Key Points
  • As technology enables easier, secure and remote working arrangements, millennials are increasingly opting for jobs that offer independence and flexibility

  • The emergence of the gig economy and the growing band of independent workers could create a talent shortage for businesses

  • Businesses must rejig their operations to include gig employees and enable internal gig environments that drive collaboration and co-creation

The gig economy, as it is popularly known, has been in the eye of a storm lately. In February 2018, the British government trained its sights on unfair working practices in the U.K. as a result of the gig economy. Another ruling by the California Supreme Court has expanded protection for gig workers. A McKinsey report estimates that 20 to 30 percent of the working-age population — up to 162 million people in Europe and the U.S. — engage in some form of independent work. Hence, enforcing stricter policies to insulate this segment is a move in the right direction.

But how can organizations insulate themselves against a shortage of talent as the gig economy grows? Studies show that millennials and Generation Z prefer flexible work arrangements and rank work-life balance way above job security. As technology continues to enable easier, secure remote working arrangements, companies need effective strategies to make the workplace more inviting for young talent. Here are a few guidelines that can help.

Flexible Hours: Companies can eliminate the fixed shift system and ask employees to create their own work week. Instead of the standard 40-hour week, employees can choose a 25- to 45-hour work week. They can also decide on the length of their breaks. Compensation can be based on the hours they work.

Work Culture: The culture of the organization will be the cornerstone in managing this disruptive workforce trend. Holacracy, the system of distributed authority in which teams and individuals are empowered to make decisions rather than just follow orders, appeals more to the young workforce than the old style command-and-control system. This culture shift requires transparency in all decision-making processes. It means treating employees like entrepreneurs who can self-organize themselves into teams and self-direct their efforts to make the organization succeed — and themselves along with it.

Listen-and-Learn: The most effective leaders listen to new ideas and implement changes when required. For example, these leaders can set up teams consisting of young professionals to brainstorm and bring in new ideas. Then senior leadership team can leverage these ideas to shape their strategies.

Co-creation and Collaboration: There are many who call the current workforce the collaboration generation. Ideas are developed through open discussion and sharing and team members manage projects remotely. In a shared economy, co-creating and co-delivering take centerstage.

Organizations should also remember that there’s a deep talent pool within their own companies. They can tap into the skillsets of existing resources to complete a project through an ‘internal’ gig economy platform. Employees can be given the leeway to spend a reasonable amount of time on these in-house gig projects.

A conducive and supportive work environment is required to address the shift in people dynamics that a gig economy can herald. Such an ecosystem will attract, engage and retain niche gig workers as it becomes clear that every organization will need a combination of both the highly skilled and highly priced worker and the less-skilled and lower-paid gig worker.

People practices must evolve to make both kinds of talent successful and integral to the growth of the business. From performance engagement practices to compensation and benefits, organizations need to balance compliance and hiring while nurturing and retaining gig employees.

In short, human resources teams need to re-architect their functions on a wider canvas and assume leadership as functional experts in a global workplace that increasingly includes gig employees.

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