Millennials are leading the way in the gig economy – a system whereby work is contracted on a freelance short-term basis and often uses technology to connect workers and users. Whether as a response to a decrease in the number of traditional employment opportunities or a desire to work more flexibly, the self-employment statistics continue to grow each year. PWC has reported that around 50% HR professionals believe that at least 20% of their workforce will be contractors or temporary workers by 2022. Millennials make up a majority of the self-employed workforce and, while the gig economy represents an opportunity to work innovatively and flexibly, it also has its drawbacks.
For many, the gig economy allows for working where and when you want to, maximising potential output and permitting a more desirable work life balance. Businesses are beginning to recognise that harnessing the self-employed workforce can have major advantages, with more than 25% of SME businesses welcoming gig economy relationships. Gig or freelance work tends to operate on a project by project basis, offering immediate solutions at increased productivity, and at a lower cost than hiring a full time employee. Additionally, freelance workers beat out traditional employees in job engagement and innovation. As more and more of the brightest new talent moves towards flexible working, it is in an organisation’s best interest to adapt to the changing nature of employment – a responsibility that lies with HR.
As millennials increasingly move toward a work life balance that allows them to take control of their careers, HR must work out ways to cater to these new working dynamics. For example, while gig economy workers enjoy the freedom that comes with contract work, they lack the security benefits of a full time role, including sick pay and pensions. This freedom also means that contract workers are likely to feel less committed to organisations, leading to a potential dip in company culture and comradery. It is up to HR to form new strategies on integrating gig economy workers into businesses and adapting to a work environment that allows for flexibility and a faster turnover of employees. Crucial to this is a shift in mind set for businesses to view the gig economy as a resource of untapped talent, rather than a way to cut costs and exploit the flexibility of freelance workers.
The gig economy is likely to increase in influence in the years to come, signifying a unique opportunity for HR leaders to pave the way in innovative and forward thinking solutions that benefit both gig workers and traditional employees. Only then will businesses be able to take full advantage of the benefits offered by gig workers, while also ensuring their rights and wellbeing are protected. With an emphasis on these areas, the business community can look forward to a seamless transition into a new era of employment.