Times are changing. Life-long careers with the same company, “9-5” predictable work routines and the long-term stability and the security of a job contract are diminishing.
The gig economy has risen significantly in the recent decades. Nearly five million UK workers are part of the gig economy, a 45% rise since 2000.
Organisations will need to have the knowledge on how to manage a mixed talent pool of assignees that will include an increasingly growing number of global mobile gig workers.
What is the gig economy?
It has very little to do with music concerts! 🙂 The gig economy model consists of workers who take on temporary work to complete specific projects. The word “gig” refers to a one-off job that an individual gets paid to do on a contractual basis.
Some argue that gig work is less secure and more exploitative, while others consider it a revolutionary way of flexible working that provides individuals with more freedom than traditional employment.
Why is it rising?
By 2027, the majority of the workforce is expected to consist of freelancers. Several reasons have resulted in the rise of the gig economy; the 2007-2008 economic recession, baby boomers looking to supplement their income, and the emergence of the millennials as they seek more freedom and improved work/life balance.
Advantages and downsides of the gig economy
For the organization, the gig economy model offers several benefits such as reduced costs, increased flexibility, the ability to react much faster to changes and the opportunity to explore new talent.
For the individual, it can offer more flexibility in terms of working hours resulting in an improved work/life balance and increased autonomy. On the downside, gig workers are not always guaranteed work. Tax obligations might be complex for gig workers as they have to record and pay their own taxes. Furthermore, they have fewer employment rights including no sick or holiday pay.
Managing “workforce on demand”
According to a study by Mercer, one of the key trends of the future of work is that HR will not only need to know how to effectively train and recruit talent but they also need to know how to effectively manage workforce on demand. Furthermore, skills need to be constantly upgraded to be in line with the technological innovations and the constantly changing job market. We are seeing more and more diverse ways in the ways individuals are working.
The need to attract and retain gig workers will force HR and mobility professionals to review policies, compensation, and overall processes.
What to consider when managing expatriate gig workers?
Global mobility policies for gig workers: Global mobility packages and policies must be adopted for gig workers as most of them are more likely to be either locally hired foreigners or on virtual assignments rather the usual long-term assignment mode. The standard relocation package might be irrelevant with gig workers as the individual might already in the host location or they might just prefer to make their own arrangements, so it is important to evaluate what packages would be more suitable for gig workers
Adjusting remuneration packages: There are three main aspects that set the remuneration of gig workers: duration and urgency of the project, the business requirements, and the global skill supply competition.
Gig workers and career incentives: A gig worker’s objectives are to increase their employability and the ability to gain further gig work instead of achieving promotion within an organization, thus human resource professionals need to reconsider performance reviews and career management processes.
Learning and Development considerations: Relying on gig workers for projects as opposed to developing internal employees could possibly lead to a less skilled talent pool in the long run. This is one of the issues that comes with gig work: companies rely on to new talent pools instead of developing their own.
Engaging and communicating with the gig worker: HR needs to think how to motivate and engage the gig worker as it will enhance the image of the organization and position them as an employer of choice for such workers.
Compliance: The concept of a gig worker is not always well defined. Internationally, the definition of the “gig worker” varies and contractual agreements differ from country to country. In addition, not all gig workers are necessarily freelancers as some can be considered temporary employees entitled to basic rights such as the minimum wage. As a consequence, organizations may find themselves facing legal complications if the contractual obligations are not clearly defined.