Does Your People Strategy Include Gig Workers?

You may enjoy this short interview on how the gig economy is transforming business.

 

Is HR Ready to be GIGantic?

In my most recent post HR and the Gig Economy, I talked about how the workforce is changing as managers staff their teams with more contingent labour.  HBR also wrote a thought-provoking article Run Taskrabbit Run, exploring a not-so-distant future where businesses no longer have employees.  Since my very talented former colleague Stacy Chapman, the CEO of SwoopTalent, has predicted that more doomsayers will write more about this topic… challenge accepted.

I'm actually not a doomsayer, at least I don't think I am.  I personally see the gig economy as an opportunity for HR rather than a threat, at least in the medium term (y’ know, before HR gets replaced by chatbots), because contractors are people.  For too long HR has let procurement own services talent as the proportion of contingent workers steadily increases.  It’s time for HR to step up and reclaim the people agenda.

Here are some of the challenges HR needs to be ready for to stay relevant in the gig economy:

People Data: I know we’re all still high fiving about moving to the cloud, but to prepare for the gig economy, your HR solution needs to track data for contractors as well as employees.  You need to know where your contractors are placed, when, for what, and how much they cost.  You also want to know if they are effective, which will be a challenge since they aren’t included in your performance appraisal process.

Compliance: There are some legal challenges with making contractors feel too much like part of the team - not to mention employment insurance - but someone needs to figure that out for the business.  Who better than HR?  Not procurement, unless HR also wants to share ownership of core competencies, performance management and employer brand.  Yeah, I didn’t think so.  : )

Organizational development: What is the right employee to contractor ratio?  Where should external skills be brought in on a project or fixed term basis v. in-house?  Most importantly, how can HR add real value to this discussion, rather than just consolidating input from different parts of the business?  Own this!!!

Recruiting: HR plays an active role in recruiting talent but not – typically – in acquiring contractors, besides signing the contract with the agency and/or sending over the NDA.  However, just like employees, contractors have diverse skills and personalities, and some will be a better fit than others.  Does HR really want to leave this up to chance, allow mission critical work to go to the lowest bidder, or fail to consider skills augmentation in a broader company context?

Performance and Engagement: Like employees, contractors need to be engaged and assessed for organizational fit and quality of work.  After all, they perform critical tasks for your company, provide a crutch for your company’s core capabilities, and cost money.  It’s important to make them feel like part of the team, help them succeed and establish some metric to assess the quality of their work.  

Skills Development: If we envision a future where most or all of the workforce is project based, at least in some industries, how will HR shape core competencies in that future?  What will core competencies even mean?  And how do you ensure today that skills for hire are also transferred, and that any skills or knowledge gaps your contractors have are addressed so they can work as efficiently as possible?

Leadership: Managing contractors requires somewhat different skills and perspective than managing employees.  It’s HR’s job to make sure managers are ready to lead a truly diverse workforce made up of employees, contractors and non-humans.

Rewards:  As more contractors are brought in to augment teams, compensation equity and company perqs will take on a new flavour.  There’s no one right answer, but plenty of wrong ones, and it needs to be considered in light of what is best for the business.  Ideally, you don’t want rewards to create a divide between internal and external team members, which is what will happen if contractors get treated like second class citizens.

Collaboration: The right collaboration and project management tools can help teams work more productively.  With the gig economy, having the right tools to streamline processes and tasks while linking work to company goals has never been more important.

Internal support: This one has long frustrated me as a hiring manager.  New employees get the red carpet rolled out by HR, a new laptop, a new workstation, etc., whereas contractors need to go on a treasure hunt to find a place to sit and get signed onto the system.  Which the company pays for in lost productivity, frustrated engagement and an hourly rate to boot.

Employer Brand: Just like employees, some contractors are a better fit for your organization than others.  How do you help ensure your organization attracts the best contractors, and equip them to deliver the best results?

So, you get the idea.  As contractors become part of the mix at work, HR needs to start thinking in very real terms how to attract, retain, engage and develop them.  Or… become less relevant to the business as the workforce changes.

Visual courtesy of Business in the Workplace.

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.

Project Social: Trendy HR Trends

Dave Ryan and I were talking last week about what to post about next and I suggested HR challenges.  I made this suggestion partly out of selfish reasons – I was working on an HR trends presentation at the time and was hoping to get a ‘twofer’ out of it – and partly out of curiosity about how he would approach the topic from 'the HR trenches.'

He was all over this idea ('Hmmmn.  That could work...') so here are some cool HR trends to challenge and inspire you in 2012.  Be sure to also read what Dave has to say over at HR Official and Lyn Hoyt also weighed in at The HR Bacon Hut.

Trend #1: Globalisation (aka 'If You Spell it With a Z You're Not Global') – Even if your company isn’t technically global, the global economy impacts you.  Not only can people all over the world consume your products, companies all over the world may be competing for your market share.  If you are a global company with multiple HR systems around the world, your main challenges are probably inconsistent processes and insufficient workforce information.  Inconsistent processes are expensive, inefficient and may lead to compliance violations.  And unless you have a global solution that allows you to track people, work and costs in one place getting timely, reliable workforce information out of multiple systems is a lot like whack-a-mole.  Only in reverse.

Trend #2: Contingent Workers (aka ‘Diversity’ and ‘Who invited all these people?’) – The modern workforce is global, multi-generational, virtual and… 20% contingent!  According to current estimates it’ll be 40% by 2019.  This is a bit awkward for HR since most HR solutions weren’t designed to track contingent workers in a meaningful way.  Which is fine when you only have a few contingent workers but as the percentage of contingent labor approaches 40%  that’s a fairly sizeable knowledge gap.  Where are they?  What do they cost?  What do they do?  Wouldn’t you like to know?

Trend #3: Business Alignment (aka 'Show Me the Money') – Before your eyes glaze over, I read recently that HR people don’t act, talk or think like business people.  What they know is compliance and administration and they hire other people who know compliance and administration.  Ouch.  I've met and worked with plenty of forward thinking and businesslike HR professionals so I’m not sure this criticism is fair but I am sure that business alignment matters.  That means you don’t just roll out training and development, you do so with a higher goal of building critical skills in a particular workforce segment.  You also define success criteria before you do it and you measure how you did after.  It's all about bottom line impact.

Trend #4: Workforce Development (aka 'War for Talent') – Companies struggle with critical skills gaps around the world.  According to a recent Manpower survey only 27% of senior HR executives surveyed felt their business had the talent it needed.  Future business leaders will need a new set of skills, among which being able to lead global, diverse and virtual teams will figure highly.  Companies are considering a variety of strategies, such as tapping into previously underutilized talent pools (working moms, older workers, etc.) with new job deals and incentives as well as overseas assignments and mentoring programs.  Gone are the days of cookie cutter talent management, today it’s all about managing a fast and changeable ‘portfolio’ of targeted talent management strategies.

Trend #5: Sustainability (aka 'Let's Not Kill Our Only Planet') - Corporate sustainability has risen up the ranks on the executive agenda not only as stockholders, consumers and employees drive awareness but also as companies begin to realize the enormous cost of data in terms of physical, human and energy resources.  Sustainability is one of the trends driving Cloud computing adoption since sharing computing resources is significantly cheaper and more efficient.  This is really important but the key takeaway for HR?  The top things that consumers want companies to do when they consider responsible behaviors is treat their employees right by caring for their economic and professional well-being.

Trend #6: Social Media (aka 'Last Friday Night') –With so many people involved with social media platforms, the big challenge for HR and companies in general is that you no longer control your brand.  But for companies that embrace this idea as an opportunity the returns in terms of productivity, community and engagement can be huge. There’s a great write up from Balakrishna Narasimhan (@bnara75) about HR and social media here.  And speaking of Last Friday Night, check out Workday's flash mob video and prepare for some serious flash mob envy.

Trend #7: Engagement (aka 'Prosperity') – We’ve been talking about engagement for so long it hardly feels like a trend anymore but I’m going to go out on a limb and say 2012 is the year companies actually do something about it.  At least, I hope so because disengagement’s expensive.  Whereas not only can an engaged workforce supercharge an individual company it actually has the power to create prosperity, which should be everyone’s goal in 2012. Enough destruction of wealth already, it’s time to create more jobs, get talented people into them and show a little appreciation.  Easy peasy.

Here’s to exciting times ahead!  Are you ready?