What about the gig economy employers should build into their workforce analysis

Posted February 14, 2018 by


HR leaders, as you do a workforce analysis, do you see the gig economy as a threat or an opportunity? I checked in with Mona Tawakali, Vice President of Digital Strategy with KRT Marketing to get insight into this question. Tawakali has not only done extensive research on the trend and the impact of the gig economy, but her team is also continually hearing from employers about how the new world of work is changing their strategies.

Overall, your organization should see the growing gig economy as an opportunity. Business leaders understand the increasing need for agility, and the gig economy lends itself nicely to being nimble. With people working gigs or projects, it becomes easier to scale up or down more quickly. You can “change your workforce for the skills you need” at the moment, says Tawakali. This is especially beneficial for startups, small businesses and growing companies. The effect of this, she says, is a more efficient economy overall.

The effect is a more efficient economy overall.

With the pace of change, even a deep workforce analysis may not be enough to predict what talent your organization will need 5 years from now. Completing important projects with transitional and commoditized labor might be a better solution. In fact, your managers may be pleased to bring in temporary skills to finish projects. Further, with gig workers joining their teams, they will spend less time onboarding, because gig workers are hired for a skill set that is exactly tuned to the project at hand.

Recruiters benefit too. When recruiting gig talent, recruiters are free to deepen the pool of talent beyond geographical constraints. “This is especially ideal for smaller areas that have low talent pools,” says Tawakali.

In a market that competes vigorously for top talent, offering project-based work is actually preferred by many entry-level candidates. Not only does the flexibility and shorter commitment suits many workers’ preferences, college grads may see it as a perfect entry into the workforce before they find a more permanent career.

Gig economy will grow to almost half the workforceEntry-level gig hiring has to be sustainable

The gig economy is here to stay, says Tawakali. According to a Randstad US study, gig workers are expected to be 43% of the workforce by 2020 (only two years away!). Most workers (70%) and employers (68%) agree that by 2025, the majority of the workforce will be employed in an agile capacity.

By now you know that gig workers are not just shared ride drivers or delivering food. The gig economy includes more than 67 million Americans who work on a freelance basis. Millennials are driving much of this change. That generation will make up half the workforce in a couple years, and their sheer numbers should force their preferences onto your radar.

Related: Millennial expectations of engagement, inclusion and concrete tips for managers

In response to the trend, Tawakali is seeing colleges and universities adapt coursework that helps students develop the skills—both hard and soft skills—that they can use to create their own job opportunities such as entrepreneurship, webpage design, project management, collaboration.

How is gig recruiting different than traditional recruiting?

Fully embracing the gig economy can give your organization an advantage in your talent management strategy. People who like working in the gig economy do so because they value flexibility and variety. Organizations that offer this can more easily tap into job seekers’ preferences. Especially for entry-level job seekers who have yet to find full-time employment, offering project-based work can be an excellent win-win for candidates and employers.

With the expectation of flexibility and agility comes the expectation that your application and hiring process will be streamlined and easy. Employers are still learning the hard lesson that their ATS asks too much of applicants up front and drives top talent away. With gig workers, this pain point will feel more painful. Tawakali advises employers to “use Machine Learning and A.I. to match the right freelancer to the right project.”

When you recruit gig workers, you need to be clear about the scope of the project. Entry-level candidates overall are already demanding clarity around what exactly they’ll get to work on, and gig workers need an even sharper focus before they even accept the gig. 

Workforce analysis should take challenges of gig economy into accountConsiderations before diving head first into the gig economy

Any workforce analysis should recognize the challenges associated with fully incorporating the gig economy into your talent strategy. First, independent work doesn’t offer a clear-cut career path. When creating succession plans for key positions, for example, gig workers may not offer what you need to fill certain pipelines. Similarly, because you are only utilizing “part” of a person, you don’t get the opportunity to see what other skills that individual may be able to offer.

In addition, Tawakali says, “employers have to pay a premium for on-demand workers, such as last-minute shift coverage. That can be costly, but more importantly, it is more reactive than proactive and can be bad for business.

For employers who take gender diversity seriously, Tawakali makes an important point about women working in the gig economy. “Female workers are empowered by the gig economy. While many women turn to gig work for the flexible work hours, one of the most compelling reasons is equal pay and having more control over income.” Your organization may decide that embracing a gig workforce is your ticket to higher gender diversity. Remember, however, to look more holistically at your entire pay structure, ensuring that everyone is compensated fairly for the value they bring to your organization.

Also read: 8 organizations that are succeeding in leveraging diversity

The gig economy creates strategic employment options for many organizations, but Tawakali advises employers to heed the advice of Labor Economist Paul Oyer. That is, HR leaders need to ask themselves the following questions:

  • Can we get the same skill cheaper and far away?
  • Is it okay if the person is not here very long?
  • Is there a good chance we will want to get rid of this person soon?
  • Does this person have a specialized skill that my organization needs to compete?
  • Are we looking for a scarce skill?
  • Do we want a “part of a person”?

Workforce changes to expect with the growing gig economy

Tawakali points out several broad changes she expects to see as the gig economy grows.

First, the gig economy will, sooner or later, follow the transparency trends that are impacting industry right now, such as pay transparency and review integration.

Second, we should expect more government intervention as the gig economy grows. Government will want solutions to social safety net issues such as benefits and a more appropriate tax code for gig workers.

Third, technology will enhance the gig experience on both sides of the transaction.

Finally, Tawakali expects higher education to be disrupted by the growing gig economy. They will have to evolve curriculum to support the future of work, and employers will continue to question the value of the degree, especially the premium placed on elite degrees.

Also read: Strategies to address the skills gap and plan your future workforce


Examples of jobs in the gig economy

  • Multimedia artist
  • Sound Engineering Tech
  • Accountant
  • Management Analyst
  • Software Developer
  • Web Developer
  • Interpreter, Translator

Mona Tawakali at KRT MarketingAbout Mona Tawakali: Mona is the Vice President of Digital Strategy at KRT Marketing. She works alongside industry-leading Fortune 1000 companies on their digital recruitment marketing efforts. She is passionate about continually trying to find better ways to deliver the best ROI on all advertising investments.



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