An Introduction to the Gig Economy: Part 3 – What role will talent management play?

Continued from Part 2: Where are we now?

The last post described the difference between an on-demand talent or gig economy and what we have now.

For talent management personnel, the gig economy might sound frightening. If you are on the HR side, how do you deal with workers coming and going constantly? On the learning & development side, most of these workers apparently don’t require job training. Does that mean L&D as an occupation will become obsolete? What about the other functions related to talent management?

According to a blog post on HR.zone.com, “…why invest in less-experienced staff when you can hire very experienced contractors who can start creating results straight away? Why would businesses invest in L&D when the experience they need comes as part of the person they hire?” There is reason in that.

As noted in Part 2 of this series, the industry analysts at Intuit predicted that by the year 2020, as much as 40 percent of American workers will be contractors. In May of this year, PriceWaterhouseCoopers published “The Future of Work,” which states “46% of HR professionals expect at least 20% of their workforce to be made up of contractors and temporary workers by 2020.” The report also notes that “two out of five people around the world believe that traditional employment won’t be around in the future. Instead, people will have their own ‘brands’ and sell their skills to those who need them.”

The Boston Globe announced, “Say goodbye to salaries, health insurance, and vacation days.” But the author of that also pointed out that these changes are worker driven. “According to the Freelancers Union, a 300,000-plus member nonprofit, nearly nine in 10 of its members surveyed said they would not return to a traditional job if given the chance.”

Employers will likely embrace the concept because it lessens responsibility to provide workers with the benefits of full-time permanent employment. Since the movement is worker driven, you can’t blame organizations for quickly installing revolving doors.

So what will happen to talent management as a result? Will managing these no-benefit workers who don’t need job training make life easier and reduce the workload? Doubtful, since the number of employees coming through the organization will likely increase, and some predict the gig economy could create a legal and regulatory quagmire. With so many temporary workers, much more time may be spent in recruitment and qualification processes. PWC’s “The Future of Work Report” states, “31% of HR professionals are building their talent strategies around the rise of the portfolio career, hiring a diverse mix of people on an affordable, ad hoc basis.”

merry-go-round

PWC also forecasts that new staff will be “subject to compulsory corporate culture learning and development programmes.” In a world where brand and reputation are becoming increasingly more important, that makes sense even for short-term workers. So L&D won’t be going away, and when training does become necessary for gig workers, will it need to be even faster and more on-demand?

Which leads to another prediction that traditional performance management won’t work in the on-demand world. Workers may not stay long enough to go through the yearly cycle prescribed by most PM processes. A new system will need to be developed, at least for project personnel. The PWC report makes note of “…the need to create ever more sophisticated people measurement techniques to monitor and control performance and productivity…”

Those are just a few of the possibilities for the talent management industry in the gig economy.

For many of these challenges, employers may need to rely on technology even more than they have in the past. The PWC report suggests “…metrics and data are used to drive business performance through complex staff segmentation strategies which identify thousands of skills sets — creating precision around sourcing the right candidates for the right tasks, as well as on-the-job performance measurement and assessment.”

Organizations will turn to software to meet these demands. Certification tracking and auditing will become essential for regulatory compliance. Career portfolio and skills/competency management can make recruiting easier. On-the-job performance monitoring and on-demand learning delivery may replace some traditional processes. Social learning and team collaboration tools will help smooth the way. Reporting will be critical.

At this point, it’s still guesswork and no one knows exactly how this new work world will play out. But organizations should begin to prepare because like it or not, the gig economy is not just on its way, it’s already here.

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Resources & References
Fast Company: The Gig Economy Won’t Last Because it’s Being Sued to Death
Intuit Forecast 76 Million People in On-demand Economy by 2020
Boston Globe: The Gig Economy is Coming. You Probably Won’t Like it
HRzon.com: Five Reasons Why the Gig Economy Could be a Game Changer for HR
PWC: The Future of Work Report

Photos from Wikimedia Commons and Freeimages.com

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