despite greater scrutiny by authorities, the gig economy is set to transform talent acquisition

February 17, 2016 Vinos Samuel

Embrace gig workers in your talent strategy with minimal risk.

Anyone who has ever used Uber’s car service can attest to its convenience and reasonable costs. Just as remarkable is how the company has helped transform the gig economy all over the world, enabling drivers everywhere to create flexible work schedules that suit their lifestyles. Uber’s success has led to a deluge of copycats and other on-demand talent platforms, including Lyft, Upwork, 99designs and others. As a result, most economies have felt the impact of the gig workforce.

According to McKinsey, online talent platforms could add as much as USD $2.7 trillion or 2% to the global GDP by 2025. At the same time, it could add 72 million full-time equivalent positions. Staffing Industry Analysts’ (SIA) estimates that in 2014, online talent platforms processed between USD $8.9 and $11.1 billion in spend. PwC estimates that by 2025, the five big sectors ofthe sharing economy, which include online staffing, will reach $335 billion. 

All signs point to continued strong growth in online gig employment as workers and employers enjoy the scalability and flexibility of the model. And as a definitive indicator of the growing influence of the gig economy, some governments around the world are more closely tracking the use of contingent talent.

"With new work models in place governments look to clarify how to classify talent in the sharing economy" 

As a talent leader, have you explored how app-driven talent may provide more agility and cost advantages to your operations? Your business may reap significant gains through greater use of on-demand talent. But before you make large-scale changes to your talent strategies based on gig employment, keep in mind the growing concerns of government regulators about this type of work arrangements. As a result, more authorities around the world have or are looking to protect worker rights through greater regulations.

With millions now joining the gig economy, protecting workers is now an issue that has taken center stage among many government and non-government entities also. For example, the World Bank and the International Labor Organization last year jointly published a new study entitled “Balancing regulations to promote jobs: From employment contracts to unemployment benefits,” which examines the evolution of work arrangements around the world among other labor market developments. The document is intended to help governments implement better worker protection while ensuring their efforts don’t impede job growth. It’s an example of the reaction to rising concerns among policy makers.

With so much uncertainty over the regulation of gig employment, should your organization wait for more clarity before fully embracing this work arrangement?

The answer depends on the skills you seek, where you source them and the platform you utilize. While many authorities are reviewing how the on-demand economy is impacting their workers, few so far have set out to regulate them. One reason is that app-driven employment is a relatively new phenomenon and still accounts for a small percentage of overall employment in most countries. Another reason is many workers seem to prefer this type of employment for its flexibility and potential rewards.

Some skills you may need are unlikely to ever be regulated as they are highly global and can be performed in any location. While Uber requires the physical presence of the driver, a site such as 99designs doesn’t. This portal for graphic designers sources talent from around the world and allows employers to choose workers they like best, regardless of location. If the skills you seek is one of those that can be performed anywhere, future regulations are unlikely to affect this type of work arrangement.

Finally, choose your gig service platforms wisely. Conduct due diligence into whether a service has already been accepted in the locations relevant to you. Innovators bring excitement and unique offerings to the talent market, but their legal status may be unclear. As a talent leader, you should balance your need for innovation against potential risks and compliance concerns.

Support from an MSP partner who has expertise in this domain of contingent workforce management will be ideal as they can bring in global case studies specific to your requirements and strategically help plan the skills that can be procured, identify risks and advise how to mitigate them and provide governance and intelligence on the various gig platforms available. In the market today, MSP providers are increasingly investing in these platforms and, hence, are closer to new technologies/services that can be leveraged in a partnership. In APAC, we are seeing contingent workers being procured through these platforms for roles such as data entry, marketing communication, content design and even some app development/testing. Some IT clients are at the forefront in this initial phase of experimentation.

The on-demand gig economy is poised to make a significant impact on talent markets everywhere, affecting your business whether you are in Bombay or Berlin. Your talent strategies should fully embrace these workers to help your business become ever more agile. As long as you investigate potential risks and develop a sound game plan, you will be able to safely add great resources to your workforce.

To read more about the top 30 trends shaping the world of work, download our Randstad Sourceright 2016 Talent Trends Report.

About the Author

Vinos Samuel

Vinos is MSP, Senior Manager - APAC, Randstad Sourceright, He heads up the operations and delivery of multi-country MSP programs across Asia. This includes the management of one of the region’s largest MSP programs for a leading international banking institution. He is a BPO and recruitment outsourcing specialist with more than 11 years of experience across Asia Pacific. He has expertise in program management and optimization, supply chain management, and technology deployment.

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