How (and why) the enterprise is redefining the gig economy
Why agile workers are a competitive advantage
The gig economy is no longer just something that young people dabble in while they look for better opportunities. While driving and delivery gigs are still plentiful, the most important evolution in the gig workforce is in the enterprise.
Now, highly experienced professionals are opting in to gig work, and enterprise organizations are leveraging contingent, flexible workforces at scale to access the deep and wide pool of talent while maintaining business agility.
In fact, in the midst of a hot economy during which veteran employees are retiring at astounding rates, companies should prepare to tap into the agile workforce as a competitive advantage.“Companies should prepare to tap into the agile workforce as a competitive advantage.”
“Across the nation, in industries as varied as trucking, construction, retailing, fast food, oil drilling, technology, and manufacturing, it’s becoming increasingly difficult to find good help,” Avi Salzman wrote in his article The Great Labor Crunch for the March 21 cover story of Barron’s.
“And with the economy in its ninth year of growth and another baby boomer retiring every nine seconds, the labor crunch is about to get much worse.”
Salzman cited a stat that suggests between 2017 and 2027, the US will face a shortage of 8.2 million workers—the greatest shortfall in more than 50 years.
“Two other pressure points add to the pain,” Salman added. “Millions of people have dropped out of the workforce, owing to factors such as disability, opioid addiction, and prison records that make it hard to snare jobs. The Labor force participation rate, which measures the percentage of the adult population that’s working or actively seeking employment, has dropped to 63 percent from 67 percent in 2000.”
Now is not the time for enterprise organizations to shrug off potential workers because they’ve opted out of the 9-to-5 cubicle routine. Especially considering 80 percent of human resources professionals say they struggle to find people with the skills they’re seeking.
By all accounts, the volume of people opting for gig work is impressive and getting larger. For instance, Freelancer’s Union, a gig work platform, reported last fall that independent workers will be a majority of the U.S. workforce in just a decade.
The organization noted the economic output associated with these gig workers: “America’s 57.3 million freelancers contribute $1.4 trillion to the economy, an increase of almost 30 percent from the previous year.”
Gig economy can spark enterprise productivity and innovation
The critical mass of gig workers presents an opportunity for enterprises to select a workforce based on the precise skills, expertise and availability needed to advance priority projects.
“From internet startups to global conglomerates, freelancers provide an incredible opportunity to outdo the competition,” said Michael Burdick, CEO of Paro, a firm that sources and vets finance professionals for gig opportunities. Burdick’s company recently received $5 million in funding from AOL’s Steve Case.
“Foremost is the ability to cherry-pick the right people for the right job at the right time. Why pay someone to sit at a desk waiting for a chance to shine, when you can instead divert that money toward people with relevant experiences and credentials?” Burdick asked in a column he wrote for Forbes.
A 2017 study by WorkMarket, an ADP company, suggests contingent workers can help drive productivity. Seventy-two percent of companies that reported using contractors also said they believe using specialized labor-on-demand is increasing their productivity.
Certain sectors have typically used a contingent workforce for a decade or more. Some estimates suggest roughly seven percent of healthcare workers are hired on a short-term basis, along with almost 50 percent of all construction workers and a third of all workers in agriculture.
More recently, a growing number of enterprise giants are embracing gig workers and the agile workforce model. Ikea acquired TaskRabbit, the platform that connects consumers with gig workers who are willing to do chores such as assembling Ikea furniture, standing in line to pick up treats at phenomenally popular ice cream shops, and hanging artwork on apartment walls.
GE reportedly works with a significant contingent workforce that supports field operations. Proctor and Gamble uses outside workers to drive innovation, a strategy that has resulted in ideas for a number of products that have become household names, including the Swiffer Duster.
Software giant Microsoft is looking at how to make itself appealing to gig workers, according to a March 2018 article from Talent Economy. “Microsoft uses a lot of freelancers and wants to become not only the employer of choice, but the gig of choice, Thiele said. It is looking for ways to give gig workers the benefit security they lack,” the article stated.
Predicting a seismic shift in the workforce
Those who look at the big picture say these trends reflect seismic shifts in our economy.
“In 10 years, a Fortune 2000 company will have no employees outside the C-suite,” according to a 2017 column in Forbes. The prediction came from consulting giant Accenture, which produces an annual Technology Vision Report each year exploring the big trends in tech.
Netherlands-based human resources giant, Randstad, cites its Workplace 2025 study to point out that the shortage of talent along with globalization are among the top reasons for enterprises to build an agile workforce.
“Fifty-two percent of C-suite executives say by 2025, their organizations will be much more committed to building an agile workforce. In fact, 68 percent of employers and 70 percent of employees agree that by 2025, the majority of the workforce will be employed in an agile arrangement. Employers expect 69 percent of their workforce to be agile talent by that time frame,” the study says.
Randstad’s Chief Human Resources Officer Jim Link in an article by Forbes noted that the US is slower to adapt because many companies are still married to the concept of a more traditional type of organization—one that workers in an agile workforce would find passé.
“We’re going to have to spend more time with these employers and companies to get them ready,” Link said.
Michael Burdick, CEO of Paro, called it a freelance revolution: “Instead of fearing the structural changes on the horizon thanks to this shift in how we work, business leaders should seize the opportunity to get ahead of the curve by embracing freelance workers.”