The Contingent Economy: More than a "Gig"

07/21/2016 10:59 am ET Updated Jul 22, 2017

The latest overused buzzword may be the "gig economy." I can feel the eyes rolling, but the truth is it's a part of our new reality. And while you might immediately think of the Uber or Lyft driver, or the temp across from you in the office, the definition covers a much broader set of jobs, which has created some misconceptions around what it means for managing your entire workforce.

In research from Princeton and Harvard Universities that examined the growth of "alternative work arrangements" findings show that independent contractors, workers provided by contract firms, on-call workers (your ride-share drivers) and temporary agency workers have climbed to nearly 16 percent of the workforce from 10 percent a decade ago. With 83 percent of executives intending to hire more contingent or consultant employees in the next three years, according to survey data from SAP SuccessFactors and Oxford Economics, this number will certainly grow, and grow significantly.

Clearly these people aren't all driving us around town. So who are they? Many of them are people who offer their expertise and skillsets in a variety of ways, from specialists to freelancers or contractors, to work on strategic corporate projects. Maybe it's the IT specialist assessing and recommending technology purchases for your business, or the marketing expert you just hired to increase SEO, or the industry analyst auditing the competitive landscape for new service opportunities. The growth of this "contingent" labor category is providing your company with specialized workers who meet very specific needs in a way that drives bottom line growth.

Managing both your contingent and full-time worlds means change for both HR and Procurement. As the contingent labor trend continues to expand, organizations need to think about their total workforce - permanent and contingent - so they can plan for the future by looking at who the right people are for the business regardless of the traditional constraints of salary categories. Managers want to know:

  • How can I get a consolidated view across my workforce, including contractors and consultants, who are providing critical work for me?
  • How do I engage this extended pool of talent?
  • How do I help ensure we have the best talent working on the right things at the right time? And when a job position opens, are we prepared to backfill with the talent we have on hand - permanent employees and contingents alike?

Perhaps the most important question is "where do I start?" The challenge is in managing both permanent and contingent workers in a way that reflects the value they each bring to your business and the value they each bring to your bottom line. Here are my top three areas to consider to help ensure your total workforce is managed to improve productivity and foster a culture of "all-in" people who spur the innovation required in today's fast paced digital world.

Loyalty
Don't assume that simply because contingent workers are temporary they aren't loyal. One of the hallmarks of gig work is that it allows us to dial up or dial back at certain points in our lives, as well as to build our skills and gain knowledge across different industries. Brand affinity absolutely comes into play here. When selecting work options, they are in the driver's seat. What's important is to make these contingent workers feel as valued as your permanent employees through rewards, flexibility and ongoing communication. By creating loyal contingent workers, you reap the benefits of more consistent work outputs, people who are familiar with your corporate practices and reduced costs and time for onboarding.

Of course as you bring contingent workers in closer, don't forget to make your full-time teams feel valued, rather than like a portion of their work was just "outsourced" to a contracted worker. As leaders, we need to create an environment where both groups of workers believe their work is essential to our company's growth as well as their own personal career growth.

Performance Management and Employee Development
Part of being a good leader today is understanding which types of projects and business needs are suited to contingent workers and what is best performed by your salaried employees. By consistently managing both groups and identifying top performers - regardless of temp or full-time status - you'll make more intelligent staffing decisions now and in the future.

Employee development often goes unaddressed with contingent workers because of the "she's / he's just a temp" thinking. We cannot afford to think that way any longer. Permanent and temporary, feedback is critical to successful outcomes. Regardless of how long someone plans to stay, the most productive approach to training and development is offering ongoing, immediate feedback - rather than waiting for an annual performance review or exit interview. Real-time feedback can have a quick impact on performance. Wait until after a project is complete, and it's already too late to impact the outcome. And you'll more quickly risk a damaged relationship on top of a damaged project.

Collaboration
We must break down the silos between our gig workers and the rest of us - physically or otherwise. Provide contingent workers with a workspace within the office where they can interact with other employees, and ensure they have a direct line of communication to permanent employees. Equip business managers with real-time visibility into their total workforce for faster and more insightful decision-making. This collaboration can lead to fresh, outside perspectives for permanent employees, and more insight into your business for contingent workers.

As our workforce becomes more blended, management practices for contingent and full-time should blend as well. To build an "all-in" culture, and stay competitive, have a strategy for your total workforce. Success is, after all, simply human.