Future of Work: The Invisible Gig Workforce
The invisible workforce is fueled by a rising “gig” or “on demand” economy. The gig economy is an outcome of the great recession leaving us with fewer corporate jobs and many long term unemployed. While traditional jobs are fewer, many have become entrepreneurs in their own right creating opportunity until something else comes along.
This trend is showing strong growth. According to a new study by MBO Partners and Emergent Research there are 30.2 million independent workers in the U.S. economy. That number is expected to rise to $40 million by 2019.
I call them “invisible” because these millions of independent or freelancers do not show up through the surveys from the Bureau of Labor Statistics (BLS). The surveys are designed to track jobs created (or reduced) by companies and those who are on unemployment. However, the independent worker may not consider themselves “unemployed” and do not show up on company jobs reports. In essence they have slipped through the big proverbial crack.
The truth is the studies indicate that those that are independent workers are enjoying their autonomy and flexibility. The MBO Partners research reports “63% rate their satisfaction as very high (8-10 on a 10-point scale), another 19% say they are satisfied (7 on a 10-point scale) and 1 in 5 actually assign a top score of 10.”
Out of curiosity, I thought I would compare those numbers with the latest employee engagement statistics. Could it be that there is a world-wide increase in engagement regardless of having a job or being independent?
Um, no. Put the pixy dust away.
According to Gallup, “only 32.9% of U.S. employees engaged in workplace. Further the study finds “the majority of U.S. workers are still not engaged.”
It appears that the independent workforce who is highly engaged is a trend that is going to grow and stay around for quite a while.
There are two questions:
What should HR Professionals or Business Leaders know?
It makes perfect sense to use the services of an independent contractor. Companies rely on the contingent worker to deal with temporary influxes of business volume, address specific projects that have a start and stop point and so on. It can enable companies to be agile in an otherwise uncertain economic reality. However, HR professionals or business leaders should pay real close attention to regulatory requirements regarding the independent contractor. The Department of Labor has increased its scrutiny on the independent contractor relationship exponentially. If a company is found to have misclassified workers as independent contractors, it may have to pay legal fees, back wages, back taxes, penalties and damages.
What should a “Gig” company know?
Pay attention to the California ruling on a lawsuit involving Uber. Courts have recently ruled that Uber’s independent contractors are really employees. In fact there are a growing number of lawsuits that are challenging employers whether are large like Fed Ex or small start-up like Uber. The key question to ask is, “whether the worker is economically dependent on the employer or truly in business for him or herself?”
Frankly, I am rooting for the small business owner in this era. I think small businesses are the fuel for future job creation and innovation. It will be interesting to see how all of this plays out in the end. We will be watching this trend and will report on it and provide resources in the future.
Tresha D. Moreland, MBA, MS, SPHR, SSBBP, founder of HR C-Suite, is an HR thought leader in Human Resource Strategic Management. She has held key human resource leadership roles for over 20 years in multiple industries most recently a senior vice president in the healthcare industry.
Tresha is the founder and publisher of HR C-Suite (www.hrcsuite.com). HR C-Suite is a game changer results-based HR strategy website. It is a first-of-it's-kind site that organizes HR strategy based on desired business result.
She has developed a business philosophy of integrating human resources with business strategy, thus creating a hybrid HR leadership approach. This approach enables the leveraging human resources to achieve business results.