Is your talent strategy ready for the gig economy?

Grace Lewis, 1 December 2015

The ‘connected work’ market will be worth $63bn globally by 2020, PwC predicts

The connected work market, also called the ‘gig economy’, where people buy and sell services via online platforms, is expected to be worth almost $63bn globally and £2bn in the UK by 2020, according to PwC research.

This market currently makes up only 2 per cent of the total recruitment market, the report said, but is set to grow rapidly as the number of people working flexibly, part-time and on contracts is set to rise over the next five years.

PwC’s My Life Connected report suggests that the rise of professional networking platforms, freelancing platforms, remote working apps and global web conferencing platforms has contributed to the rise in this market.

Jon Andrews, head of global people and organisation practice at PwC, said more and more people are using the technology of the connected work market to dictate where and when they work, and for who, and that HR professionals need to keep up with the fast pace of change.

“Contract work is in many cases trumping full-time, permanent roles for people due to the flexibility, autonomy and control it offers,” he said.

“In five years, we could easily see a world of work where people are more likely to see themselves as members of a particular skill or professional network, than as an employee of a specific company.

“This new technology could help businesses to become more agile, fill their skills gap and respond to market disruptors,” he added.

However, separate PwC research with around 10,000 employees, and 500 HR professionals from China, India, Germany, the UK and the US, suggested the majority of HR teams are not doing this. Results outlined in the Future of Work report showed that just 31 per cent of businesses across the world are building their future talent strategy around the rise of the portfolio career and are hiring a diverse mix of people on an ad-hoc basis.

This is despite 46 per cent of HR professionals predicting that at least 20 per cent of their workforce will be made up of contractors or temporary workers by 2020.

In a recent People Management article, Alex Wood, a research associate in the department of sociology at the University of Cambridge warned that if employers and HR didn’t “get to grips” with the changing workforce of the future, it could have a detrimental effect on employees’ mental health.

Andrews said: “The rise of the gig economy does raise questions about workplace protection in the future – such as pensions, benefits, healthcare.

“How will this be provided and how will employers look after a workforce that could be very transitional in nature?”

According to the PwC ‘Future of Work’ report, 44 per cent of global respondents said the most important aspect they looked for in a job is security, while 29 per cent of employees wanted a chance to take control of their career.

Two thirds (64 per cent) of respondents believe that technology will help to achieve some of these goals.

The consultancy firm said the connected work market presented a “huge opportunity to employers, recruiters and businesses”.

In conclusion, PwC asked: Will employers be driven to adapt through innovation, or simply forced to because of changing demographics?