How HCM Tech Can Adapt to the Gig Economy
The gig economy doesn't just apply to low-skill jobs. It's growth includes highly skilled talent that prefers a new way to work.
Recently, a Wall Street Journal headline asked a simple question: "In a job market this good, who needs to work in the gig economy?" The premise is seemingly sound. After all, the job growth machine has shown no signs of slowing down. But the reality is that lots of people are still turning to contract work, despite the country's relative economic health. In fact, according to projections featured by Nasdaq, "by 2020 43% of the U.S. workforce will be freelancers."
The ease and accessibility of lower-paying contract jobs such as driving for Uber accounts for some of this rise. But for some professionals, being an independent contractor is a great way to effect a lifestyle design. It allows them to avoid commuting and office politics and maybe make more than they would have as a full-time employee. In other words, the gig economy doesn't just apply to low-skill jobs. It's growth includes highly skilled talent that prefers a new way to work.
Organizations Are Taking Notice
More and more organizations are trying to find ways to take advantage of the benefits of this burgeoning economy. For businesses, one major benefit is access to top expertise without a long-term commitment and the expense of benefits. There are other reasons why companies are taking on more independent contractors, too. They might expand to new locations and need help setting up an office. Another reason is that some employment — like tax help or retail — is seasonal.
ADP's 2016 Evolution of Work study found that an impressive 88 percent of businesses are seriously considering looking to hire more contract workers. Like cloud computing, working with a stable of contract workers offers increased scalability. If a project's scope increases, just hire more freelancers. If it drops, then stop working with them.
To accommodate the proliferation of the contingent workforce, organizations should look to procure more advanced and streamlined HCM technology.
Recruiting and Onboarding
Depending on the role, geography can also be irrelevant for contract work. That means your talent pool becomes exponentially larger and lacks the usual constraints. You can now hire someone all the way across the country or even in another part of the world without ever meeting them face to face. Your systems, therefore, will need to be agile enough to account for the variety of information that will be flowing into your HR department.
Onboarding such workers can be a more complex endeavor, as well. It can be difficult to get new employees up to speed quickly and to transfer knowledge, especially when they might never set foot in your office. Modern recruiting and onboarding solutions put everything in one place, and allow users to create an intuitive and accessible plan to follow. They can be accessed by pretty much anyone in the cloud. Such a system needs to let gig workers easily log on and access a portal that can help them acclimate to the work environment.
More organizations need a solution that lets managers, HR and procurement access the same data. Ideally, your HCM system will display a complete org chart, accounting for temporary workers. Integrating contract workers also means making them part of the headcount rather than paying them from other budget items. A mature system would also facilitate the management of freelance talent. Assessments can tell independent contractors what they're doing well and where there's room for improvement. Data about their past performance and specialties can be logged into the system. When there's a new project that suits their talents, their name should show up.
The Ideal System
There are other elements that an HCM system needs to address to truly accommodate gig workers. An ideal system lets gig workers provide feedback, access training resources and navigate the many layers of the organization. For those who want it, there should also be information on pursuing a career path where the contractor can highlight their strengths that would be applicable to an additional role within the organization.
Such a system must then be user-friendly. It should allow for workflow approvals for HR functions like hiring, contract extensions and terminations. Integration with existing systems should allow for the pooling of data in a cloud-based system. It's critical that both HR and finance can feel confident they know where their pertinent compliance information is stored and how they can access it.
The benefits of such a system should both help businesses take advantage of a current marketplace trend and intelligently manage future growth. For freelance workers, a turnkey system will make your business more attractive. Businesses that understand this and effectively evolve with this growing group of workers should find that they have a marketable edge over their competition.