Home > News & Events > Gig economy on the rise – Maveric’s Ranga Reddy writes for The Hindu Opportunities page

As businesses move towards a gig economy, there is a need to redefine talent management

With technology being the most important enabler in any business today, organisations have to take a number of related realities into consideration.

One, the difficulty of housing all the necessary technological skills under one roof. Two, the necessity of viewing talent as an investment rather than a cost, and at the same time, avoid investing in talent across all areas at the same time.

Three, the emergence of a global workforce, where proximity to a company’s physical location is no longer a constraint in hiring talent. Four, last, but probably very significant, the advent of the millennial workforce that is technically-gifted, thrives on a dynamic work culture, which helps them upgrade their skills constantly and stay relevant in an economy that cannot be termed as completely stable.

These numerous developments have led to the emergence of a phenomenon known as “Gig Economy”, where companies invest in hiring freelance, part-time, contingent and virtual employees with specialized skills for a period of time. Gig Economy is not a passing fad — already, in the United States, one in three workers are contingent.

It is here to stay as it offers companies with the leeway to choose between areas that need focus and ones that do not; for example, a dilemma between customer-led and technology-led product/service development approach; or to determine the business’s technology investments in the near future such as a choice between blockchain and robot advisory. By using a gig workforce, a company can be flexible in its approach, especially while working on a new offering or service and let go of a focus area which is not making sense to overall business, after thoroughly knowing its ins and outs.

While it might or might not help keep talent costs under control, contingent workers primarily enable companies to hire the best talent in any field and bridge existing skill gaps in their workforce by employing consultants who could build and stabilize a practice for them. For the workers themselves, the flexibility to choose assignments, determine their career and move away from the hitherto company-managed career, are the key takeaways.

An additional advantage is a flexibility to determine the fit of the associate to the organisation and vice versa, rather than starting the relationship on a permanent note, which once again offers companies and contingent workers the opportunity to experiment with what works and what doesn’t.

At the same time, it is a win-win situation as payment will be made for services rendered. The gig model does seem like an ideal solution for current workforce trends and needs; however, there are various challenges that have to be addressed as well:

Balancing act

The impact that a gig economy might have on an organisation’s permanent workforce has to be considered. How do you develop a work culture and environment that is comfortable with highly skilled contingent workers?

The key to managing this challenge is to educate the permanent workers on understanding the existing skill gaps in the organisation and that by bringing in these gig consultants, the company is ramping up skills for the organisation as well as individual employees. It is essential to get across the message that the company is staying abreast of market developments and is keen on ensuring that its permanent workforce is skilled to deal with it and therefore, encourage them to make the best of their temporary association with their gig colleagues.

Ensuring loyalty

The entry of a contingent workforce might also bring forth other issues.

Engaging with a workforce that is temporary and may or may not have interests in the organisation beyond the current project is a challenge that has no concrete answers.

If dealing with millennials, rewards that are more utilitarian, instant, and offer recognition from qualified peers as well as open communication channels that are not mired in hierarchy and structure would ensure continued loyalty from a gig talent one would like to employ again in the near or far future.

Verifying skills

While recruiting contingent workers, there is an ever-present challenge of verifying the professed skills by the candidate as well as protection of confidential intellectual property at the end of their tenure with the company. Talent procurement has to be robust in terms of technical evaluation, intellectual property protection and commercial negotiation to ensure both parties are satisfied with the arrangement.

Unexpected expenses

While gig economy is the trend that is bringing in niche technical talent into IT companies, it is essential that business owners ask themselves if such dynamic staffing is serving their business and corporate needs.

While gig offers flexibility to experiment with new technology, their compatibility with existing business/services, it cannot substitute a concrete business plan that stems from well-thought and review strategy. Prolonged investment in hiring high-skilled gig workers in the name of experimenting with new offerings could led to unexpected expenses that might not lead to any ROI. This depends entirely on the company’s risk appetite.

Labour guidelines

The need to follow labor guidelines with regard to maintaining a steady flow of part-time or contingent workers is essential. The volume of regulations in itself can be a daunting task. There is a large gap between the way gig is growing and the adaption of regulations as the law associated with it is incomplete and antiquated in many respects. Companies have to handle the situation expertly through the application of mind, due process, and principles of natural justice. Companies want assurance that they are not against the law in a situation where there is no law. As long as practices are equitable, most fears can be allayed.

(Ranga Reddy is co-founder and CEO of Maveric Systems.)

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Maveric Systems