HRM in Gig Economy

What is Gig Economy?

A gig is a work that is completed for a certain amount of time. A gig economy is a free-market environment where contract jobs are typical. This covers jobs such as independent contractors, project-based workers, temporary employees, freelancers, and part-timers. We refer to them as "gig workers." They are people who formally engage into agreements with businesses to perform services without being employed by them, and they may be found in any sector.

Due to digitization, there are fewer geographical restrictions and a growing global workforce, allowing companies to choose the most qualified candidates for each position. Additionally, this saves money for the company on things like office space, perks, and training, as well as on offering advantages to employees like a better work-life balance and the ability to choose the projects or gigs they are interested in. Although the freedom offered by gig workers is attractive, in exchange they get little compensation, few or no health or retirement benefits, complicated tax situations, and upfront equipment costs.

 

HRM in Gig Economy

#1 Position Design and Workforce Planning 

The aim of this endeavour is to ensure a workforce that satisfies the demands of the duties and services that the application clients expect. In order to do this, the apps' built-in algorithms enable users' and employees' virtual and physical locations to coincide. In other words, this role is to ensure multilateral value for all parties engaged in the transaction, including the application firm, users (customers), and workers, while also preventing an imbalance between demand and supply in the market.

#2 Recruitment and Selection

Both workers and users are the target of the recruiting process in order to maintain a balance between supply and demand. In order to do this, the businesses that operate the apps run marketing campaigns where they entice users to utilise their services by offering chances to make money via occupations that are convenient and flexible. Interested users apply for admission via the applications, and algorithms that define admittance automatically verify their prerequisites. Some of the conventional steps and methods for selection procedures are muddled in this process, as the selection process is limited to information verification and approval to do activities, some of which are simple to complete.

#3 Performance Management

User ratings and the platforms' algorithms serve as the primary mediators and controllers of this process. Similarly, evaluations may be accompanied with remarks and recommendations that may enhance the worker's standing or, conversely, decrease the need for their labour and assignments. Additionally, this data is controlled by an algorithm that, in the event of low ratings, has the power to ban, suspend, or remove an employee from the site. On the other hand, high evaluations may be used to justify more pay and perks or more work assignments.

#4 Compensation and Benefits

 

In the gig economy, the only factors influencing one's financial success are the activities or services completed. The amount of time spent working, the financial incentives specified by the application, and the pace at which the services are delivered all affect how much money is made. Since there is often no official or legal connection between the workers and the intermediate platform firm, this revenue is typically unregulated by labour rules. Certain intermediary platforms provide their employees with incentives, such as cash coupons or discounts, in accordance with their performance or goal-fulfillment within certain timeframes. The algorithms used by intermediate platforms are always looking for ways to enhance psychological strategies that motivate employees to project the company's image as the owner of the platform that it offers to users.

#5 Training and Development

 

The purpose of this activity is to increase workers' income and the credentials they acquire via the platforms. Since the activities carried out are not seen to be very sophisticated, many of the training and development programmes supported by the gig economy are brief before beginning employment. Furthermore, training focuses on managing intermediate platforms and fulfilling algorithmically managed and regulated time slots. Given that it depends on both the amount of money employees may make and the contentment of consumers, time is a vital resource in this situation.

Need for a New HRM Configuration

While HR specialists and researchers stressed the need for distinct HR management for workers with varying levels of human capital to make the best inputs to the firm, the gig economy presents a unique configuration in organisations where conventional job methods and work arrangements that depend on cooperation and long-term commitment are distorted. This is in agreement with the discussion at first. Thus, the first step in managing human resources in the gig economy is to oversee the workforce without having to create a traditional employment relationship. It also involves giving priority to practices that ensure that workers have the skills needed to complete tasks, link the supply of jobs with the demand for workers, cut costs, and guarantee control and completion of work.