Wednesday, July 11, 2018

HR and the Gig Economy

Not long ago I made a decision to leave my executive job and embrace the gig economy.  I had a number of personal reasons for doing this that you can read about here, but the main reason was that I could.

What changed – besides a growing desire to define a new deal for myself – was the epiphany that organizations have problems they need solved but don’t always have the skills or the headcount to solve them.  

I experienced this first-hand in my previous role, in which I led a global team of FTEs but also brought in fixed term contractors to help with everything from content and customer marketing to maternity leave coverage to organizing our sales kick-off event.  

This article is not about replacing FTEs with contractors, or even about creating the right mix of internal and external talent, a great topic in its own right.  What I’m talking about here is the difference working with contractors makes to a line manager when it comes to working with HR... because it changes everything.

‘I need more headcount’

Consider the following scenario: You lead the content team at a medium-sized global organization and your team’s responsible for rolling out three large global campaigns, including key messages, headlines, content, thumbnails and a full social media plan.  Your global content team consists of three people, one of whom has been co-opted to support the field marketing organization in your largest market.  How are you going to create all that content? 

You talk to HR and long story short, there's no headcount.  Now, you can either continue to plead your doomed business case or use part of your operating budget to hire a contractor instead.

IT is dead.  Long live IT.

I don’t know if you remember what happened to IT when cloud computing changed the business application market forever, but the biggest change had less to do with technology than with how IT organizations were impacted.  Suddenly, global software projects were no longer controlled by IT because solutions were designed to be selected, implemented and used by business users. 

At the same time, the subscription model for cloud-based applications meant departments could pay for them out of their operating budgets.  Modern solutions were easy to use and included visual reports at the touch of a button, with amazing drilldown capabilities, and business users could even build their own.  Best of all, they were designed to be quickly implemented with no more upgrades!

In short, cloud computing left departments free to innovate and try new things without waiting for IT to catch up on the backlog of upgrades and issues created when the the current solutions were rolled out. 

So, what did IT do?  Something quite brilliant, actually.  They regrouped, downsized and transformed themselves into a service organization.  As point solutions popped up like mushrooms across the business, they demonstrated a new kind of value managing a complex ecosystem of solutions and responding to the business more promptly when special cases came up.  After a brief struggle against the inevitable move to the cloud, IT embraced the new reality and discovered it’s a lot more fun to be a hero than a gatekeeper. 

Embracing the Gig Economy

What does this have to do with HR?  Two things: First, HR has already responded to the call of the cloud but still has some work to do helping leaders acquire, develop and retain great talent.  Second, the gig economy will again change everything for HR, because the entire workforce composition will change.

Current cloud-based HR applications may not be able to keep up, because while they were designed for the cloud – some more than others - they may not have been designed for the gig.  In other words, if all that fabulous employee data you’ve been collecting only describes part of your actual workforce, you have a major blind spot.

But that’s not all: Just as the cloud enabled departments like HR to get around IT, the gig economy lets department heads go around HR.  For starters, consider how much easier it is to bring in a contractor than it is to hire someone.  It’s also cheaper because it’s on demand and you don’t have to pay benefits or invest in career development.

Working with contractors creates its own challenges but if it’s easier - not to mention cheaper -  for managers to bring in contractors, guess what they’ll do.

Also note that more skilled workers are choosing the gig economy, either because they’re having difficulty finding a permanent role, or because they want to spend less time jumping through administrative (or political) hoops and focus on the work they love doing.

So, the gig train has left the station but HR still needs to climb aboard.  Just as the introduction of cloud-based point solutions enabled IT to step in and propose a more coordinated IT ecosystem, having contractors popping up all over the business costing money and doing ‘something’ presents a golden opportunity for HR.  

If you'd like to read more, I've written a follow up post here about how HR can step up and be... GIGantic.

Thanks for reading.

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