkedIn is offering LinkedIn Profinder, a freelancer-buyer matching service, positioned as “The easiest way to hire top talent” with a menu listing 14 categories of white-collar skill sets ranging from accounting to writing and editing.24 The LinkedIn platform is one that over 420 million business professionals worldwide are familiar with, so LinkedIn’s entry into the gig economy provides a way to explore matching gig economy professionals with employers and test the market for expanding its own services.
Finally, demographics are also a likely contributor to the growth of the gig economy. Many studies have found that baby boomers—who are currently at retirement age—want to keep working well into their golden years. A 2015 survey by The Transamerica Center for Retirement Studies found that nearly two-thirds (65 percent) plan to work past age 65 or don’t plan to retire—ever.25 As older
professionals continue to want to work well past the traditional age of retirement, the prevalence of
“gray talent” will rise to become an even stronger force contributing to the growth of the gig economy.
While the growth in the gig economy workforce seems certain, what’s uncertain is what the legal implications will be of this rise in the gig economy. Courts have already started to wrestle with worker classification lawsuits that are testing the applicability of existing labor laws for contingent workers. While some advocate for a third classification as “dependent contractor,” others argue that it’s more important to ensure that all workers, regardless of classification, get benefits and
protections.
The gig economy landscape is still in flux but growing rapidly. As we move ahead, blended
workforces composed of full-time employees and gig economy workers will increasingly become the norm. We may see entire industries, such as professional services and law firms, significantly shrink their full-time workforce as gig economy workers become a more efficient, lower-cost, and flexible option to meet their business priorities. As the rate and pace of change accelerate, organizations will leverage gig economy workers to optimize for increasing uncertainties in the global marketplace.
MY ACTION PLAN
Myself
• If my paycheck were guaranteed, what assignments would I like to take on within the organization?
• What is holding me back from doing so?
• How would I advise a 21 year old about participating in the gig economy?
My Team
• How could we have our HR team review open roles and discuss new ways to fill these roles with gig economy workers?
• What would have to change for us to move from the concept of filling a job to filling an assignment?
• What is our approach for engaging with freelancers and gig economy workers?
• What new platforms, tools, and skill sets are needed for us to create a total talent management approach to the blended workforce?
My Organization
• How could freelance platforms impact our organization’s sourcing needs over the next three years?
• What new roles will need to be created to best manage gig economy workers?
• How will teams of stakeholders need to work together to govern and manage our gig economy workers?
• How are our competitors sourcing gig economy workers? For what job roles?