Seizing opportunity with the rise of the gig economy
The alternative workforce, including outsourced teams, contractors, consultants, freelancers, gig workers, and the crowd, is going mainstream. It’s the fastest-growing labor segment in the EU. By next year, the number of self-employed workers in the US is projected to reach 42 million people — nearly tripling in two years. Alternative workers account for over 10 percent of Australia’s labor pool.
Savvy leaders are well aware of the growth in the alternative workforce. In Deloitte’s 2019 Global Human Capital Trends survey, 41 percent of the almost 10,000 executive respondents said alternative workers are “important” or “very important” to their organizations. But only 28 percent said their organizations were “ready” or “very ready” to address the employment of alternative workers. A mere 8 percent said that they have the processes in place to manage and develop these workers. All this represents an opportunity and challenge for leaders everywhere.
A Wellspring of Talent
The opportunity in the alternative workforce is three-fold:
Filling the ‘skills gap’: The growing ranks of alternative workers offer a valuable pool of skills and capabilities in a time when it is becoming increasingly difficult to fill jobs. Last year, a global study by the Manpower Group reported that nearly half (45 percent) of employers studied were having trouble filling open positions; among companies with more than 250 employees, the percentage rose to 67 percent. That’s a major reason why the employment of alternative workers is spreading beyond IT into a host of other roles. Respondents in the 2019 Global Human Capital Trends survey indicated that they are using alternative workers extensively in operations (25 percent of respondents), customer service (17 percent), marketing (15 marketing), and innovation/R&D (15 percent).
Positively impacting organizational performance: Alternative workers are often highly talented, experienced, and self-motivated, attracted by the freedom, flexibility, and variety provided by working in arrangements other than traditional employment. Respondents to our trends survey who measure the contribution of outsourced teams, freelancers, gig workers, and the crowd reported that these workers have a positive impact on organizational performance.
Increasing diversity: Alternative workers can be a valuable source of diversity. After all, they may be located anywhere in the world, and often they come from a variety of backgrounds and experiences. They can contribute unique perspectives and ideas. Smart leaders not only consider the traditional dimensions of diversity — race, gender, age, and physical ability — they also tap into the deeper value embedded in the hearts and minds of workers. In a complex, global business environment, bringing different hearts and minds together is more important than ever.
So how can your organization tap into the wellspring of alternative workers? The challenge can be summed up in a single word: inclusion.
An Inclusion Imperative
Some companies bring together alternative workers for cost saving purposes, not fully leveraging the potential of their diverse viewpoints. This problem may be rooted in the historic use of alternative workers. In the past, many managers only turned to alternative workers as a backup plan, when facing headcount restrictions, when they needed to cut costs, or as a stopgap measure while looking for regular employees. The major concern with managing these outside workers was compliance and risk mitigation, resulting in “arms-length” relationships. Also, in many organizations, procurement is accountable for managing this part of the workforce, thereby excluding them from the work HR spearheads to create an engaging, inclusive work environment. As a result, many alternative workers may have felt less committed, included, and belonging to the organization and their team.
This is where inclusion comes in. Organizations should make sure that alternative workers feel like they belong to the organization, that they are working towards the same goals as everyone else, and that they are inspired by the mission and purpose — to encourage a sense of connection and meaning.
Here are three ways to help foster inclusion with the alternative workforce:
Leverage the alternative workforce strategically: Begin with the work that needs doing: Is it related to your core business? Is it related to your company’s core capabilities? Is it ongoing or temporary? Your answers should provide some insight into whether alternative workers are an appropriate option.
In addition to the work requirements, consider your organization’s and team’s skills, perspective, and knowledge gaps. Using a work-style based approach and framework, such as Deloitte’s Business Chemistry, can help leaders enhance the composition of teams and the workforce as a whole.
Make authenticity a cultural trait: If you are successful at bringing alternative workers into your company, you should also provide them with the opportunity and encouragement needed to be their authentic selves. Too often, companies inadvertently discourage authenticity because they don’t understand what that means or are fearful that doing so might upset the status quo. As a result, workers may hide their true selves, and end up stifling their potential.
This inability to evoke the whole self at work has several consequences. It not only can negatively impact performance, productivity, and outcomes; it can also drive people away. The latter is especially pernicious when it comes to the alternative workforce: These workers are not bound to your organization as tightly as balance-sheet employees and their switching costs can be low, as they often have no longer-term ties to the organization beyond a specific project. Alternative workers with in-demand skill sets can pick and choose among many organizations — and they are likely to choose the ones that make them feel most valued, included and belonging.
Practice inclusive leadership: Lastly, demonstrating inclusivity and asking everyone who leads alternative workers to follow your example is key. At Deloitte, we’ve found that there are six leadership traits that help support inclusion. They are:
- Commitment: If you believe in the value of inclusion and treat it as a business priority, it will be easier to foster a culture that is truly inclusive of alternative workers.
- Courage: If you have the courage to be vulnerable and authentic, to take risks, and to encourage others to speak up, alternative workers will respond.
- Cognizance: We all have unconscious biases. Recognize your unconscious biases, be mindful of them, and leverage tools to mitigate unconscious bias in your actions and your companies processes. For example, previous negative experience with alternative workers could trigger a leader to have lower expectations of their performance, or to consider them as less loyal or committed as employees.
- Curiosity: Be open to different mindsets, perspectives, orientations, and workstyles. You don’t have to agree with them or practice them, but you should seek to understand, acknowledge, and value them. Bringing in different perspectives from alternative workers can create value and meaning if these perspectives are understood and appreciated.
- Cultural intelligence: Seek to understand and appreciate the values in different cultures. Often alternative workers are from a variety of backgrounds or locations. Appreciating those differences can help leverage them for everyone’s benefit.
- Collaboration: All of us can accomplish more than any one of us. Be a model of collaboration and create a workplace where everybody (employees and alternative workers) can work together.
Bersin’s High-Impact Diversity and Inclusion research has revealed the hallmarks of an inclusive culture: one where every worker (employee or alternative worker) feels valued, safe, empowered to grow, and respected.
Figure 1; Four hallmarks of an inclusive culture:
Organizations with inclusive cultures, when compared with organizations that lack such cultures, are 6 times more likely to be innovative, 6x more likely to anticipate change and respond effectively, and 2x more likely to meet or exceed financial targets.
Through an inclusive culture, alternative workers can be a strategic enabler for increased diversity of thoughts. This can not only benefit the organization, but alternative workers and employees — creating meaning at work.
Written by: Kathi Enderes, Vice President, Talent & Workforce Research Leader, Bersin™, Deloitte
Deloitte refers to one or more of Deloitte Touche Tohmatsu Limited, a UK private company limited by guarantee (“DTTL”), its network of member firms, and their related entities. DTTL and each of its member firms are legally separate and independent entities. DTTL (also referred to as “Deloitte Global”) does not provide services to clients. In the United States, Deloitte refers to one or more of the US member firms of DTTL, their related entities that operate using the “Deloitte” name in the United States and their respective affiliates. Certain services may not be available to attest clients under the rules and regulations of public accounting. Please see www.deloitte.com/about to learn more about our global network of member firms.