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October 16, 2015 / Mervyn Dinnen

HR and The Gig Economy

Nestled amongst a list of potential future C-Level roles in a recent Fast Company article was ‘Chief Freelance Relationship Officer’. Some groaned but this made perfect sense to me. According to the author:

“As companies continue to increase their dependence on freelance and contingent workers, many believe that the time will soon arise when an executive employee is tasked with maintaining and growing their partnerships and reputation within the freelance community”

This echoes something I wrote in a recent blog for JM Executive about HR and the employer brand:

“With growing numbers of interims and consultants working as contractors or freelancers for businesses it would be a mistake to assume that employer brand only relates to those who are permanently employed. Growing numbers of reviews on sites like Glassdoor come from people who have been contractors so the way that they are engaged and paid, with clear briefs and support where necessary, can also impact on how you are perceived as a place to work”

The recent Randstad Sourceright 2015 Talent Trends Report also identified the rise of the gig worker as an emerging trend. They reported 47% of HR leaders factoring in independent contractors as part of their talent acquisition strategy. Amongst their advice on how to manage these workers was the importance of engaging them:

“As an organisation utilising all types of labour, consider how your employer brand is perceived across your entire employee population. Remember to communicate your employee value proposition to all potential talent”

Whatever the reasons driving this shift, we’ve got more self-employed and freelancers working for organisations. Then there are also the gigsters, the casual help, the new wave of entrepreneurs and start-ups who fuel the sharing economy/collaborative economy/concierge economy or whatever we call it this week. All different types of workers with one thing in common – nobody employs them permanently yet their experiences of working within, or collaborating with, a business are becoming just as much of employer brand as that of regular employees.

This will grow. Increasing numbers of Uber style apps/platforms for employment are being launched and raising funds. Some are looking at general skills but a growing number are for very niche sectors. This ‘human cloud’ has recently been the subject of an in-depth FT piece. There are estimates of global spend through these platforms already over $3bn, though this could be understated as US leader Upwork estimates $1bn of payments through its site alone last year.

So once they are engaged to perform a duty, who has responsibility internally for the gigsters?

These kind of deals will often fall under the remit of procurement, though their drivers will often be cost and delivery deadlines.

For many companies it will be the hiring or project manager, who has a budget and specific delivery requirements.

It has implications for recruiters and agencies.

The recruiter and HR person in me concludes that if the Chief Freelance Relationship Officer is a role whose time has come, then it should be part of HR. In fact it’s probably part and parcel of what HR does, not separate. Its a role about curating skills, satisfying requirements and needs through the best available hiring channel. Freelancers are part of the wider employer brand ecosystem, their experiences reflecting the type of business you are to work for. The work they produce is ultimately part of the overall business output. The data they have access to, and add to, is subject to the same company privacies and regulations as permanent employees. And their employment status, often unclear and uncertain, is one that HR needs to understand – particularly if pay rates come under scrutiny.

Whilst the whole flexible/outsourced workforce seems a growing phenomenon it’s not necessarily a new one. As far back as 2001 this research paper on the challenges for HR in managing the outsourced workforce was published with this remit:

  • For most of the twentieth century, the number of tasks and levels in large organizations grew incrementally, adding new job and career opportunities to full-time employees. In recent years this pattern has fundamentally changed.
  • Global developments, both technological and economic, have led to many organizations cutting back their operations, closing facilities or outsourcing non-core activities to specialist providers.
  • As we move further into the twenty-first century, we can realistically expect that the need for cost reduction, speed and flexibility will become even greater, leading organizations to reduce the number of full-time employees.
  • As labour markets are becoming tighter and supply-driven, finding qualified staff will become more difficult and companies will increasingly have to depend on temporary staff and other types of non-permanent employees to meet their staffing requirements

In the US, the Freelancers Union offers a strong voice, with their #FreelanceIsntFree campaign getting some traction. Meanwhile there is a vibrant online network of project workers ready to share their experiences. Just as the new platforms enable companies to rate their freelance workers, so those workers have the same opportunity to rate those who engage them. Whether by user reviews on a site such as Glassdoor or user ratings through an app there is a growing two way transparency – with pay rates and timeframes likely to be in firing line.

Is business, and HR, ready to operate in a ratings economy?

(image from https://www.freelancersunion.org)

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