Prepare for the Future of Work: Adapting to the growth of the gig economy

Welcome to the second post of my series about preparing your organization for the future of work. In each post, we look at a data-based trend that is or will be disruptive to work as we know it. In the first post, we talked about the decline of trust. Today, we’ll explore a trend that is fundamentally challenging what it means to be employed—the growth of the "gig" economy.

Future of Work Trend #2: Growth of the “Gig” Economy

It’s likely that you know at least one person, if not several, who work as an independent contractor. That person may do work for one company or several. You probably also know several people who have a “side hustle” (work they do in addition to their regular full-time job). They might design webpages, walk dogs, or teach piano lessons on the side.

These people are participating in what many describe as the “gig economy.” This term came into popularity over the past decade to describe the growth of contract, freelance, and temporary work opportunities. The existence of gig work isn’t news. What’s significant is the scope and pace of growth of gig work and how it may change the nature of your workforce in the future. 

According to Freelancing in America 2017, an annual research report commissioned by Upwork and Freelancers Union, over 57 million people (or 36% of the workforce) in the United States are currently freelancing in some capacity. The chart on the right shows the distribution of these freelancers by the type of work. This study reveals that while a third of people are already freelancing in some way, the number of people freelancing is growing at three times the rate of the overall workforce since 2014. The authors of this study predict that within 10 years, over half of people will be freelancing in some way.  

What does the growth of the gig economy mean for organizations?

Technology is enabling a change in how we think about work. Many kinds of work are no longer attached to place or time. The internet has also allowed for a marketplace to exist where buyers and sellers of freelance services can find one another. Platforms like Fiverr and Thumbtack are making this process easy and efficient for the people on both sides. As employers, this trend is important for a few reasons.

Employees have more options for how to earn a living than ever before. Traditional, full-time employment isn’t going away anytime soon, but employees now see options. In particular, those individuals who are most skilled in highly portable jobs like design, programming, marketing and others will have the most options. Talent retention will become even more challenging than in the past.

On the other hand, some of the most valuable talent in the future may only be available through contract or freelance relationships. Employers need to grapple now with how to create a work experience where both employees and contractors can collaborate and create great work together.  

How can we prepare for the future of work, now?

Most work experiences and practices today are designed with the full-time employee in mind. The future will require that you create an experience that engages workers of various types including full-time, part-time, contract, temporary, and project-based freelancers.

Here are a few suggestions to consider as you begin preparing your organization: 

1. Adopt a broader view of employee engagement. One thing I’ve commonly heard over the years through employee engagement surveys is that part-time and contract employees often feel like they are treated like “second-class citizens.” If you aren’t full-time in some organizations, it’s easy to feel like you don’t really matter. 

To thrive in the gig economy, every person you pay to do work should feel like they matter and are important to your success. HR can play a significant role in ensuring that each individual feels supported and valued by providing a consistent experience across all employee types.

While it may be tempting to think that fewer traditional full time “employees” will mean less effort towards engagement, it’s actually the opposite. Freelancers and part-time workers will come and go over time which means you have the opportunity to impact more people, not less. The experience they have when working for you impacts the quality of their work and also their desire to do work for you in the future. A great work experience can also turn a freelancer or part-timer into an advocate and champion for your brand.  

2. Design work for flexibility and autonomy. One common reason people cite for pursuing freelancing work is to “be their own boss.”  This is fueled by the desire to work when they want, where they want, and how they want without someone breathing down their neck. It’s about having the personal agency to make choices related to how work gets done. They jump to freelancing because they aren’t getting this kind of opportunity at work.

Review your current workplace rules and policies. Challenge any limitations currently in place that restrict an employee’s choices about when, how, and where they do their work. If there’s not a legitimate business reason for the restriction, consider loosening or eliminating it. This may also require a shift in management approach and practice. Creating true autonomy requires managers who are leading with clarity and trust versus control and micro-management.

3. Experiment with "gigs." If your organization doesn’t have much experience using contract or freelance workers, now is a good time to start. Look for opportunities within projects to supplement with different kinds of workers. As you do so, use the experience as an opportunity to learn and experiment. Ask those who you engage for both suggestions and feedback. “How could we have made this a more engaging experience for you?”  

It’s not a matter of “if” the rise of the gig economy will disrupt your organization, it’s a matter of “when” and “how much.” Understanding this shift and why it is happening will allow you to shape your organization in a way that is friendly and attractive to those who want to gig so you can retain your best employees and attract the best freelance help in the future.