Learning and Development Shifts in the Gig Economy


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Posted In: Workforce Insight

Aug • 23 • 2017

When talking about training challenges in the gig economy, most attention has been focused on companies whose entire business model depends on contingent workers. But more companies than ever are relying on a blend of contract workers and full-time employees as part of everyday operations. The growing availability of flexible work options is becoming increasingly attractive to skilled workers, putting pressure on recruitment and retention efforts.

 

Companies that want to thrive with this new model need to consider not only how they will train contingent workers, but also how to use learning and development to enrich, engage, and retain full-time employees. In essence, your competition for talent isn’t just employers in the same market your candidates or employees might depart for. You’re now competing against freelancing itself.

 

Exact numbers of contingent workers are hard to come by, but a recent study by economists Lawrence Katz and Alan B. Krueger found the number of workers in an “alternative employment arrangement” had risen by 9.4 million from February 2005 to November 2015 (from 10.1 to 15.8 percent of the total workforce). Applying a broader definition, the Government Accountability Office released a report in 2015 estimating that contingent workers made up 35.3 percent of employed workers in 2006 and 40.4 percent in 2010.

 

The numbers are uncertain, but what’s clear is this: HR and learning and development professionals need to develop training strategies that support both sides of their new blended workforce if they want to attract and retain the best workers.

 

Shifts at all levels

 

Entry-level workers and those employed through apps like Uber and TaskRabbit get much of the media attention, but the Katz-Krueger study found that only about 0.5 percent were working through an online intermediary. The biggest group of contingent workers are contract workers or freelancers hired on a project basis to fill gaps in expertise or skill sets (3.1 percent in 2015).

 

This shift is happening at all levels of the company. In the 2012 Harvard Business Review article, The Rise of the Supertemp, Jody Greenstone Miller and Matt Miller describe how top managers and professionals are often now opting to develop contract-basis careers doing mission-critical work that previously would have been entrusted to full-time employees. They argue that this kind of high-end gig work is on the rise, partly due to budget challenges on the employer’s side and partly because professionals prefer it. They are “freelance by choice,” as Nation1099, a site for consultants and other independent contractors, puts it.

 

Especially at higher levels of the organization, contingent workers are already experts in their positions, which reduces the need to train them in particular skills. Some organizations may be inclined to let their workforce — whether employees on permanent payroll or independent contractors — take on more of the burden for their own learning. After all, with even full-time employees staying at their jobs for shorter periods, professional development can seem like an unnecessary expenditure.

 

Yet retaining that core group of employees and building a strong internal hiring pipeline is more critical than ever to an organization’s success. And the need to orient your team members to your objectives, strategy, and procedures doesn’t go away, no matter how short-term you expect the relationship to be.

 

Training as an engagement and retention strategy

 

The gig economy is putting pressure on recruiting and retention. As Public Forum Institute president Jonathan Ortmans, writing for the Kauffman Foundation, notes, “This changed reality means corporates are no longer just competing for talent among each other, but with their own workers, who now have more choices to become their own bosses as independent workers.”

 

Jody Greenstone Miller and Matt Miller agree, writing, “The surprise may be not that top talent is looking for ‘permanent temp work’ but that anyone who has a choice would want a traditional job.”

 

Despite the options, studies show that employees are overwhelmingly interested in staying with their current company — so long as that company is able to provide them with a clear career path and professional development opportunities. According to a recent Cornerstone study, 66 percent of employees plan to look inside their current company before searching for a position somewhere else, and 75 percent would describe their career growth strategy as “stay at one company for many years and get promoted from within.”

 

In a study on the impact of professional development on employee retention and engagement, purchasing insights company BetterBuys found that 75 percent of employees whose employers offered professional development opportunities reported being likely to stay with the company another five years, as compared to 56 percent of employees at companies without those opportunities.

 

Benefits of blending workforces

 

Investing in the development of full-time workers is one way companies can make themselves more competitive in the talent marketplace. Once again, the blending of the workforce is shifting how this can be done.

 

Learning and development leaders will need to realign their strategies in order to balance skills across the entire workforce. This will include discerning between the capabilities an organization should grow through employee development programs and which should be filled by tapping into external expertise.

 

Independent contractors who have a specific skill set can be a great training asset on their own. “The arrival en masse of independent contractors provides an exciting learning opportunity for full-time employees,” Andrès Tapia and Jacob Zabkowicz of Korn Ferry write for Chief Learning Officer. They recommend facilitating knowledge-sharing sessions between contingent workers and full-time staff. This can take the form of setting up formal events such as lunches or meetings, or simply providing opportunities for contractors and full-time employees to organically network.

 

Creating a culture of learning in the workplace has always been a powerful strategy for employee retention, and the rise of the gig economy is only highlighting its value.

Jessie Kwak is a freelance writer and novelist living in Portland, Oregon.