A common term for this new workforce is the "flex economy," or the "gig economy," but whatever you call it, it's certainly non-traditional. As of 2015, the average business' workforce consisted of 20 percent contingent workforce and 54 percent traditional full-time employees. The other 26 percent are a grey area of people who fit into both categories; perhaps remote workers or part-time employees. Fieldglass predicts that by 2017 that will change to 25 percent contingent and 41 percent traditional workers, while the remaining 34 percent will exist in that grey area.
"Utilizing an external workforce can offer a variety of benefits for employers, whether an organization is focused on keeping down costs, finding the highest quality workers or under time constraints," says Srinivasan.
Full-time workers are safe … for now
However, anyone concerned about the state of fulltime work doesn't have to worry just yet. The study predicts that while nontraditional workers are starting to edge out traditional workers, it's a slow progression. Srinivasan says he foresees a 50-50 split down the line, but that businesses will always rely on full-time traditional workers in some capacity. "For a company's core competencies, employees will always be needed and an important part of the overall culture and business operations. That said, we do see more organizations exploring ways that a flexible workforce makes sense and can help them achieve their goals."
And although this trend is increasing in popularity, there are also challenges with the reality of contingent workers. In the study, 48 percent cited a lack of visibility and intelligence into the ultimate ramifications of the gig economy. For example, it's difficult to ensure these freelancers are up to speed on compliance, training and their overall impact on the business; all things you can easily teach a traditional worker. Of those surveyed, 46 percent specifically stated concerns around compliance with federal, state and regulatory labor guidelines as they start hiring people from other states or countries.
There are also concerns around spending, with 45 percent citing a pressure to reduce costs and improve savings. Businesses have to consider the cost of hiring individual talent for new projects and initiatives. There will need to be a focus on creating realistic cost evaluations and budgets around nontraditional hires. And one of the last concerns that 37 percent of businesses cited was the ability to grow its workforce. With a traditional workforce, businesses can focus on on-demand training and growth opportunities, but that isn't as easy with freelancers or contract workers.
As the gig economy grows, businesses can expect more support. Similar to the websites that help businesses hire, manage and pay these workers, more software and products will be developed to support the gig economy. For example, companies are adopting Freelancer Management Systems (FMS) that make it efficient to manage this new load of non-traditional employees. Just as the hiring trends shift, businesses simply need to readjust and innovate around their current talent management strategies.
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