Why Employers Need a Plan to Manage Gig Workers
Roughly 15 years ago, Fatime Doczi was a temporary worker at Johnson & Johnson, the global manufacturing giant.
“The company did a great job with its contingent workforce,” recall Doczi, now CHRO at ZeroChaos in Orlando, Fla., which provides its global clients with up to 20,000 contingent workers each year. “I onboarded, got my badge, and was looked at as a Johnson & Johnson employee. I had access to their systems and learning and development tools. I was part of the company.”
Last year, employers relied on nearly 6 million contingent workers—those who did not expect their job to last—to fill in work gaps or complete a wide variety of projects, according to the Bureau of Labor Statistics. Although the number of employers taking advantage of their expertise and niche services has been steadily rising over recent years, most of them don’t adhere to any strategies to manage them.
A 2018 Deloitte survey on contingent workers—The Workforce Ecosystem: Managing Beyond the Enterprise—revealed that only 42 percent of respondents stated that their organization is primarily composed of salaried employees and that they expect to use more “contract, freelance and gig workers over the next few years.” Meanwhile, the survey also found that the percentage of workers across all generations and skill levels—40 percent—who currently participate in alternative-work arrangements rose by 36 percent since 2013.
Despite this increase in gig workers, only 16 percent of survey respondents have established management policies or practices for such workers. Their skills and knowledge notwithstanding, contingent workers still need “support, guidance and performance measures if an employer wants to optimize the mix,” states the report.
“Organizations need to begin thinking about their workforce as much more of an ecosystem that’s unleashed and begin to set up systems, processes, programs and a management style in a way that accommodates them,” says Steven Hatfield, global leader for future of workforce initiatives at Deloitte. “This is a real opportunity for organizations to think of a strategy that can attract, retain or curate contingent workers.”
There are approximately 77 million identified freelancers throughout Europe, India and the U.S., he says, who want flexible and exciting jobs that interest them. Therefore, he says, give them something meaningful to do, offer an agile environment, make it easy for them to “plug in” to get their work done, establish clear goals and objectives, and design a rewards strategy that recognizes their achievements.
“It behooves HR leaders to think about these different talent models and to take advantage of them,” Hatfield says. “There’s a real business value to understanding how to work with this particular talent segment because of the skill set and expertise you can access.”
Many HR professionals have fallen behind in developing such strategies because the question of “ownership” of contingent workers is unclear: Is it HR, procurement, IT or maybe finance? This is no longer just an HR concern, Hatfield says, but a companywide issue.
HR can tackle this challenge by developing a gig-worker strategy that’s aligned with the company’s business strategy and then train managers on creating an inclusive culture for contingent workers, says Jeanne MacDonald, president of RPO at Korn Ferry.
“It could really help them manage that labor more effectively, more strategically,” she says.
Still, don’t ignore the onboarding process, she says. Provide gig workers with a company email address so they feel part of the organization and explain how they can access tools and online information needed to perform their job, adds MacDonald. Include them in team calls and staff meetings and schedule check-in conversations. Whenever possible, give them quarterly reviews. Once you understand these workers’ motivations, she says, you can also support them in accomplishing their goals, which often leads to better job performance.
“A gig economy has taken a lot of employers by surprise at how many gig workers they have,” says MacDonald. “Know why this happened and manage it. Don’t let it manage you.”
The HR function never really had a good “hold” on contingent workers, Doczi says. Since they now represent a larger portion of the workforce, she says, it’s important for HR to tailor performance-management systems for gig workers, ensure you and your gig vendors are in sync and provide mobile platforms that allow such workers to efficiently do their jobs.
Equally important, Doczi adds, is applying the same management strategies for your employees and contingent workforce.
“The CHRO has to better manage this workforce in the future with more oversight and not just make this a cost-effective strategy,” says Doczi. “Younger generations want more flexibility and don’t want to be stuck in a corporate office for 14 hours. We need to figure this out and how to make it work. We don’t have a choice.”