The rise of Gig economy: a challenge for HR professionals
The
Gig economy is a labor market that is based on the short term contracts of
freelancing jobs rather than permanent jobs. As compared to the regular
salaries, workers get the amount in return of the gigs, they perform.
Traditionally, jobs in the gig economy were courier services, ride hailing
services, freelance journalism, etc. However, online platforms such as upwork, fiver, freelancer, etc. bring new impetus in the economy.
Information technology has connected the employers and employees through these
online platforms. Most of the people work in the software development, creative
and multimedia sector, sales and marketing support services, writing and
translation services, clerical and data entry and other professional services.
According to online labor index 2017, Asia by far dominates the freelancing
market globally with India at the top, Bangladesh on the second, while US on
the third place. Affordable labor, a highly-skilled and technical workforce
compel the companies to look to hire freelancers.
There
are several benefits associated with the gig economy not only for the employees
but for the employers as well. Employers prefer to hire freelancers for these
skilled jobs, as they don’t have to pay fixed salaries. They also able to
decrease their fixed cost by hiring the freelancers, when there is work.
Employees also feel autonomy, flexibility, and better control of work life
balance.
Though,
companies are relying increasingly on contingent labor forces, such as
freelancers, consultants, and temporary workers however, these workers are not
part of the regular talent pool of the company. Therefore, companies usually don’t
invest to retain them. On the other side, freelancers get involve in pseudo-employment
without getting payments for redundant work, paid leaves, or other employment benefits.
This
phenomenon of gig economy is also making HR professionals irrelevant due to the
change in the traditional mode of hiring, training, and compensating the
employees, as most of the online platforms are managing the workforce on employers’
behalf. According to the survey
of 2017 conducted by upwork,57.3
million Americans are freelancing (36 percent of the U.S. workforce). As the
gig economy is continuously rising, there is very much likelihood that this
mode of employer-employee relationship has to stay. The popularity of gig
economy would create challenges for hiring and retaining the right persons at
affordable cost. Therefore, there is a dire need of the hour for HR professionals
to carve out the strategies to make the work more attractive for the young
professionals by incorporating autonomy, flexibility, and better control of
work-life balance to stay relevant with the upcoming trend.
