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Self-employment has been on the rise and is becoming widely referred to as the “gig economy.” With one in every three Americans working as a freelancer, this movement goes far beyond popular examples like Uber and TaskRabbit.
Why the shift to a gig economy? As the average length of individual unemployment increases, fewer employees adequately save for retirement, cost of living continues to rise faster than wages, and advances in automation continue to change current jobs, it is easy to see why freelance work has become a popular alternative.
According to a survey by LinkedIn in 2017, there are several factors that have led to the rise of the gig economy: the ability to earn more money, greater flexibility in schedules, better work/life balance, and greater autonomy. By 2020, freelancers are expected to make up 43 percent of the workforce, with 7.6 million Americans working in the gig economy, making the sector a critical part of the labor market.
This brings new challenges for many organizations entrenched in the war for talent. Businesses should develop a greater understanding of the specific talent implication brought on by the gig economy to make better talent decisions. They should consider developing a talent strategy that draws upon both the value of full-time employees and those high-end independent professionals from the gig workforce. Achieving this balance will be a competitive differentiator.
Organizations taking the following actions will more effectively embrace and exploit this disruption:
Reexamine the workforce composition and its impact on your business as a whole. The balance between your organization’s number of full-time positions and freelance positions should reflect business needs.
Infuse a “gig” culture into the work environment by incorporating more entrepreneurial aspects to existing roles. If possible, offer more flexibility and autonomy, which will help enhance the employee experience.
Redefine the Employee Value Proposition. Since gig employees do not have the same legal protections or benefits as full-time salaried employees, organizations should consider revamping their Employee Value Proposition to shine light on this advantage, especially for employees they wish to retain.
Evaluate HR policies. Policies such as noncompetes and the benefit packages between full- and part-time employment may need to be modified to account for gig employment.
In a world where workers are rethinking how they balance the flexibility that independence offers against the security of traditional employment, how do you create a future of work that works for both full-time and gig talent?
This blog is one of a series highlighting KPMG’s talent insight series, The future of work, which explores these new realities and how companies can leverage them to unlock value from its greatest asset — their people. To read all the papers in KPMG’s talent insight series, go to www.kpmg.com/us/FutureofWork.