Adilstone Answers: How Does the Gig Economy Affect Recruitment?
Adilstone Answers: How Does the Gig Economy Affect Recruitment?
As we get to experience today’s ever-evolving job market, a rising momentum in non-traditional approaches to employment has been dominating the playing field. We can only imagine and see so much in this lifetime the kind of momentous effect this has on companies, recruiters, and the workforce. Gone are the days of the typical 9 to 5’s and instead, we see a remarkable surge in freelancing and contract work, also known as the gig economy.
In this new era of resourcefulness and flexibility, the road is continuously being paved for those who embody an autonomous and entrepreneurial spirit. It’s not only reshaped the way businesses and recruiters analyze their strategies but has also built doors of opportunity in the world of work for those in need of a job. Let’s delve into what exactly the gig economy is and what this means for recruitment.
How Can We Define the “Gig Economy”?
The term “gig” was initially coined in 1915 when jazz musicians would use this word to refer to individual performances. Nowadays, it is used by non-musicians in the context of a labor marketplace dependent on temporary positions filled by independent contractors and freelancers.
Workers within this category are generally classified as “self-employed” because of the lack of benefits and for tax purposes. Depending on your skills and talent, the work can vary from short-term projects & tasks to hourly assignments. The primary objective, however, remains the same: to connect clients to customers via products or services.
The frequent occurrence and participation within this so-called economy are hinged upon several factors. We can attribute technological innovations, unstable economic conditions (exemplified by events such as the 2008 financial crisis or the global pandemic), and lifestyle changes as some of the propelling elements to this increased engagement.
Key Characteristics
Flexibility - The appeal of this type of job sector is the emphasis on the ability to work how, when, and where you want. It doesn’t get any better than that. Gig workers have the freedom to customize their working hours and to select tasks that are most compatible and convenient to their preferences.
Platform-Driven - There are a multitude of specialized platforms, generally digital ones, that act as channels through which workers can secure employment opportunities. Typically, these platforms allow for skill alignment, cultivation of relationships, and transparent payment procedures. Examples include Upwork, DoorDash, Fiverr, Airbnb, Uber, Rover, and several others.
Independent Work - The gig economy is characterized by an independent nature because of its fundamental structure; it empowers individuals to foster a sense of ownership. This independence extends beyond flexibility and essentially allows people to define their scope of work. It enables individuals from diverse backgrounds to leverage their unique skills and abilities in a way that makes sense for them.
On-Demand - The work being done operates with an on-demand model where it is requested and provided as needed. Because of this, we can highlight shared preferences for streamlined processes and timely outcomes which customers and workers value. This doesn’t automatically ensure business success, as retaining customers and expanding one’s reach relies heavily on relationship building.
What Does This Mean For Recruiters?
Recruiters hold a prominent role within the hiring process, from initial candidate selection to the entirety of the onboarding process. The integration of freelance or temporary work arrangements can definitely stir the pot and interrupt the entire process, both positively and negatively. As we explore this new avenue of work, it presents both opportunities and challenges for recruiters to address.
Benefits
- Talent Pool - The candidates available possess specialized expertise that you wouldn’t readily find through traditional hiring channels. We also see that scalability is evident with a wider range of skilled workers. They can meet fluctuating demands or project-based requirements without the complications of long-term employment commitments.
- Cost Efficient - Because employees are self-employed, this eliminates overhead costs associated with hiring for more permanent positions. For example, there is a decrease in costs because of the lack of benefits and retirement options.
- Competitive Advantage - Utilizing the gig economy is also a way for organizations to fill unmet needs both quickly and efficiently. Being able to quickly adapt gives companies a competitive advantage in recruitment and talent acquisition.
Disadvantages
- Lack of Control - Despite gig workers specializing in their field of expertise, recruiters have limited control over the quality and consistency of their work. Possible reasons for this hurdle include a lack of formality, different values/company culture, and emphasis on flexibility.
- Availability - Recruiters may encounter difficulties finding talent with the necessary skills for urgent or time-sensitive staffing needs. If it’s at such short notice, it’s especially challenging to find gig workers who don’t already have priorities with other projects or previous commitments.
- Limited Loyalty - Usually independent contractors engage with multiple clients and employers at a time, directing their attention and care to multiple areas. These relationships tend to be transactional rather than long-term. As the quantity of work opportunities increases for these workers, it can be a struggle to provide consistency without sacrificing quality.
- Legal Regulations & Policies - Depending on the classification of the people who work under this umbrella term, legal and financial complexities are prone to surface. Recruiters need to cautiously navigate this slippery slope to ensure compliance and mitigate potential risks for the company.
- Communication - Short-term workers and freelancers operate on their own schedules, which, when coupled with varying communication preferences and technological capabilities, hinder clear communication. This poses a struggle for recruiters to effectively communicate if they plan to follow through with a decision.
After analyzing the advantages and disadvantages of utilizing gig workers, there seem to be more potential downsides. The more we think about incorporating this into companies, there are likely to be more drawbacks because of the untraditional nature. Regardless of the drawbacks, there are ways to use gig workers effectively and efficiently.
The Bottom Line
Now that you have an idea of what the gig economy is, the next step is learning how to navigate this new landscape of employment opportunities. If done successfully, recruiters can gain the upper hand and maintain a competitive edge. Companies and recruiters, however, must tread carefully and establish as many parameters and guidelines as possible to foster healthy relationships despite the barrier that comes with time.
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