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Gig Workers and the Impact on HR

As the workforce changes, HR needs to change.  This has always been true.  In the 1960’s and ‘70’s the role of HR was much more focused on union negotiations, grievance procedures and ensuring that wage packets were handed out on time.  As the work shifted from factory to knowledge worker, especially in the western world, the HR function adapted its focus more on the employee experience, performance management and total compensation strategies.  There is another shift in the types of workers dominating the marketplace, gig workers, which will drive that the HR function to change once again to support the needs of the business.

The HR function will need to change to support a business that progressively has the less permanent full-time staff to one where there is a broad mix of labour contracts.  The types of “employees” will radically change including part-time, contractors, freelance, individuals paid for output and not input, people contracted to fill capacity gaps versus skill gaps.  These are just some examples of where HR will need to change what they do and how they do it to ensure the business has the right talent in the right place at the right time.

There are many areas where HR needs to change systems, processes and policies to manage the requirements of the business with the changing workforce dynamics.  Here are a few. 

Shift from recruitment to procurement - If your company is going to use independent workers “in bulk” then HR needs to move from recruitment to purchasing mindset.   To get the right quantity of labour with the right skills at the right time will become more of a purchase activity than traditional recruitment.  Does your HR team have the ability to adopt a procurement way of working to attract and contract the right quantity of workers the business will need?

Employment contracts to services contact – HR professionals have spent many hours perfecting their employment contracts to meet the requirements of the company. The HR team now needs to apply the same level of detail to services or “gig worker” contract.  Most likely you will not need holiday entitlements, years of service awards, bonus payment schemes or other portions of a traditional employment contract.  Companies will need to be much more careful about how they are writing services contacts in the areas of IP, non-compete, returning of assets at the end of engagement (both physical but also electronic), payment terms and liability for taxes, to name a few.

Re-think on-boarding – While independent workers might not need the full onboard process that you would apply to a permanent staff member, they might need more than being handed a badge, given an email address and the appropriate OH&S training.  What is the level of onboarding does your company want to provide to “gig workers”?  Do they need a training session on culture?  Does it matter if they are not entirely aware of the history, executive leadership or corporate policies?  Each organisation will need to assess what level of investment they want or need to make into the independent workers to ensure they are as productive (and as compliant) as they need to be within your environment.

Role definition – For independent workers, a typical job or position description might be appropriate for what you are going to ask them to do.  For others, it may be better to create an output/deliverable type of service agreement.  An agreement that says “at the end of X weeks the individual will deliver A, B and C”.  Defining the deliverables upon which you will pay the worker. 

Finance and budgets – One of the biggest discussion points between HR and Finance is the headcount budgets.  What is an employee?  What is an FTE?  As organisations move from less permanent full-time workers to more independents the way we budget and manage the cost of labour needs to change.  No longer can you just look at the “wages budget” as a way of assessing the total cost of labour in the business.  Finance and HR need to partner to come up with what will be the right way to plan and control all the labour costs, whether permanent or contract.

Location – Many organisations are already struggling with the plus and minus of remote working.  Will you allow “gig workers” to work from locations other than your office?  Will independent workers have different rules regarding operating locations than your permanent staff?

Devices and IT – Many organisations already have a policy around BYOD (bring your own device), so they know what needs to be done to a privately owned PC or tablet to ensure connections the company network, security and access to the right corporate applications.  Organisations that have not gone to BYOD might want to consider this if they are increasing the number of “gig workers” they are using.  If you require your contract type employees to BYOD, then you need to have the right policies and procedures to ensure their machine if “fit for purpose” when they are working for you and then “cleaned up” when they leave.

The free, independent workers are increasing as a percentage of our workforce.  In a recent presentation, Deloitte stated that 41% of the US workforce is contingent, and the rate is growing at 1% per year (Statistics from the US Bureau of Labour Statistics).  This means that by 2025 almost 50% of the workforce will be a free, independent worker. 

Some workers pick contingent work because they have to others because they want this type of working arrangement.  Whichever reason, over the next decade HR has to transform to meet the challenges of the changing workforce.  HR teams need to review their systems, processes and skills to ensure they address the needs of the “Me Inc.” world along with meeting the business needs around the quantity and quality of talent.

Deloitte Human Capital Trends 2017

Picture Credit - WegoLook

Mary Sue Rogers

Posted On : 31-03-17

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