“On Demand Economy” of Workforce: the way forward – Is this New Economy Moving us Forward or Backward?

I don’t know if you have heard the term ‘on-demand economy’ or not, but I am going to stick to the fact and surely believe that you use it on frequent basis.

These days so many companies are taking the advantage of on-demand economy and make the products or services available to customers, instantly. It is the real-time fulfilment of one’s requirement.

With the advancement and revolution of smartphone and mobile application these days if you believe we no longer have time, geographical and supply boundaries. We’re always ‘on’, forever connected and can buy anything, anytime, in just few simple taps.

You must be probably wondering what this ‘on-demand economy’ has to do with the employees? Infact Everything. I’ll explain…

Let us believe, rapid technology advancement these days has really made us redundant and the on-demand requirement of workforce somehow works best when transforming department which have historically been clinging on and slow in innovation, In other words, the recruitment industry.

The motivations of the todays employees have changed drastically the expectations have increased. Gone are the days of sitting to the same desk for many years, this concept is dying very quickly. People these days understand the importance of upgradation of knowledge, peace of mind and earning with ease without spending much time in the office. Because of which companies are changing their office setup as cool coffee shops, hipster type work-hubs, and yes why not our own homes or other external work environments where we can be happy and work according to our convenience, and dare I mean it, even liberated…..

Companies are also breaking away from traditional practices and recruiting many freelancers and consultants in a group of people that worked on a various short-term project, it’s a relatively new idea that’s and steadily gaining popularity in the global technology services space.

Even employees these days want, freedom and peace of mind need – and it’s obvious. So, the move towards being self-employed where one is free to choose when he/she should work, it fetches them good money and respect which is absolutely makes perfect sense.

Greatly impacted by this workforce revolution, these days organizations are gradually understanding that they don’t longer need big permanent teams or department of ageing skills which slowly and gradually has diminishing value.

With the rise of independent and free working style will change the hiring game very soon. Next-gen recruitment models will be radically different to the ones we use today. With the foundations built on strong mutual trust and a continuous need for one another, hiring the correct candidate just in a single tap is within our scope.

Cost models will change drastically and liberate a market, which in truth, commercially remains in antiquity. Working on a subscription basis and pay as go pricing will be a very common thing in most of the companies but as we believe some benefit also bring along with them few challenges. All we need to do is to calculate the advantages and disadvantages and move slowly to adapt to the radical shift in near future.

And of course, few challenges – or more precisely – major questions which revolves around ‘On – demand economy’ of the workforce have also emerged.

  • How companies will adapt to the growing on-demand workforce?
  • How companies in future will manage a hybrid organization?
  • Will there be any harm in workplace culture?
  • How will the companies govern a workforce on-demand?
  • How should companies hire at present, and make the future resource plans?
  • What will be the performance management metrics of such shift?
  • How the companies will integrate it in the system?
  • How companies will give the training?
  • Is it on or off-balance sheet?
  • What all extra setup will be required to manage such plans?

I honestly believe in one answer for sure, that the on-demand workforce is very prevalent and it will stay for larger period.  The on-demand economy of workforce is at hype and growing very fast; freelancing individuals, contractors, interns and temporary workers all deliver same thing – a non-stop and fast supply of experience or services on tap and has made major task easy. It can be easily estimated that by 2025 almost 30-40 of workforce will be part of the on-demand economy workforce. Amazing when you need anything you get it instantly?

The on-demand employees bring in the expertise to get the job done as most of the time they are experienced professional or the fresh college students who have current trade knowledge.  Simply Imagine for every project – hiring the right employee, for the right kind of job, at the right package, at the correct time, wouldn’t that be nice? And trust me it’s not difficult there are so many trusted portals where huge number of experienced professionals have registered themselves to give services to companies and individuals at a very decent price.

Is this utopian? Yes. Is this real? Yes, as It’s already happening – from freelancers right through to tradesman. Not only this with the rapid adoption of the gig economy, many of the companies are already taking the strong approach towards structuring their workforce. There are numerous organizations where full-time and part-time employees cohabit in the same space, and many of the organizations are exploring the idea of moving towards hiring contract workers, consultants or freelancers to complete the short-term projects. These changes in the workforce provides the flexibility many workers seek and helps to reduce the cost of re-skilling employees in an era where technology is rapidly getting advanced.

For companies considering “on-demand economy” of their workforce, let us consider a few major facts which I firmly believe brands should consider:

  • Are the organizations comfortable or ready to share the confidential company’s practices and processes with these on-demand employees?
  • Have they made any plan for training for demand economy employees so that their customer/employment brand is maintained through as they come and go?
  • Does organizations have correct contractual relationship policies ready as in real they are actually not “employing” them as full-time employee?
  • Do the companies have built any stringent policies or a way of governing demand employees as they can be at times dishonest, illegal residents, or otherwise unsuitable for the company?
  • Will the companies be ok with people continuously joining and leaving their network on regular basis?

Some of areas where on demand economy has been well proven over the years are:

  • Specialized trained workers i.e. (IT, engineers, designers, content writer’s mathematicians, etc.) who are bit difficult to hire and can work in specialist labor pools
  • Specific Industry consultants who chose to be independent in order to make more money and have work/life flexibility and can balance their both the life.
  • Delivery, services, and repair engineers where the jobs are on repeatable basis
  • Jobs where skill sets are very difficult to search that you will use them contractor or part time worker (i.e. marketing experts or digital marketing exerts).

Ok, now let me share with you one more experience: when companies hire “part-time” or “gig” workers they may be saving some money, but they may be losing many important things also: there may be the chances where these contract workers are not as loyal as full time employees, companies can’t ask them to pitch in and do other things apart from their work when times are tough, and also companies can’t move them around from place to place as the business or dynamics changes. So, before you think “on demand economy” is good for companies, but remember that the “on demand economy” of workforce can be much harder to manage. And if companies are really paying them less, they could face a lawsuit like Uber.

Thus, there are few positive outcomes too if companies hire amazingly talented people as a part-time employee and most of them join easily as they were not able to get full time job due to bad economic situation. As a company grows and if part time employees wanted to be associated for longer time then companies can absorb them also.

Based on this trend and adoption of such practices, we will likely notice a continued hike of such workforce model. However, as we have noticed this model shift may also result in an increase of litigation centering on the issue of miss-classification or can create a disturbance for recruiters— i.e., whether a project-by-project part time employee was classified as an independent contractor or he/she should have been classified as an full time employee, should he be liable for all companies benefit or not. This issue will obviously evolve as companies hire more and more contract workers, consultants, and freelancers for different project. So, at an onset recruiter should build up such strategy so that in long run it help the organizations. Company these days due to tough competition should relatively be very cautious towards adopting to such change or plan or even if they are experimenting and decision should be collaborative so that at the end recruiters doesn’t face any challenges as they will be one who will be implementing and running the process.

Anyhow each year the trend seems to be getting higher, so in 2018 and in coming years we look forward to see up to where it has gone and how much industry is able to reap the benefit from it and how it is helping the recruitment team to find the right resource so that companies can scale their business and gain competitive advantage.

Author Profile:

Abbas Jalis Rizvi

Abbas Jalis Rizvi

Head Service Delivery – SME, HR Global Operations

Experienced Global Head Human Resources professional with 14 years of experience in HR Business Partner, HR Operations, HR Shared Service, Talent Acquisition, Leadership Hiring, and Campus Recruitment and demonstrated history of working in the information technology and services industry. Skilled in Talent Management, HR Consulting, Personnel Management, Employee Engagement, and Business Process Improvement.

Currently Heading Operations Excellence, for HR Global Operations at Ericsson since July 2016.  Before this he was Region Service Delivery Head (Region North America and Latin America) at HR Global Shared Services, with Ericsson from May 2013 till April June 2016. Prior to this he also has worked as Talent Acquisition and HR Business Partner in Ericsson as well as in his previous employment stints.

In his current role, he is involved in driving Transformation & Transition Projects for generating Headcount & Cost Efficiency, Robotics Process Automation Projects, CMMi Certifications, process evolution and business excellence for HR Operations Global Team of 500 odd member (spread over 20+ countries & 6 major service centers) catering to HR delivery in Ericsson

He has an extensive experience in Telecommunications with his last role being in Videocon Telecommunications. He has a management degree in from NIT, Allahabad and loves studying history and changing demographics of Human Resources in India.