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The Gig Economy is on the Rise: Is it the Future of the Labour Market?

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The Gig Economy is on the Rise: Is it the Future of the Labour Market?

In this second edition of ‘hot or not’ I’m discussing the gig economy. I was triggered by a few articles I stumbled upon last week. Although gig economy and portfolio working is still immature, it could be the future of labour market. Technology is empowering an on demand talent market, the millennial generation is leaving behind the nine-to-five workday and financial pressure is causing organisations to think differently about resource allocation. An interesting development I find both promising and challenging at the same time for the future of the labour market and HR.

These days people tend to change jobs at least several times throughout their working lives. The gig economy seems to be evoluating from this trend. It would result in a changing workforce  composite and organisational culture. This shift is mainly stimulating a skill-oriented market. It would enable organisations to procure the expertise needed for single projects or tasks.

The definition of the gig economy seems to vary. So let me first quote a definition I think is closest to the truth:

“A gig economy is an environment in which temporary positions are common and organisations contract with independent workers for short-term engagements.”

Technology and digitisation play a huge role in the shifting within the cultural and business environment. Digitisation has contributed to a decrease in certain jobs, but is also creating new ones. Robotics is another technology development that is encouraging shifts along the same lines. Technology enables employees to focus and improves communication and collaboration. Aspects the millennial generation became familiar with while growing up in this technology era. This is blurring the lines of employment.

PWC’s My life, connected report suggests that, while technology is definitely contributing to the connectivity trend, it is also being driven by the eagerness of people to take more control over their lives, including their careers. In my opinion, this is exactly the ripple effect that millennials are taking the lead in, infecting other generations at the same time. The advantages of flexibility are also very alluring to older generations as work-life balance is becoming more important.

Although portfolio working is a growing hiring trend, many organisations have yet to see the value of employing people in this way and are therefore reluctant in deploying the right HR tech tools. It’s often called the “Uberfication” of work, referring to the application of easy-to-use technologies in traditional marketplaces that is causing disruption. This has happened for example in the taxi industry by Uber and in the hotel business by Airbnb. The labour market, HR and recruitment will also be disrupted at some point. The question is not when (soon!), but how. Although technology and connectivity are the huge efficiency factors, the influence of gig workers is not to be sneezed at. Creating an alumni network encouraging former talents to share their new-found skills in future could prove much more fruitful.

How can organisations get each job or task done by the most qualified talent? The gig economy could be the answer.

What do you think? Gig economy, hot or not?

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