There has been enormous growth in the gig economy over the last several years, driven by the rise of powerhouse companies offering services that largely rely on a flexible hourly workforce, like ridesharing, on-demand task assistance, and restaurant delivery. While the popularity of these services has brought much attention to the workforces fueling them, the organizational gig economy — largely composed of freelancers and contractors tapped for skills-based talent needs — has remained largely behind the scenes.
Until now. As a result of widespread work-from-home mandates in the face of a global pandemic, companies and workers are now realizing just how flexible the workplace can be. They are coming to understand that someone physically far from headquarters can, in many instances, do the job just as well as someone sitting in the office. And as workers find a new sense of balance and autonomy, flexibility is quickly changing from a perk to a demand.
These transformations in both our work environments and our mindsets present unique talent management challenges and opportunities. To adapt and remain competitive in this new talent market, businesses need to learn to manage a blended workforce, one that holistically accounts for both traditional employees and gig workers.
Mixing Gig and Traditional Workers in a Single Workforce
Companies stand to benefit greatly from folding gig workers into their talent strategies. Traditionally, hiring freelancers was primarily considered a way to lower a company’s costs. However, flexibility can be an even more powerful benefit: Gig workers allow companies to more easily scale up or down, which is advantageous if you’re not always able to predict demand.
Additionally, there is the matter of skill. Some of the most highly skilled workers, from creatives to coders, are not interested in joining one company full-time. They prefer the freedom that comes with working on a contractual basis. Therefore, folding gig workers into your enterprise workforce can be a way to tap an even more talented candidate pool.
But once a company decides to make gig workers a key part of its talent workforce, how does it effectively manage those workers alongside traditional employees? There are a few points to consider here:
1. Leverage Technology for Enhanced Visibility
To start, it’s important for employers to recognize contractors’ own unique preferences. Remember, many contractors choose this path because they want independence.
At the same time, you’ll need to set your contractors up so they can easily work with your traditional workforce to successfully deliver on a project’s needs. To organize and optimize your workers like this, you’ll need significant visibility into your workforce. This is where technology can be helpful, if not essential.
Look to leverage tools that centralize your blended workforce and offer visibility into total spend, who is delivering what and when, worker performance, and customer satisfaction. When this information is easy to access, leaders can automatically take action, assign work, or source the right talent on demand. For a holistic talent management approach, leaders must be able to see the full talent picture.
2. Streamline Workflows
In addition to technology that allows leaders to track and organize workers, you’ll also need tools and programs that allow employees to easily onboard and engage with freelancers. A complicated process will only be a drag on the entire organization, defeating the purpose of enlisting flexible workers in the first place.
3. Centralize and Mitigate Risk
Mitigating risks related to compliance and security is perhaps the primary challenge of managing an extended workforce. The laws surrounding the gig economy are varied and often complicated. Moreover, the difficulty of navigating these laws is often compounded by the tendency of businesses to set different rules related to engaging independent contractors across lines of business and regions.
Again, technology can be of assistance here. With the right solutions, companies can set up central compliance rules and parameters that reduce these risks while allowing the organization to stay agile. These solutions can also offer tools for enforcing legal requirements like insurance or frequency of work.
Invest in a Talent Brand
To account for key talent needs, companies should consider proactively building known and robust populations of gig workers who can be tapped with confidence whenever the need arises. This takes time but is often worth the effort.
In the past, some companies would go from market to market to source freelance talent, a practice sound in principle that can be virtually replicated today. As you are engaging talent, be sure to track overall satisfaction with each contractor from the start, along with relevant metrics like the quality of their work and whether it was delivered on time. These insights will allow you to build a repository of information that can help you easily decide whom you want to work with again in the future. For example, if no one at your company remembers that a particular contractor did not deliver the first time around, someone might make a costly misstep and engage that person again months later. Being deliberate about tracking performance will pay off big over time.
With double-digit growth over the last decade, the gig economy is here for good and only continuing to accelerate. Facing uncertainty and change, more and more businesses across all industries are realizing the benefits of a gig workforce. Companies that leverage technology to manage their extended workforces and methodically invest in building reliable talent pools will be better positioned to find success in today’s dynamic business environment.
Jens Audenaert is division vice president and general manager of WorkMarket, an ADP company.