HR leaders know first-hand that the decline in unemployment rates over the last decade has led to a growing shortage of talented workers. This has steered many organizations towards the contingent workforce, also known as the gig economy.
According to Staffing Industry Analysts (SIA), a global advisory firm that focuses on contingent work, the contingent workforce includes agency workers, independent contractors, statement-of-work consultants, and human cloud workers (workers who operate through online platforms such as Upwork or online work services such as Uber or Lyft).
Recent research finds that 40% of the global workforce consists of contingent workers and the size of the global gig economy was estimated to be $3.7 trillion in 2017. The U.S. alone had 48 million contingent workers in 2017, and this number is growing at 4% YoY.
The ability to hire and retain the right talent is a persistent hurdle for almost every organization, with 77% of global CEOs surveyed by PwC citing the availability of necessary skills as the biggest threat to their businesses. Manpower Group’s research indicates that 45% of global employers were struggling to fill open positions in 2018, due to dwindling talent pools of skilled trades workers, sales representatives, and engineers.
By 2030, industries such as financial services, manufacturing, technology, media, and telecommunications are expected to witness widespread talent shortages that simply cannot be met with traditional talent management strategies. Because of this, companies are increasingly looking to the contingent workforce as an attractive source of talent.
In many organizations, HR has traditionally been responsible for permanent employees, while contingent workers have been managed by the procurement team. Often, contingent workforce spend gets lost in what Procurement calls maverick or rogue spend, potentially leading to poor management, low visibility, high risk, and unreliable quality associated with gig workers.
Contingent workers themselves often feel “left out,” not least due to broken or non-existent processes such as onboarding, learning, and rewards and recognition. Companies are increasingly realizing the benefits of raising the contingent workforce’s profile and treating it holistically as a critical part of the total talent available to the company.
Total talent management (TTM) is an emerging model that integrates the management of the full range of an organization’s talent sources, from permanent employees to temporary workers, contractors, consultants/freelancers, and volunteers.
By allowing HR leaders to determine the skills, performance, productivity, engagement, and cost of their entire workforce, TTM enables them to manage skill shortages, boost employee engagement, enhance productivity, and monitor compliance.
For successful implementation of TTM, organizations need to break down the conventional siloes between departments and foster greater collaboration between different teams, particularly HR and procurement.
They can also leverage technologies to predict (using AI) when gig workers might be required, source these workers, manage gig assignments, pay them on-demand, create labor clouds (groups of gig workers who satisfy certain criteria), and offer a consumer-grade worker experience through intuitive mobile apps.