The gig economy’s disruption of traditional workplaces has changed the functioning of the professional world and will cause a major operational rethink for a number of businesses. Telstra Board Director, Nora Scheinkestel, recently told the Financial Review that this evolution of the workforce should be at the top of executives’ agendas. “One of the issues that was raised [on a recent trip to Silicon Valley]… was a view that 40 per cent of the workforce will be contingent,” Dr Scheinkestel said. "So at the lower level, that's shift workers not knowing whether they're going to work the following day, but even at senior skilled levels they're talking about professionals working on their own and then being brought together very quickly into teams for special projects and collaborating through technology." With the sharing economy expected to grow by over 300 per cent in the next three years, the demand is increasing for executives to keep their talent management agile by engaging a global talent pool, leveraging specialty skills and better managing costs. On the other side of the coin, the gig economy provides unprecedented opportunity for highly-skilled executives to work on demand through digital platforms. Executives need to understand the changes that the gig economy is bringing: from the death of the ‘one company career’ to the rewriting of retirement and the increased desire to maintain a happy work life balance. Here are three essentials that executives need to know about independent consultants the gig economy:
1. The gig economy is driven by strong supplier demand and buyer necessity
The traditional 9-5 is a broken system, lamented by employees that find themselves forced to work at unproductive hours and spend hours commuting. A university of Chicago study found that job satisfaction was materially higher for employees with discretion over their hours of work and place of work. Independent consulting allows unprecedented freedom for workers (the suppliers in this case) that are able to choose their own hours and clients. The demand for lifestyle benefits has meant that the number of independent consultants, once recorded at 7 per cent of the US population in 2005, will reach up to 40 per cent by the year 2020. On the other hand, businesses are increasingly understanding that talent management agility is a business imperative. A rapidly shifting, technologically-driven, modern business environment means that being able to adapt to change is essential. 70 per cent of Fortune500 CEOs see the pace of technology development as their greatest challenge and the increasing rate of turnover of companies on the Fortune500 list proves that remaining agile is more important than ever. Nearly 90% of executives surveyed by the Economist Intelligence Unit believe that organisational agility is critical for business success. The overwhelming desire to become agile has contributed to the exponential rise of independent consulting. 83% of executives in an Oxford Economics study said they plan to increase use of contingent, intermittent, or consultant employees to increase talent management agility in the next 3 years. Agile organizations have been proven to perform better, driving the desire to create lean talent on demand. Agile companies have been shown to grow revenue 37 per cent faster and generate 30 per cent more profits than their non-agile counterparts, according to an MIT study.
2. Consultants seek out independence, they aren’t forced there
It’s commonly misconceived that the gig economy is driven by people who do not have a choice other than to freelance. A recent study by the CSIRO highlights that 88 per cent of freelancers would continue to work on demand even if they were offered work full time. There are a multitude of influencing factors behind this movement towards independence. As mentioned above, lifestyle benefits are a strong driving factor, but the ability to transition into new phases of life means that highly skilled workers are seeking opportunities in new areas. “It’s great to work for yourself, choose different projects and work with different clients,” said Fred, an Expert360 strategy consultant who freelances on the side of his full time role. For some executives, independent consulting is also providing an avenue to transition easily into retirement. A study by Financial Advisor Magazine suggests that 56 per cent of pre-retirees expect to flexibly transition into retirement. Platforms like Expert360 allow individuals to swap out their full time senior role with something more desirable. Many highly-skilled workers are also leveraging the on-demand economy to work part-time and pursue other passions, from having a baby to starting a company.
3. The gig-economy re-engages workers
A recent Gallup poll found that only 35% of professional workers report feeling engaged at work. This lack of engagement is something that the on demand economy can change. As many as 60 million workers globally leverage online talent platforms to find work that more closely suits their skills or preferences, according to a McKinsey report. The ability to pick and choose work is driving employee re-engagement, increasing output and improving worker satisfaction globally. In essence, it is important that executives understand the functioning of the gig economy for two main reasons: their companies need to strive to have agile talent management in order to remain competitive and so that the sharing economy can potentially benefit their own careers. Critically, executives must understand that the high-skilled gig economy is driven by supplier (independent consultants) demand and buyer (companies) necessity; that consultants are seeking out independence, not being forced to work on demand; and that the gig economy helps re-engage employees and boost job satisfaction.