Thu Aug 03 2023
Founders & Tech Leaders

Rethinking Talent Management for The Gig Economy

Soha Rajput
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The modern workforce is rapidly changing due to the emergence of the gig economy, where temporary or contract jobs are prevalent. This new approach to work has paved the way for the rise of entrepreneurship, where individuals take control of their future careers by starting their businesses. As a result, traditional talent management practices are becoming outdated, and a new approach is needed to attract, retain, and develop top talent.

The new talent and project management approach emphasizes flexibility, agility, and customization, focusing on building a culture of entrepreneurship within the organization.

What is Gig Economy?

The gig economy refers to a labor market where short-term contracts or freelance work are the norm. In this economy, individuals work for multiple employers rather than being employed by one organization. According to a study by Upwork, a leading freelancing website company, 36% of the US workforce is freelancing. This figure is projected to grow to 50.9% by 2027. The gig economy has also expanded to include individuals starting their businesses.

In fact, according to a report by the Global Entrepreneurship Monitor (GEM), there were approximately 582 million entrepreneurs worldwide in 2019. The report also noted that the entrepreneurial activity rate (the percentage of individuals starting or running a new business) varied significantly by region, with Sub-Saharan Africa having the highest rate at 28%, followed by Latin America and the Caribbean at 16%.

Rise of Entrepreneurship

The emergence of the gig economy has given rise to a new era of entrepreneurship. With the traditional employment model replaced by short-term contracts and freelance work, individuals are taking control of their careers by starting their businesses. This shift towards entrepreneurship is reflected in the 2021 Global Entrepreneurship Index, which ranks the US first in the world for the quality and quantity of entrepreneurship. This ranking is based on several factors, including the level of innovation, the ease of starting a business, and the availability of resources to support entrepreneurship.

Rise of Entrepreneurship - Job Market

According to the report, 27 million Americans are starting or running new businesses, which is expected to continue as the gig economy expands. Many individuals are drawn to entrepreneurship because it offers the flexibility and autonomy to work on their terms. They can pursue their passions, set their schedules, hire, and take control of their financial futures.

Entrepreneurship is not limited to a specific age group or demographic. It is a viable option for anyone with a business idea and the drive to make it a reality. The rise of entrepreneurship has been especially significant for women and minorities who have historically faced barriers to traditional employment opportunities. With entrepreneurship, these individuals can create their paths and break down the barriers that have held them back.

The rise of entrepreneurship is a positive trend for the future of the workforce. It gives individuals more career options and flexibility while contributing to job creation and economic growth.

Factors Driving Gig Work in the World

Entrepreneurship is rising due to several factors driving individuals to start their businesses. These factors include a desire for flexibility and autonomy, technological advancements, and access to funding and resources.

Factors Driving Gig Work in the World

Entrepreneurship is rising due to several factors driving individuals to start their businesses. These factors include a desire for flexibility and autonomy, technological advancements, and access to funding and resources.

1. The desire for flexibility and autonomy

Many employees, especially younger workers, are seeking greater flexibility and autonomy in their work. Starting a business or working as an independent contractor gives them more control over their work schedules, locations, and work type. It also allows them to pursue their passions and create their work-life balance.

2. Technological advancements

Technological advancements have made it easier for entrepreneurs to start and run their own businesses. For example, digital platforms have enabled businesses to reach customers worldwide, and cloud-based business tools have made collaborating and managing projects from anywhere in the world easier.

3. Access to funding and resources

Access to funding and resources is also a key factor driving entrepreneurship. Many companies and organizations are looking to hire short-term or contract workers, which creates opportunities for entrepreneurs to offer their skills and services. Additionally, multiple funding sources are available, including crowdfunding, angel investors, and venture capitalists, making it easier for entrepreneurs to raise capital to start and grow their businesses.

Overall, the future of work is changing, and entrepreneurship is becoming an increasingly attractive employment option for workers seeking greater flexibility and control over their careers. As more companies and employers recognize the benefits of working conditions with independent contractors and co-founders, the talent pool for new businesses is expanding, and the potential for success is growing.

The Traditional Approach to Talent Management

Traditional talent management practices include recruiting, employee onboarding, performance management, and succession planning. These practices ensure managers and employees have the necessary skills, knowledge, and experience to meet the organization's goals and objectives.

Recruiting involves identifying and attracting candidates with the skills, experience, and personality traits required for the job. Once hired, employees undergo an onboarding process where they are trained on the company's policies, culture, and procedures. Performance management involves setting goals, providing feedback, and conducting performance evaluations to ensure that employees meet or exceed expectations. Finally, succession planning involves identifying and developing employees who have the potential to fill key leadership positions in the future.

Problems with the Traditional Approach

The traditional approach to talent management has several problems. First, for example, it assumes that employees will work for the organization for an extended period, which is no longer true in the gig economy. Employees in the gig economy often work for multiple employers, making it difficult for organizations to retain top talent.

Read more about factors contributing to employee retention and loyalty.

Second, the traditional approach blended workforce is not flexible enough to accommodate the changing needs of the workforce. The traditional approach blended workforce also does not account for the growing number of individuals starting their businesses. Freelancers and entrepreneurs have different needs and motivations than traditional employees. They require a more flexible approach to talent management, focusing on their unique skills, preferences, and work styles.

The Limitations of Traditional Talent Management in the Gig Economy

The limitations of traditional talent management practices are even more pronounced in the gig economy. Freelancers and entrepreneurs comprise a significant portion of the gig economy workforce and have different needs and motivations than traditional employees. They require a more flexible approach to talent management, focusing on their unique skills, preferences, and work styles.

For example, freelancers and entrepreneurs may prefer to work on a project-by-project basis rather than committing to a long-term position. They may also prefer to work remotely, requiring organizations to have the necessary technology and infrastructure to support remote work.

The traditional approach also does not account for skill gaps in the gig workforce. As gig workers, independent contractors, and freelancers often have specific skill sets, organizations may need to source talent from various digital platforms and blended workforces to find individuals with the right expertise. In addition, gig workers may have different perspectives and innovative ideas that can drive performance and improve the customer experience. Still, traditional talent management may not be equipped to take advantage of these unique contributions of a gig worker.

The Need for a New Approach to Talent Management

The traditional approach to talent management has been based on a hierarchical structure where employees work for different individuals within the performance management of a company for an extended period, often for years or even decades.

The gig economy has created a new breed of highly skilled and independent workers who value autonomy, flexibility, and work-life balance. They are less interested in traditional employment benefits such as job security, healthcare, or retirement plans. Instead, they are employers that prioritize personal and professional growth opportunities, meaningful work, and positive company culture.

Companies need to adopt a new approach to talent management to attract and retain top talent in the gig economy. This approach should be based on collaboration, transparency, and flexibility. Companies must be willing to offer unique benefits and opportunities to meet the needs of these independent gig workers too.

Here are some key elements of the new approach to talent management:

1. Building a Strong Employer Brand

Building a Strong Employer Brand

To attract top talent, companies need to have a strong employer brand that emphasizes their company culture, values, and mission. This brand should resonate with independent workers and reflect their priorities and expectations.

2. Providing Flexibility

Employees value flexibility in their work schedules and location. Companies should offer flexible work arrangements that allow workers to balance their personal and professional lives.

3. Offering Opportunities for Growth

Gig workers seek personal and professional growth opportunities. Companies should offer training, mentoring, and other resources to help workers develop their skills and advance their careers.

4. Promoting Collaboration

Gig economy workers value collaboration and teamwork. Companies should create a culture that fosters collaboration and encourages independent workers to work together towards common goals.

5. Providing Unique Benefits

Gig jobs

Companies should offer unique benefits that appeal to gig economy workers, such as access to co-working spaces, professional development opportunities, and other perks that support their entrepreneurial aspirations.

The Role of Technology in the New Approach to Talent Management

In recent years, technology has transformed how companies manage their talent. This transformation has been particularly evident in the gig economy, where workers are employed on a short-term or contract basis. Technology has enabled many businesses to source and manage talent innovatively in this context.

Technology's Impact on the Gig Economy

The gig economy has been one of the major beneficiaries of technology's impact on talent management. With the rise of platforms like Uber, Lyft, and TaskRabbit, gig workers now have more flexibility. They can choose when they work, where they work, and which jobs they take on. This flexibility has been a major draw for freelancers and contractors, who value the ability to set their own schedules and work on various projects.

Technology's Role in Talent Management

In addition to its impact on the gig economy, technology has played a key role in talent management. Companies use technology to source, assess, and hire workers more efficiently. For example, they can use machine learning algorithms to analyze resumes and predict which candidates will most likely succeed. They can also use video interviews to screen candidates more quickly and reduce the time-to-hire.

Examples of Technology-Driven Talent Management Tools

There are many examples of technology-driven talent management tools that companies are using to improve their hiring processes. One such tool is applicant tracking software, which allows recruiters to manage job postings, resumes, and applications in a single platform. Another is talent analytics software, which helps companies identify skills gaps and create targeted training programs to bridge those gaps. There are also tools for onboarding new hires, such as digital employee handbooks and online training courses.

Challenges and Opportunities of the New Approach to Talent Management

The new approach to talent management has brought about a significant shift in how companies approach their workforce. While this new approach presents many opportunities for success, it also comes with its own set of challenges.

1. Challenges of Implementing the New Approach

1. Finding the Right Talent: As companies look beyond their traditional workforce and consider gig workers, finding the right talent becomes challenging as they are in high demand. Employers must ensure they have access to a diverse pool of talent that can be a blended workforce with the necessary skills and experience to get the job done.

2. Short-term vs. Long-term: Most companies choose to work with full-time employees instead of independent freelancers as the new model with gig work is often project-based, leading to challenges for employers who must ensure project continuity. Companies need to find ways to manage short-term workers while ensuring that they have a long-term plan, just like their full-time employees.

3. Knowledge Gap: Employers may struggle to identify the right talent to fill their needs due to a knowledge gap in emerging technologies or new ways of working. Companies should focus on training and upskilling their current workforce while seeking external resources to overcome this.

2. Opportunities Presented by the New Approach

1. Access to a Larger Talent Pool: With the rise of the gig economy, companies now have access to a much larger talent pool than ever before. Therefore, it has a high chance of having highly skilled contract workers and freelancers who may not have been available.

2. Greater Flexibility: The new approach to talent management allows for greater flexibility in how companies structure their workforce. It may include more part-time and remote workers, contract workers, and freelancers.

3. New Opportunities for Value Creation: It presents new opportunities for value creation, as companies can tap into the expertise of contractors and freelancers to innovate and drive growth.

3. Strategies for Overcoming Challenges and Leveraging Opportunities

1. Build a Diverse Talent Pipeline: Companies should actively work to build a diverse talent pipeline that includes both traditional and non-traditional workers. It can work by building relationships with gig platforms, attending job fairs, and partnering with universities.

2. Implement Long-term Talent Strategies: Consider a long-term talent strategy in place that takes into account their short-term needs as well as their long-term goals. It can include implementing training and upskilling programs for current employees and building relationships with contractors and freelancers who could become long-term employees.

3. Focus on Collaboration and Knowledge Sharing: Companies must create an environment that promotes collaboration and knowledge sharing between traditional and non-traditional workers. This can be achieved through cross-functional teams, mentoring programs, and open communication channels.

Bottom Line

It can be difficult to navigate the shift towards a more gig-based workforce. Still, businesses can benefit from the flexibility and access to a wider pool of talent that it offers. With the help of technology-driven tools, companies can more effectively manage and leverage their talent while providing workers with new opportunities for success.

By offering a platform for businesses to hire remote workers and manage their projects, Remotebase is helping to break down geographical barriers and connect employers with top talent worldwide. With Remotebase, you can tap into a global workforce of skilled professionals with a 2-week free trial and no-upfront charges.

As the future of work continues to evolve, it will be crucial for companies to embrace the new approach to talent management and leverage the opportunities it presents.

Frequently Asked Questions

How can technology help with talent management in the gig economy?

Technology can enable businesses to find and hire talent more efficiently, manage remote workers, and provide tools for communication, project management, and performance tracking.

What are some challenges of the gig economy for workers?

Workers in the gig economy often lack job security, benefits, and predictable income. They may also face isolation, burnout, and work-life balance challenges.

Why is talent management important in the gig economy?

With more workers operating outside of traditional employment structures, finding, hiring, and retaining top talent can be challenging. Effective talent management is key to building a successful business in the gig economy.

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