The 'gig economy' is a two-way street

As employers prepare for a future that will include ever-larger numbers of temporary and short-term workers, they need to keep in mind the practices that keep the best people in the fold.

Last fall marked my 15th year of self-employment. It’s the best job I’ve ever had. And a lot of people seem to agree, judging by the raging popularity of contingent labor—otherwise known as the “gig economy” workforce.

Gig workers give employers unprecedented flexibility in marshaling human resources, but to maximize value, companies need to think of contingent workers as extensions of their full-time workforce rather than disposable piece parts. This attitude change will only become more important as gig labor becomes more entrenched—a trend that has accelerated in the last year from business’ growing comfort level in hiring remote workers.

The shift is happening fast. Statista forecasts that project work will generate $455 billion in 2023, up 53% from 2020. A recent survey by daVinci Payments estimated that the gig economy grew 33% during the pandemic. More than nine in 10 respondents to a survey by recruiting site Monster said they think now is a good time to look into temporary work. And a study commissioned by Upwork and the Freelancers Union forecasts that the gig workforce will surpass the full-time workforce in size by 2027.

Much of this growth has been fueled by the emergence of dozens of websites that match freelance workers with businesses seeking help on a piecemeal basis. Fiverr, which started out a decade ago as a place where people posted descriptions of tasks they would do for $5, had 3.8 million active buyers in the most recent quarter, up 56% over the previous year. Upwork, Kaggle, Freelancer, and Taskrabbit are just a few of the other exchanges that match people with projects.

Growth will no doubt continue as organizations find hiring contingent labor to be both easier and faster than scouring resumes and conducting interviews. Technology is helping by making it possible for much more work to be done remotely.

The trend also plays well to the need for speed: Companies that want to adopt “fail fast” techniques in many cases would rather hire expertise than spend months training their own people. Finally, gig work dovetails nicely with the flexible capacity needs of organizations that are adjusting to a workforce that isn’t always in the office.

Changes in attitude

But making the gig economy work to your advantage requires companies to think more strategically about their workforce. In a world dominated by contract labor, success depends less on hiring the best people than on having access to the best people. That means applying some of the loyalty-building tactics of the past to workers who don't have the implied commitment of a full-time job.

Not long ago, most large businesses had an unspoken contract with their people. I grew up in Poughkeepsie, N.Y., in the days when IBM dominated the local economy. Most of my schoolmates came from homes where at least one parent wore an IBM badge. Many of those people had joined the company directly out of college and would work at IBM until they retired with a generous pension and lifetime medical coverage.

Such shared commitment now seems a relic of the past, but there was value in that codependency that still matters.

I’ve experienced both the highs and lows of assignment work. I’ve worked temporary on-site jobs where full-time employees acted as if I were invisible. I’ve encountered onboarding procedures so thick with paperwork that it made me question whether the job was even worth it. I’ve chased clients for six months to get a single invoice paid. And I’ve seen clients abruptly end a years-long relationship without explanation or notice.

On the flip side, I’ve had clients who were sensitive to my workload and adjusted their deadlines accordingly, went out of their way to thank me for my service, paid promptly, and even granted me a company email address.

Who do you think I’d rather work for again?

A two-way street

The gig economy is a two-way street. Employers have flexibility, but so do the people they hire. If you treat temporary workers like they’re replaceable cogs in a machine, you’ll spend a lot more time vetting more people than you must. A better approach is to think of them as you would a babysitter or home contractor: the best ones get most of your work, and, in turn, make themselves available when you need them.

  • Make your onboarding process as simple as possible; time is money to short-term workers.
  • Include them in events and “all hands” communications where appropriate.
  • Pay promptly. You’d be amazed how much loyalty that simple step can engender.
  • Be clear about what is expected and how long the engagement will last.
  • When the project ends, thank them and depart on the best possible terms.

The gig economy is actually a distant mirror. Prior to the industrial revolution, most people worked that way. As we now enter what some people are calling the fourth industrial revolution, workers and their employers should prepare for what may be a giant step back to the future.

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Copyright © 2021 IDG Communications, Inc.

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