The gig economy has arrived
The gig economy has arrived. More and more of today’s workforce are assuming temporary contracts or ‘gigs’, rather than permanent positions. The growth in digital work platforms and marketplaces has made it easier to buy and sell services across the globe, enabling organisations to contract project workers, freelancers and other independent workers for short-term engagements. But what does the trend towards the gig economy mean for Human Resources?
It used to be the case that 85–90% of the working population was made up of permanent employees, with the remaining percentage offering transitional and outsourced services. But with the increasing adoption of freelancing and contracted employment, the key question now for business and HR managers is how to engage non-permanent employees and change the ‘us vs. them’ mentality.
The gig economy can encompass consultancy services, outsourced operations and freelancers. From an HR standpoint, the challenge to practitioners is to find the common purpose and meaningfulness across permanent and non-permanent employees – these are just labels, honestly. We need to focus on how we find commonality between employees, rather than putting people into boxes. Companies that are able to fully integrate non-permanent employees will have a sustainable competitive advantage against known competitors.
There needs to be a common platform or narrative across an organisation; it doesn’t do us any good by separating or isolating non-permanent employees. At ZALORA, we have created a culture that is inclusive. We do not view someone as contracted or as a consultant; we see each other as serving the same cause. Our company newsletter, for example, celebrates the successes of all Zalorians, regardless of employment status. In another example, our company parties include everyone, from contractors to consultants, interns and even part-timers. Inclusiveness is what we practise in ZALORA and everything flowed from there. A permanent employee may have more benefits in comparison to a contractor, but everyone is treated the same and viewed as one common group of people, contributing to our cause.
The Uberisation of the workforce
The truth is that the Uberisation of the workforce is happening [the exchange of services between businesses and workers for a defined period of time via digital platforms] – not will happen – it’s happening right now, and the consequence of this is that work will become further compartmentalised and specialised. This means that with increasing globalisation, we will all be competing; for example, a country like Singapore will be competing with the world economy.
We are no longer constrained by notions of geography because of digital technology. We have access to the best services regardless of where they are – it could be the Ukraine, it could be Argentina. With a focus on the specialisation of work, the HR function, by competition or by will, and whether we like it or not, will have to establish a new work paradigm. This paradigm will affect how we recruit people and how we grow our own people.
But what do we mean by ‘own people’? In the past, we talked about people but now it is no longer about buying and building talent, it’s about buying and building talented services. So instead of a person, we are talking about the capabilities of that person – their specific skillset. People must become more specialised to compete with the world’s best, and that’s where the paradigm changes.
Take journalism – journalists can no longer say they are the best person in this market for journalism; rather it will be: “I’m the best in the field for sport stories in Singapore”. It’s just one example. You become the best in the world, and that’s specialisation.
What does it mean for job security?
There needs to be a minimum level of protection for contractors or part-timers. Locally, it is encouraging to see that the Singapore government has taken proactive steps in protecting fellow Singaporeans. For example, in June 2016, the Singapore Ministry of Manpower (MOM), National Trades Union Congress (NTUC), and the Singapore National Employers Federation (SNEF), have jointly developed a set of Tripartite Guidelines on the Employment of Term Contract Employees to provide greater clarity on leave benefits and notice periods. Actions, such as the above, are encouraging indicators, and I believe more will come to ensure that non-permanent employees are treated fairly at a macro level.
On a micro level, how do we as individuals view job security? This notion has evolved. If you were to look at permanent employees in Asia, it is culturally acceptable for a person to jump ship after three to four years. On another note, we hear news of redundancies happening in companies across the world – 10% here, 10% there – to the point that one can’t help but wonder if such exercises are seasonal in nature. Hence, can anyone, permanent employee or not, really be assured of job security for life? The answer is no. I would argue there is actually more job security for freelancers, simply because they are more aware that their jobs are not permanent. The best form of job security is to ensure that when someone pays us a dollar, we can return three or more dollars back in value. For the person who is in the gig economy, he or she has the organic tendency to improve service or product offerings because of job impermanence, and that is job security for life.
In my role as a HR business partner, I facilitate and enable talent to grow in an organisation. What I have observed in Asia is that working as a permanent employee for an established organisation is still very much the dominant preference for young graduates. Generally speaking, the Millennial generation desires more freedom and empowerment compared to previous generations. That notion may lead us to assume that the Millennials would be the first in the queue to take up freelancing gigs. However, I don’t see this as a prevailing preference for undergraduates and graduates in Asia; only a very small minority want to venture into this area.
I don’t want to generalise, but I would say that there is more of a general emphasis on academic education in Asia. Such focus on qualifications has resulted in significant assets and time being invested by families. In Asia, parents generally invest in their children’s education, so it’s harder for graduates to say they are going to become freelancers. This is breaking down somewhat; I would say that five years ago it was quite prestigious to say that you worked for a private equity firm, but now it is even more prestigious to say that you are the co-founder of a start-up.
Macroeconomic forces will determine how the HR function, like all corporate functions, will evolve over time. In 10 years, low birth rates, relative high skilled labour demand across both emerging and advanced economies, and technology democratisation, will accelerate the establishment of the global gig economy.
Asian businesses are still traditional in nature, especially in Asian founder-led conglomerates where the people at the top tend to be first generation leaders, and hoping for their children to take over the helm. Yet, the sons and daughters of these business owners tend to be educated in the west at Ivy League schools where they learn about the celebration of the individual, so this is creating a sandwich generation in Asia. With regards to the gig economy, the younger leaders, who will take over big businesses across Asia, know that it is coming. These second or third generation leaders will have the majority say, in time.
In a nutshell, as permanent employees, we should be thinking, ‘This is my gig’. Even I view myself as a gig employee though I am a permanent employee; if I weren’t, then would I be thinking of staying in this company for the next 20 or 30 years? Is this possible? No way. In this respect, I am a gig worker as well.
This article was originally published in Reflect, the magazine from compensation plan provider
Image source: cc: EJP Photo - https://www.flickr.com/photos/29498428@N00