The case of the gig economy

A prolific amount of literature was published about what the future of work looks like and how it will be shaped. The future of work is the concept of how work will be driven by the tripartite relationship between the work itself, the worker, and the employer (Friedman, G., 2014).

While research revolves around technology as a main driver (Dokko, J., Mumford, M., & Schanzenbach, D. W., 2015), another concept, the gig economy, is on the rise to likely be as important (Kuhn, K.M., 2016). 

The gig economy refers to contingent or alternative work arrangements (US Bureau of Labor Statistics, 2023)that take the form of freelancing, part-time, seasonal, contractual, and other flexible setups that respond to the changing nature of how humans live and work.

The gross global volume of the gig economy in 2019 was estimated at US$248.3 billion, (Statista, 2019) and is projected to reach $874 billion by 2028 (Business Research Insights, 2023). At an international scale, the prospects for the gig economy appear to be considerable (Turki, M.A., 2021).

Zooming into the Middle East, the gig economy appears to also be on the rise alongside some challenges. Labor market statistics lack reliability and validity to measure this gig working in the region (Kässi, O., & Lehdonvirta, 2018). The informality inherent to gig work is characterized by informal firms and workers operating at the margins of relevant laws and regulations, often lacking formal registration with tax authorities and labor contracts (Perry et al., 2007; Ulyssea, G., 2020). In the spirit of a circular economy (pun intended), we shall circle back to the gig economy; but first, let us also define the second axis of this publication, being workforce planning.

Definition and steps of workforce planning

Cotton A. (2007) defined workforce planning as the alignment of people with an organization’s business plan to achieve its mission. The purpose of the workforce planning process consists accordingly of the need to continuously “have the right people with the right skills in the right place and at the right time”. Those people would “perform their jobs both efficiently and effectively.”

The workforce planning process starts with determining the roles of interest and then establishing the current state and historical trends. After that comes forecasting scenarios that would allow for performing gap assessments in terms of both headcount and skillsets. The process ends with an action plan. Following the introduction of both the gig economy and workforce planning, it is worth looking at some effective ways with which experts are planning the workforce in the age of gig work.

Workforce planning applied to the gig economy

The supply side

Simply put, supply is the total productive hours per employee per year. Applying the identification of supply to gig workers poses the following main considerations.

Firstly, while quantifying gig workers (headcounts) is important as part of the modern workforce planning process, there is a need to consider gig workers’ capabilities (skillsets) as well (known as competency-based workforce planning) (De Bruecker P., 2015). The total productive hours per employee per year may then only be a partial factor of supply determination.

Secondly, gig working remains informal (Mehta, B. S., 2020) and in the process of being managed (Vaclavik, M. C., Oltramari, A. P., & OLIVEIRA, S. R. D., 2022). This is leading to statistical challenges and heavier reliance on platforms and networks (e.g., Fiverr) when measuring supply as holistically as possible.

That said, experts may still want to measure supply via benchmarks where applicable and when available, e.g., nurses against the number of beds in the healthcare sector.

The demand side

Demand is measured through a set of criteria that may be interdependent at times. These criteria support identifying the exact functional needs for Full Time Equivalents (FTEs)[1]. They could guide as well in identifying the suitability of relying on gig workers.

• Business plan – The business plan of an organization determines its future projects (e.g., expansion through additional regional branches). Those projects are sources for additional/different needs in terms of human resources. 
• Targets[2] – the study of demand comprises the number of job targets or target outcomes to be achieved within a certain time unit (Menpan, 2004). This is referred to as workload analysis (Purnomo, H. 2015). It allows a bottom-up approach to understanding talent demand.
• Technology – the technological dimension is nowadays critical to analyzing the demand in a workforce planning exercise. Digital technology transformed how and where work gets done and how many people are needed to do it (Mankins, M., Garton, E., & Schwartz, D., 2021). Experts ought to look at how tasks are partially or fully automated requiring fewer resources or ones with highest levels of technology-savviness and self-service who can be outsourced.
• Legal requirements – on occasions, there are regulatory obligations that need to be factored into demand analysis. As an example, the UAE mandates the existence of one health and safety resources for every 100-employee in an industrial establishment[3].
• Industry standards – industry standards can be a reliable source of talent demand benchmarks. For instance, the HR-to-employee ratio is estimated at 2.57:100 (SHRM, 2015).
• Organizational lifecycle – the organizational lifecycle consists of three stages: birth, youth, and maturity/decline (Ionescu, G., & Negruşa, A. L.,2007). A start-up has other requirements than a mature and established company that benefits from more scale and stability.

[1] The count of one person who works on a full-time basis

[2] May be referred to as Key Performance Indicators

[3] https://u.ae/en/information-and-services/jobs/health-and-safety-at-workplace

How to establish optimum, over years

Optimal demand-to-supply ratios can be reached by continuously identifying talent gaps and bridging them through a variety of interventions such as job outsourcing, recruitment, talent mobility, etc. Nevertheless, it is important to shed light on two concepts that contribute to the success of a workforce planning exercise at large:

Rationalization

• Are interventions truly bridging talent supply and demand gaps?
• Are interventions optimal in terms of cost?
• Are interventions filling the capability gap?

Socialization

• Are stakeholders who are concerned by workforce planning identified?
• Are stakeholders involved in the planning? Are they consulted?
• Are stakeholders made accountable for workforce planning decisions as a business-led (vs. HR-led process)?

As mentioned earlier, workforce planning is a strategic (Vulpen, E., 2019) and multi-year process (Lacerda1, D. P., Caul liraux, H. M., Spiegel, T., & Neto, S., 2013). Until now, the lack of organization in the gig economy in emerging countries, makes it difficult to plan for several years ahead (Perry et al., 2007; Ulyssea, G., 2020). Regardless, there are some criteria that come into play to make planning easier with the data at hand:

• Succession: some positions will become vacant because of succession. The same scenario applies to promotions from a year to another and other talent mobility interventions that may be in place;
• Retirement: some incumbents will retire over upcoming years;
• Job elimination: some jobs will be eliminated leaving incumbents with no immediate raison d’être within an organization;
• Job creation: some jobs may be created, increasing as such the demand with no immediate access to supply;
• Job redesign: some jobs may be redesigned requiring different skills hence additional / different resources;

Risks and mitigations

Planning the supply and demand of gig workers entails risks. The primary risk remains gig workers’ potential lack of commitment (Cropanzano, R., Keplinger, K., Lambert, B. K., Caza, B., & Ashford, S. J., 2023) impacting the equilibrium between the supply and the demand of talent. The lack of commitment may be due to several reasons such as job insecurity, absence of benefits, absence of belonging to unique values, short engagements, limited social connections, excessive autonomy, lack of career paths, etc.

There are multiple mitigations that may be activated that would serve both the commitment of gig workers and the effectiveness of its related planning.

• Communication and engagement: organizations can foster open and transparent communication between the organization and gig workers. They can use technology and online platforms to facilitate regular communications creating a virtual sense of community.
• Recognition and inclusion: Organizations can acknowledge and appreciate the contributions of gig workers. Recognition programs, even in virtual spaces, can help build a sense of belonging. Gig workers may be included in company events, meetings, and training sessions to promote a feeling of inclusion and connection.
• Flexible benefits: Gig workers may be offered non-traditional benefits such as access to professional development resources, networking opportunities, or even a stipend for healthcare or wellness programs.
• Building social connections: Organizations can facilitate virtual networking opportunities for gig workers to connect with each other. This could include online forums, social media groups, or periodic virtual meetups.
• Long-term partnerships: Organizations may consider developing long-term partnerships with gig workers who consistently deliver high-quality work. This can create a more stable relationship and foster a stronger sense of commitment over time.

Final recommendations

To close full circle, here are some final recommendations for those who are engaged in workforce planning while the world of work evolves toward a future that is largely defined by the gig economy.

• A data-driven approach to workforce planning provides evidence-based insights to help make informed decisions (Panayides, J., 2022) and minimizes the risks related to subjectivity and silo creation in organizations.
• The qualitative analysis (competency-based) is as important as the quantitative analysis (data-driven) in workforce planning. Hence organizations ought to carefully design strategies by using both quantitative and qualitative data (Belhaj, R. 2017).
• Resorting to the gig economy as an alternative source of talent supply may be the new normal. Volatility is widely expected to dominate the business environment for the foreseeable future (Carey, M. 2012). Talent needs/demand may be temporary (seasonal, project-focused, associated with a forecasted peak, etc.). Relying on the gig economy can turn into increased efficiencies and agility if adequately implemented.
• Workforce planning should be an ongoing and dynamic activity (Solano, B., & Seto, D. 2023), with continuous evaluation of changes in the internal and external environment (SHRM, 2017). The optimal relationship between talent supply and demand is by design fragile and needs to always be re-evaluated in organizations’ quest for efficiencies, leanness, and optimization.

HR has a crucial role in adopting the gig economy and adapting HR practices, e.g., workforce planning. HR is responsible for the technical aspects of these practices. Equally, HR should educate managers on the future of work, and how a different future, requires new perspectives and new techniques. Above all, HR must acknowledge that this future is now – else they risk losing the gig.

Case in point: Korn Ferry x Gravitas Global

Gravitas is the do-tank of the consulting industry connecting management consultants with global consultancies. Gravitas is a managed community of 80 + associates who are spread in 13 countries and speak more than 10 languages. One of Gravitas’s strategic partners is Korn Ferry across the Middle East, North Africa, and Sub-Saharan Africa.

In an interview with Korn Ferry’s Middle East Managing Director and EMEA’s Head of Business Partnerships, this is what George Karam had to say about the gig economy.

GG: Why the gig economy in your experience and opinion?

KF: Firstly, the gig economy is on the minds of a new generation of professionals seeking greater work-life balance, differentiated experiences and learnings, and faster advancement, however they define it (money, knowledge, international work, etc.).

Secondly, the future of work is forcing employers to look at contingent professionals to bring new skills into their organizations faster. There is less time to develop people.

Thirdly, there’s the financial dimension that can be attractive.  Employers may find gig professionals to be more economical, especially when the nature and the time-need for a particular capability or capacity is time-bound. 

GG: How did you make your partnership with Gravitas Global work since 2016?

KF: Six elements made the partnership successful over time

• The fact that GG is not a platform that provides resources but rather a managed community of vetted, assessed, and trained consultants;
• The quality of resources provided by GG;
• Gravitas’s recruitment and vetting process that mirrors KF’s recruitment standards;
• A mutual understanding of the needed skillset but more importantly behaviors;
• Flexibility that is beneficial on both sides;
• Mental agility as KF and GG are learning together how to manage the gig economy.

GG: How does the future look like?

KF: There will be greater expansion of the gig economy in countries with good safety nets (medical care, schooling…). These are the countries where people can have less reliance on their employers. It is likely to grow as well in prosperous countries where there is enough business for people to afford their own medical insurance (as an example of a vital benefit). Some parts of the world may still be challenged. In Europe, the gig economy faces increased regulations pertaining to employment types and taxation.

GG: Any final thoughts?

KF: I advise gig professionals to stay sharp, in demand, relevant, and futureproof.  I also advise managed communities like Gravitas to grow but also sustain their community by keeping gig professionals and continuously upskilling them.

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