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The Emergence of the Gig Economy

When you speak to David Mason you can't help but pick up on his apparent sense of urgency about the tsunami he sees coming to the nature of work, from a growing gig economy to the advent of Artificial Intelligence (AI). David, who is clearly ahead of the game, is excited that we seem to be at a crossroads in terms of the development of talent acquisition and resourcing.

The future is now

David MasonAs the Director of Talent Acquisition and Management ConTal - Connecting Talent, David is currently working with Nationwide and explains that the well-worn phrase ‘war for talent’ has become a bit of a misnomer. There is a realisation dawning that the quality of an organisation’s people and not just their functional expertise is starting to have a huge bearing on the outputs of companies. “It seems to have leapt across, avoided HR departments and gone straight to the top of the CEO agenda".

CEOs, he said, always talk about talent being their number one issue, yet they'll rate their HR departments as the eighth or ninth department in the whole of their organisations. "I think that is counter intuitive but that is being played out in what I've seen of organisations," David says.

He suggests the problem in most businesses is that the HR community is looking for one definition of talent, rather than understanding what’s important to the business. There was a belief within one company David worked with, that the executive leaders held it together, although in reality, if for instance the project and programme managers disappeared, they’d stop trading immediately. 

“The talent in that case is really about the project/programme managers because they're the ones working closely with the clients”, he added. "Similarly, for cinemas, it's not ticket sales, but all the add-ons such as selling popcorn that makes profit, and the service level from the bar staff has more of an impact on the profit," David states.

Still, companies simply put a leadership talent management programme in place, rather than defining what is critical for them – that definition will be different in every business.

According to David, changes are being driven by companies in Silicon Valley in the US who have begun to think beyond the boundaries about what the hard-to-get skillsets are, which ones are important to the organisation, and are investing accordingly.

The three commandments

"At a very fundamental level, three things need to happen. Firstly, HR need to become better business people, articulating beyond HR best practices and aligning to the business’ definition of talent.”

David recently sat on an operating board where things clicked into place for him whilst seeing an HR professional in action. "It's really important that you understand and communicate in a business language. Twenty years ago finance departments were bean counters. They're not today. They are Financial Analysts and advisers sitting next to the CEO. HR needs to follow suit before CEOs make another choice about how they are going to deliver some of the human aspects of their workforce."

The second element David advises on is really getting to grips with technology sets. “Internal customers today expect a very different service, the same kind they receive when they are able to book an entire holiday from their mobile phones.”

And thirdly, HR need to be good leaders and discipline experts. "I think the nature and structure of HR needs to change - we see some leading lights already," says David, adding that Netflix, for instance, had already disassembled its HR department for a “Talent Scouting and Talent Management Development team” with all of the transactional elements of HR moving under Finance.

The new paradigm

"I think the nature of the model needs to change with the new dynamics in the workforce”, David says. The way that people are working is changing, as are the ways of engaging that workforce. David describes it as three blocks:

  1. The traditional one where people work for large corporates and have a steady life-time job to pay their mortgages;
  2. The second is people-oriented companies where pay might be less but work more flexible;
  3. And the third, the gig economy where people are much more free-flowing and come together to solve problems, whether as an interim or a contractor, working to suit their lifestyle.
"Adapting to that paradigm needs to be in people's minds," David says. The growth and advent of gig workers in some areas and disciplines will start to become, not necessarily a problem, but certainly a challenge, for organisations to manage.

"Resourcing in the recruitment world is probably at an exciting point," David says. "I think that over the next the next five to ten years there will be step changes in terms of its capability, driven by new tools and processes.”

David concedes that there probably won’t be "wholesale dumping of the nine to five" due to the gig economy growth, but there would be a significant erosion of it. "I suspect the number of hours we need to get things done in might go down and work-life balance will come to the forefront, but it’s going to be a difficult transition.”

David’s view is that the proactive HR departments dealing with all of this are very small in number and most are still found outside of the UK. Most HR teams are simply reacting to events around them rather than driving initiatives.

Drawing on his early army career, David tells us that one thing you learn in the military is once you've been attacked you need to seize and regain the initiative back from the enemy to get them to react, not the other way around.

"That's not a bad analogy in business where you need to drive events and take the initiative as a general principle," he says. "The pace of events has sped up, driven by technology. If someone likes a product it goes viral in days or weeks, not six to twelve months. As a competitor you've got to react to that.”