Question:
Discuss about the HR Challenges in a Gig Economy.
Gig Economy is defined as the consistently developing number of individuals who utilize one of the (still moderately) new ability stages or online administration handling like Uber, Airing, up work, Task Rabbit. For others, it incorporates these individuals, yet in addition any individual who works in an unforeseen, brief, enhanced or independent limit. As it is any individual who isn’t a full-time or low maintenance worker(Schiemann and Ulrich,2017). The absence of clearness about what it really contains leads, as anyone might expect how huge it really is – that is, the thing that level of the workforce it includes. The individuals acquiring salary by means of online stages, at this point is unquestionably expanding(Horney,2016). This current examination from JPMorgan Chase, found that 1% of all US labourers are engaged with at least one of these online stages, which compares to the quantity of individuals working in the US public school system.
From research, it is unquestionably evident that a lot of individuals are exploiting the new stages that make it less demanding to supplement their current pay. Yet, is that all it is, or is there truly an expansion in the quantity of individuals picking non-conventional work choices generally speaking? The overwhelming conviction is that there most certainly will be an expansion in the coming years. An examination by the Specialists’ Union and up work found that 32% of recent college grads trust they’ll be working basically adaptable hours in future(Brown,2009). Another research by PWC found that 46% of HR experts expect that no less than 20% of their workforce will be comprised of contractual workers and impermanent labourers by 2022(Dunning,2017).
The most recent research demonstrates that doing gig work, utilizing and picking a progression of activities for various organizations, is fulfilling. One can pick their business status, the hours they work and their customers. Nonetheless, the work isn’t as much enjoyable to the individuals who have been pushed into this sort of work by condition. In Australia, the gig economy, portrayed by short term business contracts. It is developing at excellent speed, sharing one- fifth of Australia’s work constrain. The individuals picking for the gig work are not there in light of the fact that they can’t give their all day position. In an overview of 1,007 Australian gig and contract specialists reviewed, work-life adjust was the greatest driver with 87% viewing it as amazingly or critical to them. The individuals who have control over their work-life balance have a 90% fulfilment rate, while those without control over this have a 26% fulfilment rate. The Gig economy has a connection with work fulfilment. The individuals who have control over it have an 85% fulfilment rate contrasted with 39% for the individuals who don’t get the chance to pick who they work with. Most interestingly, the youth is driving towards the gig economy. In any case, this examination demonstrates that the baby boomers and Generation X are well on the way to pick the adaptability offered by the gig-economy,” says social analyst Check McCrindle, the head of McCrindle. It enables them to pick their hours, as well as they can pick the work times that will best suit, yet additionally increment or lessening their workload relying upon their money related requirements(Graham, Hjorth and Lehdonvirta,2017).” Australians who work calmly have their optimal hours every week at 22.9 hours, or around three day and seven days.
Up work, was formerly known as Elance-oDesk, is a global freelancing platform providing with businesses and independent professionals connect and collaborate remotely. The brand is based in Mountain View and San Francisco, California.
They have twelve million registered freelancers and five million registered clients. Around Three million jobs worth a total of $1 billion USD are posted annually. This is making Upwork as the world’s largest freelancer marketplace. The work is available on the online basis. Freelancers can register themselves and can take work accordingly. Upwork is providing with the specialist work with a focus over providing independent work to an individual as per his/her competencies(Lowe,2017).
There is a likewise contradiction on the effect expanded ‘non-conventional’ labourers will have on HR. Be that as it may, when joined with variables, for example, expanded working environment adaptability, a worldwide, dispersed workforce, progresses in mechanical autonomy and psychological advances . All this will add to the ‘future working environment’ to a great amount which will turns out to be a piece of a scope of elements HR needs to represent when arranging future techniques(Collier, Dubal and Carter,2017). As indicated by Deloitte, 71% of officials trust their organizations are either ‘fairly’ or ‘extremely’ ready to oversee unforeseen specialists, with the primary difficulties being:
A similar report noticed that main problems could emerge when unforeseen labourers are enrolled through acquisition and not HR, suggesting that HR assume responsibility of the procedure and line up with corporate tech, acquirement and business technique. Anna A Travis trusts that “there is a particular motivation for HR to reconsider its own capacity, including the likelihood that most HR specialists will turn into the contractual workers themselves rolling in from the ability stage(Brown, 2017). HR experts must grasp the new economy and advance up to the administration challenge as specialists, planners, engineers and the orchestrators of the “limit less worldwide working environment.” Furthermore, as indicated by PWC, HR will go up against a more extensive individuals dispatch and turn into the driver of corporate social duty(Herman,2004).
A 2014 CIPD report found that the essential worry about non-lasting staff was around the nature of their work. Of the 633 UK HR pioneers overviewed about how they treated their easygoing labourers:
These discoveries are strengthened by John More youthful and Norm Smallwood who recommend 6 stages to enable HR to close the execution arrangement hole with ‘light-footed ability’:
In the gig economy, association’s initiative, culture from one of charge and-control to one of joint effort, coaching and organization plays an important role.
It’s settled that workers will have a larger amount of prosperity and perform better when they sense that their work association thinks about them and qualities what they want. HR needs methodologies set up to ensure that freelancers are on-boarded and invited, demonstrated thankfulness and turned out to be more drawn in with their work. Full-time and independent specialists were more drawn in, fulfilled and imaginative than customary representatives. They were likewise less dedicated, notwithstanding when in a long haul contract. They were more averse to work with others, share data openly, achieve choices by agreement and resolve strife(Dery and Sebastian,2017).
It may at first appear to be peculiar to survey specialists for values fit or behavioural style. It is similar to an individual one contract to finish work. It is evident to know the individual offers and the correct style to team up well with the general population. In order to understand the intellectual capacity gives you certainty that they’ll get new data rapidly and take care of issues successfully(Abraham, et al 2016). In case working with an ever increasing number of individuals later on with a considerably shorter ‘enlistment’ process, it turns into all the more imperative to ensure that procedure is vigorous and will provide with value ability. Despite the fact that this issue hasn’t, as far as anyone is concerned, emerged particularly inside the ‘gig economy’ discourses(Friedman 2014).
While understanding the gig economy, there are certain misconceptions regarding the freelancing work that is integrating talent strategy.HR will have to overcome while taking care of the workforce of freelancers, contractors, consultants and interims.
The HR has to manage the queries submitted by freelance workforce that will focus on different types of challenge: visibility challenges and management challenges(De Stefano,2015).
These are the challenges that immediate and obvious to an organization while managing the freelance element of a workforce. The organization has to meet the challenges that are not complete visible while engaging workforce,
The Visibility challenges, occurs as a result of it being possible for any part of the business to engage a freelancer directly. This creates a direct relationship with the HR manager and the line manager with the freelancer(Prpi?,2016).
One of the major challenges while managing a gig economy arises with the management of cost control. The unobserved freelance worker is cost control. The amount charged by the Freelancer can be checked through the payroll cost and charged to the department credit cards
With no visibility of your true freelance cost, one cannot apply effective HR practices, like standardizing day rates, or developing an effective HR Practices. There must be an effective understanding in between the department to seek suggestions whether there is an opportunity to reduce costs by creating a full-time, permanent role.
Another issue faced by the organization is that it is important to manage the compliance functions. It is important to develop an effective legislation in order to gain effective knowledge. This works as an important factor to determine freelancing activity and its intention to work.
The visibility challenge and compliance offer with a risk of having freelancers or contractors on long, rolling contracts basis without HR checks and balances. This is done to alleviate any regulatory risk to the business(Beetham,2016).
The HR teams play an important role in maintaining an organization’s security. This is to Access information, at the same time as managing something else. This is done during the HR on boarding process. In case if the freelancer or gig worker evade the usual HR processes, there is a possibility that security protocols can be bypassed. For example: Circulation of the department email lists. It is used to issue sensitive internal information(Carnahan, 2016).
Those Freelancers hired unswervingly may be added to the email distributions list without visibility from HR. This can create security risk within the organization. This put a pressure over the organizational security hence affecting growth.
There can be potential harm to the intellectual property. There may be certain instances where the HR teams strictly put into effect contracts to make certain all permanent employees defer ownership. This is crucial for the organization while dealing with the issues. Standardization is an important aspect in an organization while maintaining effective growth. Intellectual rights and security plays an important role while creating a balance in between the organization and its effectiveness.
Overcoming visibility challenges
It is evident to overcome the visibility challenge in order to manage the task effectively. There are two steps to manage the visibility challenges: consolidation and reporting.
It is evident from the risk associated with the HR issues that is related with consolidation. It is important for managing all the freelance and contractor engagement data that goes through HR while capturing all the management information required. Further, it is important to report. By using an effective freelance management system, it is evident to create a reports and dashboards to gain resourcing decisions.
The management challenges
Apart from the visible challenges there are certain management challenges that need to be taken care while gaining accuracy.The workforce creates management challenges for HR teams to overcome. This will help the gig economy in managing the issues in an effective way.
Integration
By engaging a freelancer, the HR department creates an integration challenge if the permanent employees they work together with a set location and time slot. It is challenging for both the management team and the HR to integrate the efforts of both.
The short-term solution includes location and available hours in the freelancing work. Yet, it may be prudent to look into the remote and flexible working practices. This is an important function for coordinating the efforts of the freelancer or permanent employees.
Progression and development
Moreover it is required by the HR teams to manage the L&D function. This will ensure the organization’s people are ready to grow with the time. This will eventually help in managing the organizational functions.
An increase in the freelance percentage of an organization’s workforce, the challenge for HR to maintain the level of progression arises. The freelancers are self-employed and mandated to attend training courses. The solution for the effective training program is the Contingent Value Proposition. It is the key to attracting the right kind of freelancer. This process is important In addition to communicating with the freelancer. This help in contributing better results in gaining long-term results.
The HR’s role is regarding ensuring business continuity with a freelance workforce while reviewing and refining the freelance network. This is important while engaging adequate number of vetted freelancer’s business critical operations.
Availability
One of the final management challenges is regarding the availability. The Freelancers with in-demand skills typically work with different clients while managing the opportunities presented every day by freelance marketplaces. The business functions and the HR team have to coordinate with the right people at the right time in the organization. The workforce are self-employed freelancers do not have any sort of obligation. It has become difficult to ensure availability of skilled people and the business needs. This is important while managing the availability of the employees in the gig economy. The challenges need to be addressed effectively while considering all the factors aligned in the organization.
Conclusion
To conclude, with growing opportunities in the field of freelancing and contractual work, gig economy is the new concept. HR needs methodologies set up to ensure that freelancers are on-boarded and invited, demonstrated thankfulness and turned out to be more drawn in with their work. Full-time and independent specialists were more drawn in, fulfilled and imaginative than customary representatives. There is a need to manage the gaps in between the organizational needs and the economy to gain maximum result. The challenges need to be managed while keeping a pace in between the organizational needs. This will eventually help in gaining competencies in order to assure desired results.
References
Abraham, K., Haltiwanger, J.C., Sandusky, K. and Spletzer, J.R., 2016, May. Measuring the ‘gig’economy. In Society of Labor Economists Annual Meetings, May.
Beetham, H., 2016. Employability and the digital future of work. In Proceedings of the 10th International Conference on Networked Learning.
Brown, D., 2017. Issue: The Gig Economy The Gig Economy.
Brown, T., 2009. The gig economy. The Daily Beast.
Carnahan, S., 2016. Can You Gig it? An Empirical Examination of the Gig-Economy and Entrepreneurial Activity.
Collier, R.B., Dubal, V.B. and Carter, C., 2017. Labor Platforms and Gig Work: The Failure to Regulate.
De Stefano, V., 2015. The rise of the’just-in-time workforce’: On-demand work, crowd work and labour protection in the’gig-economy’.
Dery, K. and Sebastian, I.M., 2017. Managing Talent for Digital.
Dunning, J.2017. Gig economy: the challenges of managing a freelance workforce. Online. Available at: https://www.hrzone.com/lead/future/gig-economy-the-challenges-of-managing-a-freelance-workforce Accessed on: 27 October 2017
Friedman, G., 2014. Workers without employers: shadow corporations and the rise of the gig economy. Review of Keynesian Economics, 2(2), pp.171-188.
Graham, M., Hjorth, I. and Lehdonvirta, V., 2017. Digital labour and development: impacts of global digital labour platforms and the gig economy on worker livelihoods. Transfer: European Review of Labour and Research, 23(2), pp.135-162.
Herman, R.E., 2004. Strategic planning for the impending labor shortage. Employment Relations Today, 31(1), pp.19-24.
Horney, N., 2016. The gig economy: A disruptor requiring HR agility. People and Strategy, 39(3), p.20.
Lowe, M., 2017. Uber’s Gambit: Reassessing the Regulatory Realities of the ‘Gig Economy’.
Prpi?, J., 2016. Next Generation Crowdsourcing for Collective Intelligence. Browser Download This Paper.
Schiemann, W.A. and Ulrich, D., 2017. Rise of HR—New mandates for IO. Industrial and Organizational Psychology, 10(1), pp.3-25.
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