News Snippets, Strategy

Managing the gig economy – changing definitions of ‘work’ in the digital era

The World Economic Forum has announced that we are on the brink of experiencing a Fourth Industrial Revolution. They predict that we will undergo many changes in the next five years on a scale comparable to what we experienced in the previous 50 years.

It is important for supply chain managers to take note of these changes. According to research by McKinsey, companies with more agile supply-chain practices had service levels that were seven percentage points higher, and inventory levels that were 23 days lower, than their less agile peers did.

One of the key findings reflect the importance of workforce agility and labour flexibility in achieving these results. In just a few years time, the work scope and talent landscape will look completely different for all functions within a company. It is important for organisations and individual leaders to adapt and leverage on these changes and turn it into an opportunity.

As the digital era changes, the people who do the work is also changing. Projects are now often staffed with a mix of internal and external talent that is increasingly diverse in age and experience. This ties in closely with the rise of the gig economy.

The gig economy is also known as contingent work, sharing economy, agile talent, non-traditional work relationships or alternate forms of employment.

According to the latest State of Independence Report from MBO Partners, in the United States alone, today, there are nearly 41 million independent workers.

Not only do we see the rise of gig economy in the United States, we can also see it in Singapore. Manpower Minister Lim Swee Say said in 2017 that there were about 200,000 freelancers in 2016 and the number is growing. Of these, about 167,000 workers were “primary” freelancers – workers who freelance as their main job. These include insurance agents, private-hire car drivers, hawkers or stallholders, and private tutors.

According to MBO Partners, more than 75% of independents say they are happier working on their own, and almost half of independent workers report feeling more secure than in a traditional employment relationship. McKinsey found that as many as one in six people in traditional jobs would like to switch to being primarily independent.

According to the Civil Service College, in Singapore, 82% of all freelancers do so by choice, a much higher proportion relative to other developed countries.

So why are people more interested in freelance work? The top three reasons are they get to pursue their interests, they have the freedom and independence they want and the flexibility to plan their schedules.

The trend has shifted to individuals pursuing independent careers by choice and not because they have no other options. MBO Partners annual survey sees sharp growth in independent workers taking in more than six-figures in revenue. A recent IBM study found independent workers to be both highly innovative and more engaged than most full-time employees.

However, most companies are not ready for independent workers. Most organisations are not thinking about how to retain existing employees who are considering independent work, and few are putting any effort into motivating and engaging existing or future freelance workers.

New ways of managing talents are needed to remain competitive in this digital era. Organisations that can successfully engage and integrate the diverse motivations, skills, and experiences of the growing talent base in the gig economy can tap into more of what it has to offer and gain a talent advantage over their competitors.

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