The gig economy is in full swing. Ride-hailing apps, home-sharing services, and collaborative crowdfunding platforms are working their way into the lives of Americans creating a digital divide.
The freelance economy benefits from the rise of independent contractors and the increase in short-term jobs which workers find appealing as the workforce becomes increasingly mobile. Changing jobs every several years is an outcome of the gig economy. The current reality of how firms hire and engage talent must evolve. Building and growing world-class talent have never been more challenging.
As workers leverage their skills, knowledge, and networks mixing contract work, short-term jobs, and freelance assignments the corporate resource pool is shrinking. The kicker is most freelancers left good jobs on their own; 60 percent of freelancers say they started freelancing by choice. How do you as an employer retain talent when employees are not afraid of leaving? The recent report Freelancing in America by the Freelancers Unions and Upwork is an independent study on freelancing in America. The report found that 60 percent of freelancers who left traditional jobs earn more freelancing. Interestingly 78 percent of those freelancers say that it took less than one year to beat their old income. These workers are not afraid of leaving because they are aware of the upside potential. Also, guess who leaves? It’s not the average employee, that likely will not be missed, it’s your most intelligent employees with superstar potential.
Freelancing into business owners
Commissioned by the Freelancers Unions and Upwork, the Freelancing in America report is an independent study on freelancing in America. The report identified five types of freelancer workers: 1. Independent contractors (34 percent of the independent workforce or 19.3 million professionals), 2. Moonlighters (25 percent or 13.2 million), 3. Diversified workers (25 percent or 14.1 million), 3. Temporary workers (9 percent or 4.6 million), and 5. Freelance business owners (5 percent or 2.5 million). These terms can be confusing, so let’s briefly review these worker categories.
1. Independent contractors – don’t have an employer and 100 percent engage in freelance work.
2. Moonlighters – do have traditional jobs, but do projects on the side.
3. Diversified workers – have a balance of income between traditional employers and freelance work.
4. Temporary workers – do have a single job, but their employment status is provisional.
5. Freelance business owners – have multiple employees but still sees themselves as a freelancer.
The trend of freelancing in the gig economy is changing how we work. There is no more 9-to-5, it’s project-to-project and gig-to-gig. Employers are losing employees that are walking out of jobs with poor management and entering the gig economy. Between 2014 and 2015 the number of diversified workers in gig economy increased by 18 percent, climbing from 9.3 million to 14.1 million professionals. The gig economy is growing.
Holding onto magic
When everyone is going freelance, retaining high-quality employees is extremely challenging. The superstars you’re watching are already thinking about going freelance. The entrepreneur drive that earned them the job will be the same drive that encourages them to leave. These superstars rarely make independent decisions to leave but rather it’s a culmination of events that create the perfect motivation such as weak management, limited growth opportunities, or dishonest leadership.
In the race for the digital economy, your superstars are most likely to win it. Begin by building a culture of innovation. Start by asking the right questions.
How innovative is your digital innovation team?
What have team members done personally to propel innovation?
What percent of our top-line growth comes from innovation?
If the answer is not too much, start assessing how your company develops top talent, not only how talent is acquired.
Your worst employees drag the team down, more than the superstars lift the team up. Look for managers in leadership roles supervising employees that are hurting your company. They might be technically doing the job, but they are not leading with the company’s principles. Do they lift up employees? If they don’t, they need to go. Simple as that.
Engagement in the gig economy varies. About one-in-five Americas have contributed to a crowdsourced online fundraising project. However, platform exposure is not as broad as one might expect. Only 61 percent of Americans have ever heard the term “crowdfunding,” 73 percent are not familiar with the term “sharing economy,” and 89 percent are not familiar with the term “gig economy.”
Innovation starts with awareness. Look to your change leaders that naturally display creativity. Make it hard for your superstars to leave. In the gig economy, you’re responsible for your success!
Peter B. Nichol is a business and technology executive recognized for achievements in digital innovation by the CIO 100 awards program, the MIT Sloan School of Management, Computerworld, BRM Institute and the Project Management Institute. As managing director at OROCA Innovations, Peter leads the CxO advisory services practice, which drives strategies across digital, innovation and blockchain technologies.
As the former head of information technology at Access Health CT (AHCT), Connecticut's health insurance exchange (HIX), Peter oversaw AHCT's online marketplace systems and worker case-management and electronic integration with the systems of federal agencies, state agencies and insurance carriers. He was responsible for AHCT's industry-leading digital platform, which transformed consumer- and retail-oriented services for the health insurance industry. For this, Peter was recognized as a finalist for the 2015 MIT Sloan CIO Leadership Award.
Peter also championed AHCT's digital implementation with a transformational cloud-based SaaS platform and mobile applications that were recognized by CIO magazine in the 2015 CIO 100 awards. Peter also received a lifetime achievement award for leadership and digital transformation and was honored as a 2016 Computerworld Premier 100 IT Leader.
Previously, Peter was the program director for AHCT's marketplace implementation, providing the most stable HIX launch, on Oct. 1, 2013. The system helped reduce Connecticut's uninsured rate by more than half. It was recognized as a national model for success and was a finalist for the Project Management Institute's Project of the Year Award in 2014.
Recently, Peter was recognized by the BRM Institute as a 2019 BRM Excellence Award Winner in two categories: 2019 BRM Trailblazer and 2019 BRM Practitioner. The BRM Trailblazer award is for individuals within organizations who are making an impact on global BRM adoption. The BRM Practitioner award is for innovative initiatives implemented within the past year to help BRMs advance their leadership and impact on the world.
Peter has a B.S. in computer information systems from Bentley University and an MBA summa cum laude from Quinnipiac University. He earned a PMP certification in 2001 and is a certified Scrum Master, SAFe Agilist (SA), SAFe Practitioner (SP), and Six Sigma Master Black Belt. He also is the first leader to be globally credentialed as a Master of Business Relationship Management (MBRM) by the BRM Institute, a growing organization now spanning 85 countries. Peter is a commercial-rated pilot and a master scuba diver. He understands, based on firsthand experience, how to anticipate change and lead boldly.
The opinions expressed in this blog are those of Peter B. Nichol and do not necessarily represent those of IDG Communications Inc. or its parent, subsidiary or affiliated companies.