Organisations are increasingly facing an interesting conundrum. At one hand there is a growing need for cultural cohesion as firms span geographical boundaries, employee demographics, economic and social strata, and on other hand the workforce is increasingly becoming mobile, dispersed, and largely “gig”. The term “gig economy” was coined by the former New Yorker editor Tina Brown, who defined it as “a bunch of free-floating projects, consultancies, and part-time bits and pieces while they transacted in a digital marketplace.” The term has come to stand for freelancers, piece workers, project-based talent, on-demand workers, consultants, and independent contractors who would trade their scarce talent with time and freedom.
The growth of creative content in jobs, strain and friction in the traditional job markets, democratization of talent and ideas, and the pervasive Internet has pushed large, well established organisations to look beyond the traditional employee-employer engagements. Part time roles are no longer limited to the lower end of the value chain or for the startups or small enterprises that can’t afford full time talent, rather such engagements have become a necessity to maintain agility in the face of uncertainty. Companies like Nestle, Netflix, Nike, and Porsche, regarded as innovators in their fields, regularly engage temporary technology staff in product development and IT services functions.
According to research by Braintrust, some of the emergent locations for supplying top-end freelancers and digital nomads are off-beat places such as Canggu in Bali, Chiang Mai in Thailand, and Kraków in Poland, and talent there is competing with that from New York City and Berlin. There is a whole new argument how the gig workforce and empowered freelances can create a more inclusive and sustainable capitalism. Further, according to urban theorist Richard Florida those who belong to the “creative class” are more adept at mixing and matching their income sources to make through difficult times, such as those induced by COVID-19. A whole array of artists, technologists, designers, researchers, teachers, and writers are adopting the model which traditionally dominated by the blue-collar workforce.
With a myriad of options on talent and engagement models organisations can’t afford the mis out on alternate employment options, especially the white-collar gig economy. However, such engagements can’t come at the cost of a coherent organisational culture, else the very premise of a firm becomes fractured. It is a real stretch between integrity of culture versus value creation by talent, however disperse, incoherent it may be. There is even a debate whether traditional offices are relevant anymore? I think, if designed well, adaptive organisations can bring the best out of the gig workforce.
Here are three recommendations for companies to make the best of both the worlds, and this is especially amicable for the firms operating on the creative edge.
Develop a strategic outlook towards engaging alternative workforce
Research suggests that most organisations still engage the alternative workforce in a transactional model and not strategically, where roles in sales, supply chain and finance dominate over roles in R&D, IT and operations. A strategic outlook necessitates taking a broad and long term orientation toward the alternative workforce model and “complement” those with the mainstream workforce instead of looking it as a “substitute”.
When AG Lafley took over as the CEO of venerable P&G, he proposed an ambitious target of sourcing 50 percent of innovations from outside the company, whereby leveraging its then 7,500 researchers and support staff. Launched in 2003, the open innovation model -- “Connect + Develop” -- engages veterans, independent scientists, schoolteachers, students, and researchers through an online portal where they can submit ideas and challenges. Within a decade, the portal started receiving over 20 ideas per day, and several of such ideas have taken shape as new products and enhancements to existing products at P&G. That is gig for innovation.
It is important to adopt the non-conventional workforce alongside the conventional one to stimulate creativity. By 2018 Google employed more freelancers and part time employees than full time associates, and the balance is tipping in favor of the gig workforce. On the rationale of hiring from the gig economy, Craig Bradford of Microsoft shares, “I can bring them in for just a week, or they come in for three years. It really does provide that flexibility.” At Oracle, employees are offered several side projects to tap into their talent, before they choose to go out into the gig economy. On the rational of a flexi gig for permanent staff model at Oracle, Andy Campbell, the company’s HCM Strategy Director notes, “The traditional view of a ‘job for life’ died years ago and it is likely the ‘portfolio career’ will become increasingly popular.”
Strategy makes the difference between a vibrant, engaging, and productive hybrid workforce and the one which is chaotic. But the strategy is only as good as the execution, and that’s where routines play an important role.
Focus on building robust routines
An argument that goes against the gig economy is that only jobs that are standardized, modular, involves low transaction costs, have measurable outcomes, and could be monitored remotely are amicable to be done via the gig model, and for rest of the “jobs to be done”, the traditional model of hiring a service firm would hold. Technology, to a large extent, is making jobs more modular, standardized, and measurable -- think of tax filing, or even consultation from a doctor. The customers see customization on top of standardization offering the right cost-value proposition. Another aspect is that of building robust routines that can take care of human induced variations in the performance.
Martha Feldman from University of California and Brian Pentland from Michigan State University define routines as “repetitive, recognizable patterns of interdependent actions, carried out by multiple actors.” Routines to an organisation are akin to “habits” of an individual, and as much as habits shape personal outcomes in often unknown ways, routines shape organisational performance. Constructive Confrontation at Intel, 15 percent time off at 3M, Objectives and Key Results at Google, Story Trust at Disney, Genchi Genbutsu at Toyota, Experience Design at Apple, Frugality at IKEA, Customer Obsession at Amazon, and Productivity at Microsoft are all part of routines. Routines deliver -- often regardless of who the management is or employees are. For routines, it hardly matters “who” you are as long as “what” you do is well defined, and that’s how organisations withstand a churn in workforce, as in case with McKinsey or McDonald’s and expand rapidly, as in case with Starbucks or 7-Eleven.
When engaged with a heterogenous workforce comprising of freelancers, students, veterans, interns, home makers, part-timers, full-timers and tenured employees, it is important that robust routines take place of personal idiosyncrasies, even at the most senior levels. The constancy of purpose, as embossed in routines, helps shield the organisational performance in the face of employee incoherence and rapid churn.
Re-design your systems to measure outcome and not output
When engaging with the alternate workforce, the focus must shift from measuring input to measuring output. The typical “number of hours spent in the office” must give way to tricky measures, such as “what has been achieved”, and “how does it finally count”. The input, in terms of time and resources, do not matter anywhere as much as the outcome, and such outcomes can often come in very surprising ways. An insight about solving a problem can come in a flash, while taking shower, far away from work or working hours, and the traditional ways of engaging workforce aren’t prepared to capture or even profit from such serendipities. With growing distractions at the workplace and moral hazard of assured employment, employee productivity has dipped radically.
The emerging platforms, such as Braintrust, Contently, Catalant, Tongal, CrowdSpring, and Fiverr, amongst others, offer a low-friction means of enterprises and individuals to tap into the wide array of talent, at competitive pricing, and this seems to be the engagement model of the future. Many of such models can save as much as 40 to 70 percent on manpower cost as against the traditional means of engagement, and often with significant upside in quality of outcome. Managers not only must decide on the percentage of workforce that would come from non-conventional means, but also the share of outcome that they would drive. When AG Lafley declared that 50 percent of innovations must come from outside of the company, he didn’t allude to input or even the output, but the outcome, which is a more enduring measure.
However, managers mostly have a limited control over gig workers' performance and engagement as against the traditional team members, and that calls for creativity in employee engagement models. Google famously employees the Objectives and Key Results (OKRs) as means of measuring the performance of its associates and such measures tie all the way to the top, whereby ensuring alignment of a relatively mobile workforce. Salesforce.com conducts exhaustive employee surveys twice a year and shares the results with all to identify issues before they blow out of hand, and rewards the managers who get their teams to take risks. With a growing share of gig employee in the blend, offering psychological safety would be an imperative and this calls for a shift from measuring output to outcomes.
In summary, having an inclusive and long terms strategy on opening up the workforce to the gig, building robust routines to assimilate the incoming talent and yet offering them individual flexibility, and adopting outcome based measures could be the ways to build a more “anti-fragile” organisation.
This article was first published in September 2021.