The Sharing Economy: Reshaping How On-Demand Talent is Managed (Part 1 of 2)
by Angelo Kostopoulos on January 12, 2017
Mention a company like Uber, Airbnb, or Lyft, and a few words come to mind. “Sharing economy,” is one, popularized by hopeful economists. But if you have more than a passing interest in labor markets, you’re more likely to think “disruption,” “redefinition,” or “upheaval.”
We tend to agree with the disruptive labels. As noted in a 2015 report in the Harvard Business Review, the sharing economy isn’t about sharing at all; it’s a market-mediated evolution of how consumers access products. Market players in sharing economy business models are challenging previously long-held definitions of roles and relationships, adding even more complexity to the ever-evolving connection between employer and employee. And as those relationships shift and change, it’s important that we understand how the sharing economy will impact those of us still operating in the traditional economy.
On-Demand Talent in the Sharing Economy
First, let’s clarify the origin of these changes. While the organizations that herald the sharing economy are large, technologically sophisticated companies, the changes they bring to the market are not as “revolutionary” as they seem. Instead, these changes are more evolutionary, especially when we consider the acquisition of people.
From the growth of the temporary staffing agency segment of the economy to the surge of offshore workforces and contract programming resources, the relationship between employee and employer has been steadily changing for over 20 years. So the sharing economy is not so much a radical shift as much as a logical conclusion. Companies that engage in the sharing economy have set off a chain reaction that will result in a much broader range of possible relationships between the buyers and sellers of labor, but it is a natural next step in the process of how employers relate to employees.
So, what’s the biggest impact of this iteration of change? The fact that the sharing economy and its novel technologies have forced us all to confront how we make decisions regarding talent acquisition.
When we can access talent in the same way that we hail a ride with Uber — making a request in a technologically-facilitated marketplace and getting a response quickly — we dramatically expand the number of possible employer-employee relationships we can access for on-demand talent. And in the process of exchanging money for labor and services, we now find ourselves managing many different types of employee relationships, whether we have the infrastructure in place to support them or not.
How to Manage Increased Access to On-Demand Talent
So, how should your business manage these on-demand talent fluctuations? While the changes can appear bewildering, there are a few straight-forward steps you can take to simplify your approach and improve your overall ability to manage your workforce talent:
Define your talent relationships
If you aren’t tracking the kind of talent you work with, you should first define a continuum of relationships between your company or agency and the labor it employs. Take Figure 1 from Deloitte’s The Open Talent Economy: your company might work with borderless talent in as many as five different categories. The act of defining each category will force you to make a number of decisions about how you manage that talent.
Click picture to zoom.
Image © Deloitte The Open Talent Economy
For example, if you are charged with curating public-facing information assets, you now have several options when it comes to fulfilling the work: you can hire and pay employees (balance sheet talent) or recruit paid individuals (freelance talent) to initiate a self-regulating community of users (open source talent). While the goal of each relationship is the same (the completion of a specific task), how you manage that relationship will be different.
Create a unified talent management strategy
Leading advisory and consulting organizations recommend that organizations adopt a unified talent management strategy, and Gartner predicts that by 2020 nearly 60 percent of HR leaders will use such a strategy for managing employees, contractors, and freelancers.
There’s a reason so many organizations find value in a definite talent management strategy: it helps your company use its workforce resources as effectively as possible. Consider your increased access to on-demand talent of the sharing economy an excuse to formalize how you manage your continuum of talent so that there’s a clear process for managing each employee you bring on board.
Adjust your approach to talent engagement
In some cases, these new relationships will require radically different approaches in how you measure and encourage engagement. It makes sense, then, that the management and retention strategies you use will need to adapt as well.
For example, the motives and metrics of a freelancer versus that of borrowed talent are radically different. Managing a freelance relationship requires onboarding and offboarding talent for each short-term project, so you’ll save the most time by maintaining a pool of reliable and experienced freelance talent. But even with long-term relationships in place with a vetted group of freelancers, it’s a mistake to believe that freelance talent is “engaged” beyond contractual commitments. You can’t engage and motivate them as though they were full time employees because they have completely different motives; instead, you have to adapt your integration and engagement methods to meet that group’s specific needs. What you gain in flexibility must be balanced by what you now need to invest to retain mutual commitment and buy-in from a spectrum of relationships.
Whether your business intends to fully invest itself in a sharing economy model or not, it’s impossible to deny that this workforce evolution will affect how you source and manage on-demand talent. For now, just consider how your organization can organize its resources in the most effective way possible; then in part two, we’ll offer some suggestions and solutions for measuring and encouraging engagement with on-demand talent in the sharing economy.
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About the authors:
This article, courtesy of Al DuPree, COO and Jennifer Barbee, VP/Marketing of AKRON, Inc.
AKRON, Inc. is an HR survey and data analytics company located in Washington, DC. AKRON is a leader in providing substantiated, empirical data to empower HR departments in their plight for organizational excellence and talent retention. Since 2004, AKRON has been the administrator of the HRA-NCA Compensation and Benefits surveys.