The Gig Economy: What it means to you

If Necessity truly is the mother of Invention, today’s “gig economy” is the sibling of rising health care costs. Companies had to find a way to address rising costs and to further insulate itself against the effects of market uncertainties, and free-lance employment provided the quickest solution. Add to that a generation of displaced college students who couldn’t find work during the 2009 recession (now referred to as the “crunch generation” or “lost grads”) and the so called “gig economy” provides an opportunity for budding professionals needing to establish themselves in business.

SHRM President Henry Jackson, addressing attendees of the 2016 SHRM Annual Conference, identified the “rise of freelance workers” as one of the top five employment trends going into 2017. Some of the reasons for its popularity are obvious: telecommuting has never been easier, with video streaming becoming a more commonplace meeting platform, and companies wanting to create a more diverse employment base can now easily recruit and hire from other nations as well as from other regions across the U.S.

When does a “trend” move to “mainstream” status? Studies indicate, and experts collectively estimate, that at least 40% of the workforce will soon be comprised of independent contractors.

But what Necessity drove the trend? Why are we, as a nation, changing our hiring practices? On-demand staffing and talent pool sampling to meet specific project needs are ways in which businesses say they are responding to the cost burden of health care mandates. Field Workplace and Future Nation completed a 2016 survey of 300 H.R. decision makers and 959 freelancers. The findings:60% of companies plan to hire more freelancers than full-time employees [in 2017] and 45% expect to increase their hiring of freelancers by 30% or more. Nearly a third expect to continue to hire relatively more freelance workers by 2020.” The blended workforce has shifted from fad to trend to mainstream status. Why? 68 percent of companies surveyed said that the Affordable Healthcare Act had “a high impact on hiring more freelance workers and, as a result, 74% will contract with more freelancers.”

What it means for you: Ideally, a gig-economy creates opportunities for employees as well as employers, and for seasoned managers as well as entry-level workers. With a diverse workforce working from remote locations, the ability to manage without geographical borders is now a critical skill in high demand. Those managers and H.R. executives wanting to solidify or further their futures might consider a continuing education seminar conducted by a telecommunications company to learn the technical ins and outs of creating and overseeing an effective blended workforce. Likewise, today’s workers won’t have to rely solely on in-house promotional or bonus opportunities to increase their earning power. The gig-economy offers countless opportunities to add project employment during “off hours” from work.

Taking a macro-look at the nation’s economy, on-demand free-lance opportunities may help buoy the next recession’s “downsized” workers in a way that the traditional employment market has never been able to, creating a mercurial response to labor needs across sectors. However, one downside of the gig-economy is the retraction of company-sponsored healthcare – the very precept the government was attempting to legislate. Now, Necessity will turn its innovative eye to finding new solutions for the growing need for a new form of accessible coverage.

We all are watching to see how government – and business — will respond, and that may well be the number one employment trend discussed at the next SHRM Conference.

About Jody Glynn Patrick

Jody is President of Glynn Patrick & Associates, which provides management consulting, executive coaching and strategic planning services. She is Publisher Emeritus of In Business magazine, which she published for 17 years. Selected as the “U.S. Business Journalist of the Year” in 2007 in Washington, DC, by the U.S. Small Business Administration, Jody has been a business reporter, editor, radio talk show host , and has won other state and national journalism awards. At the same time, she has helped corporate clients grow their businesses -- the basis for her practical coaching advice here. She also was the 2005 Athena Award recipient for her leadership role in mentoring other professional women. Jody will be talking with you weekly on TDS’ blog to share her insights and tips from the C-Suite perspective. Follow on G+.

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