Gig Economy and Rise of the Contingent Workforce - Free Paper Sample

Introduction

This project will evaluate the emergence and rise of the gig economy and the contingent workforce. The project will as well explain the rise and growth of the gig economy and why it has become a common challenge to business organizations. The relationship between the contingent workforce and their implications for business and HRM will be discussed. The report will also apply the implications of the gig economy and contingent workforce to recruitment, human resource planning, and selection. Recruitment, human resource planning, and selection will also be discussed, as well as the issues brought about by the gig economy and contingent workforce. The report will also encompass a model business organization and its approach to the gig economy and contingent workforce. Human resource management strategies derived from the implications of the gig economy will also be discussed in this project. Lastly, this report will describe ideal recommendations for addressing contingent workers and gig economy for recruitment, human resource planning, and selection.

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The Gig Economy and the Contingent Workforce

A gig economy is a free global market where contractors, independent workers, and firms take part in short-term and on-demand working relationships that are both flexible and based on skill and competence. A gig market economy is majorly characterhood by freelance jobs and short-term contacts as opposed to long-term contracts and permanent jobs (Wood Et al., 2019). In a gig economy, business organizations can select specialized employees from every corner of the world. A larger pool to choose employees allows businesses to afford expensive workers with specialized skills for a short time. The gig economy also allows firms to save on both selection and recruitment fees since candidates are many.

A contingent workforce comprises of consultants, independent contractors as well as freelancers who are not part of a firm's payroll as they are not full-time employees. Workers in a contingent workforce are recruited by an organization based on the demand for their services. Businesses can recruit contingent employees directly or use the services of a staffing agency. Employees recruited temporarily are work either remotely or onsite and receive leas benefits and pay than the ordinary full-time workers. A considerable percentage of the contingent workforce is essential to the company's workforce strategy since it brings along additional flexibility and agility. The idea of the contingent workforce is beneficial to companies since a significant amount of money is saved on fees associated with the recruitment and maintenance of full-time employees.

The Rise of the Contingent Workforce

As more Americans explore a more conducive and flexible workplace, contingent workforce, which comprises of seasonal, part-time, and temporary employees, has risen to popularity. The introduction of a contingent workforce has become a typical way of organizations to add flexibility into their workforce and operations at large. The rise of the contingent workforce can be attributed as a consequence of the growing gig economy, which is fueling the need for employee flexibility and autonomy.

The increase of contingent employment positions can be as a result of the workers' desire and urge to have improved independence and a reasonable balance between work and personal life. The desire to pursue multiple endeavors simultaneously has also fueled the rise of the contingent workforce (Horne et al., 2018). Contingent workers are majorly attracted by the thought of managing a personal schedule at one's speed, without risking the conflict of interest between them and employers. Despite its many benefits to workers and companies, the contingency workforce has become an issue in business. Since the boundary between regular full-time employees is not always clear, companies always find themselves in legal dilemmas involving contingent workers. The contingent workforce has as well brought about a control problem. Since contingent workers are paid despite not being formal employees, employers can only determine their tasks and what they do but have little control over how they do it (Horne et al., 2018). Organizational culture is lost since contingent employees cannot be easily supervised or controlled.

Implications of Contingent Workforce to Business and HRM

The emergence and rise of the contingent workforce have been both a blessing and a curse to organizations. Contingent employees offer businesses some benefits such as flexibility and worker autonomy. Seasonal and temporary workers suit the immediate needs of a firm, whether they need a specialist for a one-time project or an extended period (Connell & Burgess, 2016). They also offer affordable and valuable expertise, allowing businesses to thrive.

Contingent workers have allowed HRM to cut both recruitment and selection fees significantly. On the other hand, the contingent workforce has forced HR to step up and take on roles previously done by procurement departments. In an economy embracing the application of the contingent workforce, HR departments are demanded to come up with processes that support employee attraction, review, and development (Connell & Burgess, 2016). As a result of its growing popularity, HR departments must come up with effective recruiting strategies, just like they would with ordinary full-time employees.

HR Planning, Recruitment, and Selection

HR planning is a business process that detects current and future needs in human resources for a company to attain its strategic goals. It serves as the connection between human resources and the strategic plan (Suryanarayana, 2016). Companies make use of HR planning as a way of maintaining a smooth flow of skilled workers, avoiding employees' surpluses and shortages as a result. In a contingent workforce, HR planning is essential since workers get to know the objectives of the company, allowing them to feel valued and part of success.

Recruitment and selection are human resource processes that involve the identification of a job position and describing the requirements of both the holder and the position itself. Advertising the identified position and selecting the ideal candidate for the role completes the recruitment and selection process (Suryanarayana, 2016). Undertaking the recruitment and selection process is vital since the success of any enterprise hugely relies on the quality of its employees. With the emergence of the contingent workforce, the processes of recruiting and selecting employees have been affected. With a large pool of temporary workers to chose from, a contingent workforce allows employees to source and select the most skilled workers from all over the world for a short period.

Amazon Mechanical Turk

It is an online crowdsourcing website used by businesses and organizations to recruit remote employees to complete on-demand tasks that cannot be done by computers. The company is owned by Amazon and uses its web services to operate. Companies looking to hire workers usually post different jobs that include answering questions, identifying contents from videos and pictures, among other tasks (Schaarschmidt et al., 2017). Workers, on the other hand, browse through the company's website to see the existing tasks and complete them at the fee set by the hiring company. With almost an entire contingent workforce, the firm has significantly benefitted while at the same time facing issues brought by contingent workers. From the diverse tasks completed by many different workers, Amazon Mechanical Turk's employees comprise eighty percent of local Americans and around twenty percent of foreign contingent workers.

Hiring firms or recruiters can ask for qualification fulfillment by workers, with some companies adopting a setup test to confirm qualification. Employers have the capability of rejecting results and completed tasks sent by workers, which adversely affects their reputation in the platform. Firms pay Amazon a twenty percent commission on every completed task.

HRM Strategies

As an effective way of addressing the challenges of the contingent workforce, HRM must adopt strategies that specifically address the needs of the rising contingent workforce. Every company that seeks the services of contingent workers must understand the needs of their employees, just the way they do with norms full-time workers. To effectively manage, control, and get the best out of the contingent workforce, HRM must be able to attract the best remote employees over their competitors. Since remote workers only benefit financially, HRM should come up with ways of luring top talents to their firms. Policies such as financial incentives to cater to work materials can be a massive sell when advertising contingent positions.

HRM systems should also come upon with ways of measuring and monitoring the performance of remote workers, as well as training and employee support. The skills possessed by a remote worker should be considered when recruiting to avoid low-quality tasks. Communication mechanisms between worker and employer should also be set up by HRM to allow remote workers to understand their roles and responsibilities (Ljungqvist, 2020). In a changing market economy where on-demand workers are on the rise, HRM should put more effort into business processes that attract more skilled workers.

Recommendations for HR Planning

HR planning involves the identification of human resource needs, both current and for the future. The planning connects the human resource department with the organizational strategy. HR planning acts as an effective manner of maintaining a smooth flow of employees, avoiding surpluses and shortages of employees.

Since the contingent workforce provides a large pool of candidates from all over the globe, organizations can use this advantage during the process of HR planning. To ensure that a reasonable number of employees are available to meet the set objectives of a business, HR managers should take their time to select the best candidates available for hire. To ensure effective HR planning, managers should use the experiences, comments, and complaints raised by the current contingent workforce to improve their work (Ljungqvist, 2020). Complaints and issues raised should be sued as a stepping stone to improving the experience of remote employees.

Conclusion

Since the difference between a contingent workforce and regular workers is unclear, the recruitment process should always understand the diverse types of employments and contracts to avoid legal dilemmas. When recruiting contingent employees, HR managers should always develop a valid contract agreement with a clear and accurate job description. The designed contract should also note the employee exemption statuses as well as establishing a time frame and a pay rate (Ljungqvist, 2020). Designing a detailed and precise contract is beneficial to both parties since legal ambiguities are minimized.