How The Rise of the Gig Economy is Challenging HR
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How The Rise of the Gig Economy is Challenging HR

If you look at the job listings on many sites today, you will definitely notice a significant number of listings geared towards freelancers, part-timers and contractors. Many are now leaning towards gigs because it offers them flexibility on when they want to work and how they want to do it. Each year, the number of people shifting from a full-time position to a gig increases, bringing in more money compared to those in a 9-to-5 office-hour position. 

While the gig economy is growing, other industries say its growth presents challenges for their organisations. The HR department, in particular, feels the brunt of this challenge. But how exactly? 

The Hiring Process Will Be More Meticulous

The hiring process will need to be adjusted to get gig workers into your team. You need to be specific with the job descriptions and highlight the skills you want these workers to have. You also need to extend your job postings on various job boards, especially those which cater to freelancers and contract workers. 

Once the applicants send in their applications, you must do a different screening and testing process than traditional screening and testing for regular employees. If they are accepted, you will need to establish the right contract arrangement with them and the communication and collaboration platforms you will use for their work. 

Hiring gig workers can also lead to compliance and legal issues. Depending on the nature of their work, gig workers may be classified as independent contractors or employees, which can have significant implications for tax, insurance, and other legal matters.

The Talent Pool Will Be Restricted

Nowadays, many businesses have a part of their workforce consisting of those working as freelancers or contractors. Because of this, the job pool for these workers is minimal, and if an HR department is not ready, they will be unable to source the right talent for their company.

Recruiters may even overlook job seekers who have the right skill set because they are busy trying to fill up contractual positions and expectations. As a result, it will slow down hiring and affect the company’s productivity. 

Your Existing Team Should Be Prepared To Welcome Contractors

The HR department doesn’t just handle the hiring process for new employees; they are also in charge of the well-being and happiness of existing employees. Suppose the company is considering taking in contractors. In that case, the HR department will have to ensure that the existing employees are educated about this shift and be made aware of what benefits they can bring. 

Some employees may even lose their trust in your company if they are unaware of why the company hires contract workers. However, if you can prepare them beforehand, these setbacks can be prevented. 

Since gig workers are often not physically present, maintaining effective communication and engagement can be challenging. This can be mitigated by hosting online events and encouraging open communication by respective supervisors. 

As an HR manager, it will be essential to ensure that contract workers feel connected to the company and understand their roles and responsibilities.

Workplace Culture May Be Disrupted

Contract workers may cause a disruption to your company’s workplace culture because they would only be focused on the task at hand rather than assist the rest of the team. The lack of interest in the work culture can disrupt the balance in the workplace and cause the permanent staff to become anxious about their work.

The HR team will have to do their best to manage these contract workers to manage the workplace balance. 

Different Ways of Handling Gig Workers

Some companies may prefer to draw a distinctive line between full-time permanent employees and freelancers. Employees may enjoy insurance or health care benefits, while freelancers enjoy the freedom to work within deadlines without fixed hours. HR or the team manager must be ready to explain if an unfair comparison arises and prevent jealousy among the team. 

Performance management is an essential part of any HR manager’s role. However, it can be challenging for gig workers to evaluate their performance, provide feedback, and ensure they meet expectations. Leveraging technology, HR can set clear objectives and incentivise those who perform at their best.

Conclusion

The gig economy will be here to stay, and its appeal will no doubt catch the eye of many workers who find the current work setup they have to be restricted and want to make a shift. As the HR team for your company, it is essential that you know what your team needs and adjust your hiring strategies accordingly to make the inclusion of these gig workers seamless and stress-free as possible.

If you do it correctly, you will notice how smoothly your business is running and how well the team is working, even if some of them are contract workers. 

If you are a HR or a hiring manager, you need to read these:
Hiring Help: An Essential Guide To Making The Right Employee Decisions
Hiring People Better than You
How to Select the Right Job Board for Your Company Hiring Needs

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