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Gig Economy: Implications on Human Resource Management

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This blog aims to explore implications of the gig economy on Human Resource Management as a whole, critically analysing and evaluating if the two can co-exist in the future or will HRM have to adapt and evolve into something more complex than it already is to ensure its effectiveness in the future. Although the “gig economy” lacks a concrete definition, it is a term used to define the future economy one that “comprises of intermediary platform firms that connect organisations and consumers with on-demand gig (freelance) workers in industries such as transportation (eg. Uber), cleaning (eg. Helpling), programming (eg. Clickworker) etc. This emerging gig economy showcases a trend to recast employment contracts into being more sporadic (on demand) and episodic rather than indeterminate. This poses a challenge to HR managers of the future as the gig economy eradicates a very fundamental keystone of HRM – that of an identifiable employee-employer relationship within the confines of an organisation. As the gig economy gains momentum especially following the CoronaVirus outbreak, HR managers will struggle to manage a talent pool across permanent and portfolio (gig) workers as well as failing to cope with the technological needs required to be put in place to ensure automation of leaving and joining processes in order to eliminate any physical interactions in recruiting as well as day to day operations.

While the gig economy poses an immediate and imminent threat to traditional Human Resource Management techniques, this part of the blog will stress upon the co-existence of HRM in the gig economy wherby despite the absence of an identifiable employee-employer relationship intermediary platforms must seek to design and implement creative HR solutions by leveraging workplace flexibility and advances in robotics and cognitive technology i.e factors we associate with the “Future Workplace”. If so, HR managers simply need to account for these factors while planning future HRM strategies and not view the gig economy as an outright threat to Human Resource Management.

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In order to manage and integrate the future influx of gig workers, intermediary platforms will have to integrate more sophisticated HRM activities like, forecasting gig worker requirements to match present and future demand and devise online rating systems where gig workers can be assessed for performance management purposes. As for right now, HR departments should seek to evolve and prepare themselves for the gig economy as its impact on the future of business is inevitable and can’t be ignored. Human Resource Management must focus on embracing the future workplace by foremost integration of flexibility within workplaces as “workplace flexibility is no longer a “nice-to-have” or a “perk.” Instead, it’s a make-or-break part of job searches for most applicants” HR departments have to offer flexible time, work-from-home or telecommuting opportunities if they want to woo top candidates. Secondly, organizations cannot turn a blind eye towards transitioning into a gig economy and must introspect by identifying internal roles that could feasibly adapt to the gig economy with the primary focus being on vacant roles or soon to be vacant roles but also fulfilled roles as it allows organisations to gage an understanding of whether a role can be eliminated or freelanced should the candidate decide to leave. Lastly, as far as employee retention is concerned HR departments must foster collaboration by introducing gig workers to multiple points of contact or perhaps involving them in department emails to make them feel part of a team therby shattering silos and driving commitment. This is an important aspect of HRM in the gig economy as building relationships with freelancers is essential as it allows the HR departments to come up with a “go-to” freelancer shortlist for future use but also is an important aspect of retaining gig workers because contractually they have no obligation to be loyal towards any particular organisation as they are likely to be employed by a few.

Research shows evidence that a gig-worker outshines a permanent employee when it comes to the engagement index comprising of satisfaction, pride and advocacy associated with a project however they are also less committed making them unlikely to be team workers, share information freely, reach decisions by consensus and resolve conflict arising during work. Since HRM focuses primarily on the internal requirements of an organisation, HR managers cannot help but accept the cost effectiveness of gig workers and must reimagine the future of its own function including the possibility that most HR workers will become freelancing contractors themselves. HR professionals must embrace the new economy and step up as experts, architects and the orchestrators of a “boundary-less global workplace.”

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Gig Economy: Implications on Human Resource Management. (2022, September 15). Edubirdie. Retrieved November 27, 2022, from https://edubirdie.com/examples/gig-economy-implications-on-human-resource-management/
“Gig Economy: Implications on Human Resource Management.” Edubirdie, 15 Sept. 2022, edubirdie.com/examples/gig-economy-implications-on-human-resource-management/
Gig Economy: Implications on Human Resource Management. [online]. Available at: <https://edubirdie.com/examples/gig-economy-implications-on-human-resource-management/> [Accessed 27 Nov. 2022].
Gig Economy: Implications on Human Resource Management [Internet]. Edubirdie. 2022 Sept 15 [cited 2022 Nov 27]. Available from: https://edubirdie.com/examples/gig-economy-implications-on-human-resource-management/
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