Why the Gig Economy Should be Part of Your Talent Strategy

Business.com / HR Solutions / Last Modified: February 22, 2017

One of the current challenges companies are faced with is a lack of skilled workforce to fill their current and future workforce needs.

The gig economy is becoming a household term given the growth of companies such as Uber, Etsy, and Airbnb. These services have become part of the growing trend of matchmaking websites and mobile apps providing individuals the opportunity to become entrepreneurs.

The word gig is being used to describe any type of work that is done on a contract, rather than an employee basis. Think of it similar to a musician who picks up gigs for performing. Same type of concept, instead the work varies from homemade crafts to ride sharing to home sharing and executive workers. It is estimated that currently more than 30 percent of the workforce is made up of these contract workers and is expected to grow to 50 percent by the year 2020.

For businesses, the growth of the gig economy has provided a number of opportunities and challenges. One of the current challenges companies are faced with is a lack of skilled workforce to fill their current and future workforce needs.  An entire article can be written solely on this subject.  

The changing workforce

First, baby boomers are retiring, though not necessarily leaving the workforce. My father who worked at one company from the day he graduated college to the day he retired, became part of the gig economy shortly after retirement. He has been working as an independent contractor the last eight years making more than double what he was making as a salaried employee after working for the same company for 25+ years. Whether they decide to fully retire or continue working on a contract basis, they are no longer available as an employee hire.

Second, one of the biggest challenges for this population is building their book of business and keeping consistent work.  Consider who is more likely to choose this lifestyle –A players or C players? More A players are choosing the gig economy than C players making them available for contract work but not as part of the potential employee talent pool.                                                                                        

Take the combined population of seasoned, knowledgeable baby boomers and some of the top talent in any given industry exiting the employee based workforce and you have an incredible amount of resources that are now only available on a contract basis through the gig economy.

If your company’s current talent strategy only involves the hiring of W-2 employees, I highly encourage you to rethink this. You are likely missing out on not only some of the top talent and brain trust available but also on one of the most scalable and flexible means to accomplishing work.

I was speaking with a CEO recently of a high-growth company.  About a year ago he brought on a marketing executive who was use to managing a 40+ person marketing division in a similar sized company. Today, his company has four fulltime W-2 employees in marketing. All of the work is broken down into projects and tasks. He supplements the team with contract marketing resources who are experts in the specific area that is needed. Their work is planned out, given specific parameters and timelines and real-time feedback at the conclusion of each project or milestone. 

With contract based work, projects are more likely to start with the concept of accountability rather than being an afterthought when things don’t go as planned.  Instead of a position title and job description list that likely hasn’t been updated in a few years, their work is measured by outcomes and accomplishments.  Instead of building out an employee base that does not focus on the company’s core competencies, there is the option to contract with the expertise that is needed to help support or promote the company’s products, services, and core competencies. This allows the internal resources and leadership to focus more on the growth of the company and leverage its core competencies.

With the number of online marketplaces that help companies find, contract, monitor, measure and pay contract workers, it is easier than ever to integrate this type of resource into your planning and needs.

If this is new to you, now is as good of time to start thinking of how you can leverage it for the growth of your company. A good place to start is to look back through your strategic planning initiatives and identify where you either don’t have the internal expertise or the bandwidth to accomplish an initiative or components of one.  Wouldn’t it be great to finally have the right talent you need, as you need it, for the growth strategy of your company?

 

 Photo credit: Gustavo Frazao/Shutterstock

 

 

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