The gig economy isn’t just a new way of working for millions of workers, it’s putting HR into a new gig of its own: providing the business with actionable insights around networks of people who work without any formal employment agreement.
HR leaders are realizing their workforce is increasingly composed of non-employee workers that are a huge part of the workforce, but aren’t in HR’s remit—HR doesn’t guide their use, manage their cost, or empower their deployment. But can HR step up and own managing this mix of employee and non-employee workers and give needed insights into who to engage, what it costs, and how to maintain continuity and quality from the total workforce?
As described in the annual Global Human Capital Trends report, business is looking to HR for answers about the gig economy: “How do I decide the right mix of contingents and full-time to manage costs but give me flexibility in a dynamic business environment?”; “What is the cost of my workforce and how do I make good labor cost decisions?”; “How do I manage the risk of this workforce from a compliance, intellectual property, and policy perspective?”
To provide the needed insights, HR needs to take ownership of the total workforce visibility challenge. This includes driving the addition of contingents in all relevant HR and workforce management systems, and extending people analytics frameworks to include today’s incredibly diverse combination of worker types.
Contingent workers are those who do not have an implicit or explicit contract for ongoing employment. These workers may include: independent/temporary contractors, seasonal workers, freelancers, consultants, workers provided by contract firms, on-call workers, and interns across all work disciplines.
Procurement owns contingents; HR owns employees—but this doesn’t work well because for many organizations, contingent workers are a much more significant portion of the total workforce than ever before. Existing HR systems, governance, performance, and remuneration practices are often capable of handling contingents but are typically not set up to include a blended workforce. The result is that the total labor pool’s cost and engagement are beyond the line of sight for HR—blinding the organization to the true workforce picture—present, past, and future.
Enabling this new gig for HR are advanced analytics that provide all-inclusive, real-time, and forward-looking views of the workforce. But before we get to analytics, the organizational and systems issues surrounding contingent worker management must be addressed.
A total workforce lens
Assuming the right contingents have been procured, onboarded, and set up for payment, HR can be a part of delivering workforce efficiency (cost) and effectiveness (utilization) through the right talent and labor management technologies. Including all workers into the same systems provides a streamlined strategy, single owner of workforce management, and auditable systems and processes to encourage efficiency and adoption of leading practice.
However, the total workforce requires line item visibility and insight that goes much further than traditional macro level headcount, contract hours, and deliverables. The right tools enable HR to examine the workforce from a single lens, define common metrics that expose performance, and use labor data to inform approving timesheets, create work schedules and gig assignments, and manage budgets.
This is how HR helps deliver a flexible, efficient, and cost-effective workforce.
HR’s value-add: actionable insights
Contingent work is by its nature dependent on certain conditions where a need for labor is best filled by a temporary resource.
HR should be able to explain and define these conditions and help validate their effective fulfillment—not just in headcount but by the hour or the labor outcome. The formula for supporting the total workforce model includes these actions:
HR leaders need to recognize that their gig may be changing along with the people who make up the workforce. More and more employees (permanent and temporary), as well as contingents, are offering their labor inputs by the hour, deliverable, and gig.
Managing this as-needed workforce may require new capabilities, and HR must be ready and equipped to operate with visibility into the total labor picture so they can provide the business with actionable insights, control, and support.
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Michael Gretczko is a principal in Human Capital at Deloitte Consulting LLP and is the US leader for its Human Resources Service Delivery (HRSD) practice. He focuses on large, complex global business HR transformation.
Lisa Disselkamp is a director in Human Capital at Deloitte Consulting LLP and is a leader in the firm’s Workforce Management practice. She concentrates on helping clients solve complex workforce time and scheduling problems and developing groundbreaking labor analytics to expose cost and productivity improvements.