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The Gig Economy, The Freelance Economy, The On-Demand Economy.
Whatever you call it, it's stealing your talent.
The Gig Economy, Freelance Economy, On-Demand Econony

[The scene:  A coffee shop in New York City.  I am joined by a few acquaintances.  One of them, a 20-something man, is telling me about his new job.]

Me:  “That sounds like an awesome job – great pay, interesting work, flexibility. Do you see yourself here for the long haul?”

20-something:  “Long haul? Well no. I don’t really know if people do that anymore. I love this company and I’ll give it everything I have for the next few years but eventually I’ll go out on my own.”

Me: “Interesting.  I wasn’t expecting that. What kind of company do you want to start?”

20-something: “Oh, I don’t really want to start a company. I’ll just continue to do what I’m trained to do, but I’ll just go straight to market. You know, the client can just pay me instead of paying an organization, who will then pay me.”

Welcome to the Freelance/Gig/On-Demand Economy; a world where people don’t want to work for an organization, but they don’t necessarily want to start a company either. Now, they don’t have to.

The barrier to entry for entrepreneurship has never been lower. Virtual assistance, single-user CRM systems, accessible graphic design, simplified websites, talent pairing platforms and health care reform have all made “going out on your own” a realistic option.  Some would argue that the freelance path is high risk. But in today’s world, so is working for a organization.

There are currently 15.5 million Americans who describe themselves as self-employed. This is up 1 million from May, 2014, and that number is projected to rise dramatically over the next several years. One study estimates that by 2020, 40% of the American workforce will be made up of freelancers, contractors and temps. This trend is impacting industries across the board. Highly skilled consultants, subject matter experts, designers, attorneys, and CFOs, to name just a few, are taking their talents straight to market, bypassing the organizational point of entrance.

Organizations are following suit and taking advantage of the access they have to independent, highly skilled professionals. According to the 2015 Deloitte Human Capital Trends Report, 51% of survey respondents plan to use contingent workers to increase their productivity over the next three to five years.

There is a new crop of talent that may view the company as an unnecessary middleman, which poses a threat to organizations. For the individual with a marketable skill and the stomach for some volatility, there is little standing in the way of becoming self-employed.

So what do you do if you’re trying to attract and retain talent in your organization? Let’s examine a few of the myths and truths.

The Myths:

  1. Myth #1: Create a great culture.

Yes, culture is important, but it’s replaceable. We live in the era of collaborative work environments, where people with different backgrounds and areas of expertise can come together and create their own stimulating culture. WeWork is a prototypical example of such an environment. The company hosts summer camps, brings in speakers, offers yoga, and provides beer.  According to Adam Neumann, the CEO of WeWork, these communal work environments consume 90,000 free glasses of beer a month. These initiatives are created with the hope of creating an enviable workplace culture without being tied to a particular workplace. As a result, a cool group of corporate Millennials with a ping-pong table will no longer be an effective draw for those craving autonomy and creative freedom.

  1. Myth #2: Offer flexibility.

It won’t be long before offering some element of workplace flexibility will be seen as a barrier to entry, rather than a sought-after benefit. No matter how flexible the PTO policy, organizations can’t win the game of “who has more flexibility” if freelancing is a viable option.  Self-employment wins the flexibility game, hands down. True, in many cases, these entrepreneurial types work more than employees, but they call their own shots as to when, where and how much they will work.

 

The Truths:

  1. Truth #1: Offer exceptional learning and development opportunities.

Organizations can offer employees targeted learning and development opportunities that would be difficult to come by without the company affiliation. Networking groups, ongoing classes, speakers, educational retreats, etc., are all areas where organizations can potentially come out ahead.  To stay one step ahead of WeWork, organizations can subsidize experiences like Aspen Ideas Week or South by Southwest, offer continuing education credits or opportunities for specialized certifications also serve as unique learning and development offerings.

  1. Truth #2: Offer Access.

Working within an organization can offer access to brilliant minds and leaders across different disciplines. However, in some organizations, meeting people outside of your silo is difficult. Too often, layers of bureaucracy make it nearly impossible for high potentials to have access to leaders. It’s critical so break down silos and allow greater access to leadership.

As of this writing, that 20-something consultant still works for a big firm. We’ll see what happens tomorrow…

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