The gig economy, defined by the expansion of an on-demand workforce of contingent workers, continues to grow in Canada. By 2018, a total of 15% of Canada’s workforce was self-employed in one way or another.
It’s a work arrangement that has exploded worldwide, touching 20% to 30% of the labour force in both the U.S. and the E.U. As a result, tapping into other forms of employment has become a key strategy for growth. However, many companies are still trying to understand how to manage and maximize their use of the alternative workforce.
How to manage an alternative workforce
The alternative workforce is a vastly underappreciated resource, and most aren’t using it effectively. According to a Deloitte survey, many organizations are using these workers transactionally to fill holes and deal with emergencies, rather than building a coherent strategy.
All the benefits of the gig economy are nothing without effective workforce planning, recruiting practices, performance management and ongoing engagement. Here are four best practices for managing your alternative workforce:
- Strategic workforce planning
Companies should perform a talent gap analysis to better understand the holes that need filling, and then determine whether these gaps are better filled by an independent contractor or by a full- or part-time employee.
To perform a talent gap analysis:
- Determine the talent and skills needed for each role
- Inventory the talents and skills of your employees
- Find where the demand doesn’t match the supply
Local and national labour laws may play a role in this determination. There are four tests to determine whether a worker is an employee or independent contractor in Canada. These tests look at:
- The degree of control a worker has over their work. Do they control how, where and when the work is done? Can they hire subcontractors?
- The degree of integration into the company. This test examines their role and the nature of their work to determine whether they’re integral to your business.
- The method of compensation. While employees are generally paid by the hour, day or week, independent contractors tend to be paid a fixed amount determined by contract.
- Some combination of the above.
Canada also recognizes a classification called “dependent contractors,” which are individuals whose businesses are entirely dependent on another business, such as your own.
When making use of the alternative workforce, it’s important to clearly delineate between the different kinds of workers, as employee misclassification can result in surprise legal expenses.
- Recruiting and competing for gig talent
Once your organization decides to leverage independent contractors, the company will need to make efforts to recruit and compete for these workers. Competition for gig talent is growing, as 86% of executives in Canada say they plan to increase the amount of “agile workers” they have. Attracting and retaining talented gig workers is about maintaining a positive and respectful relationship with them and treating them as valued partners.
Freelancers place a high value on freedom and flexibility. Being flexible with remote work and working hours will provide a more positive experience that will help attract and retain top talent. Ensure that their assignments offer new and interesting challenges so that they feel there’s also room for professional growth.
- Performance Management
Gig workers come with very different challenges and opportunities than your full- or part-time employees. To ensure optimal performance of your gig workers, employers must train their managers on how to properly manage independent workers, including:
- How to communicate mission and values quickly and concisely.
- How to help gig workers understand their culture, tools and processes.
- How to show gig workers that they are valued and important partners.
- How to regularly provide clear and constructive feedback.
Feedback should focus on the work itself and highlight specific areas which need to be improved. Freelancers appreciate good communication, clear instructions and realistic expectations.
To set your freelancer up for success, all processes should be streamlined – from your administrative and payment processes and policies, to the processes and methods used to provide two-way feedback.
According to Harvard Business Review, freelancers reported that they’re often excluded from critical meetings and discussions that would provide helpful and essential context for their work. Freelancers should be brought in for relevant meetings and updates and invited to team trainings that would help them successfully complete their project.
Many companies have made changes to better utilize an alternative workforce. German company Robert Bosch GmbH created an entire subsidiary called Bosch Management Support GmbH to manage its pool of 1,700 on-call contingent workers. This pool of “senior experts” is made up of former employees and retirees that Bosch brings in for consulting and other projects on an as-needed basis. Reporting a 92% satisfaction rate amongst these contractors, Bosch believes that project-oriented work and internal networking are the key to successfully bringing together knowledge and experience of the seniors and fresh ideas and skills of the younger associates.
- Engaging gig workers ongoingly
When they’re not being actively engaged in work for your company, you can keep gig workers engaged with your brand through content marketing, online groups, events and other resources. This helps build and maintain the relationship between your company and its community of outside talent.
The gig economy is here to stay. It’s time to develop a more strategic approach to utilizing this workforce to fuel growth, rather than relying on it to tactically patch holes.