Why You Should Embrace The Gig Economy For Strategic Advantage
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The Gig Economy: Gain A Strategic Advantage By Embracing It

In a world of finite resources, companies not only compete for market share but also top talent. As Learning and Development (L&D) makers, we compete for talented employees, their effort, and time.

The Problem

But managers and HR departments tend to operate from a perspective of fear, convinced that employees can only complete work if they’re supervised in an office. Most companies still adhere to a traditional labor structure of employing full-time workers, hoping to find the best talent within driving distance of an office. It makes sense to insist that employees all work next to each other on a factory assembly line. But, as knowledge workers, we now have email, Slack, Dropbox or Google Drive, and Skype that have collapsed virtual separation. We complain that we don’t have enough time or can’t find the right talent within realistic travel of the office, and yet we’re not taking advantage of how technology continues to shrink the virtual space separating us.

Technology has made communication and collaboration across space and time virtually effortless and with it, we’ve entered what many are calling the Gig Economy. Gig economy is the buzzword referring to a work environment that supports short-term contracts, often with individuals working virtually together regardless of physical location. This new paradigm is optimized for knowledge work, like L&D. Practitioners, leaders, and vendors should consider how they can best leverage this new take on employer/employee relationships, labor structures, geographic proximity, and employment options to capitalize on a global pool of talent.

Until recently, I worked from my home office, managing a small team of full-time Instructional Designers and technology administrators located in 5 different US states and contractors in India. I’ve since changed jobs and now commute most days of the week into an office. A few weeks ago, my former boss, who often tried to convince me to move to the California bay area so we could work in the same office, asked if I now saw the value of physically working next to my team as we caught up over dinner. The answer was still a resounding "no". I struggle to fill open positions with qualified employees limited to the comparatively small pool of candidates who live within a reasonable driving distance from the office. Unfortunately, the culture at this new company still only supports in-house employees. I still argued that large, full-time teams collocated at expensive office space is a relic of the past. (Over the years I’ve worked with many highly talented L&D professionals that would make an all-star team, if only we all lived within an hour’s drive of each other.)

Senior leadership in many companies are still afraid of the changing gig economy labor model. Here’s an example. At one California-based company, the upper leadership teams didn’t consider virtual employees a viable option. But they were missing the obvious. While most employees worked out of large central offices, they spent a significant amount of time collaborating virtually with coworkers in offices elsewhere across the United States. For example, an HR professional in the California bay area office might consult with a customer-facing manager in New Jersey. Or a project team for one division might consist of employees in offices located in Oklahoma, Colorado, and Nevada. They were ignoring the fact that they were already a virtual workforce occupying expensive office space.

L&D teams that don’t embrace the gig economy will quickly fall behind in upcoming years. They’re faced with 1 of 3 (or a mixture) major problems:

  1. They employ large teams made up of specialists with a few Project Managers and 1 or 2 generalists. The Project Managers and generalists are overworked and become a bottleneck for efficient workflows. They also inhibit innovation because they hire for a few skills and don’t have the ability to expand beyond the team’s inherent skillset. They turn into a one trick show—videos or simulations or ILT, for example—with rarely any crossover or blend.
  2. They employ large teams made of mostly generalists with few specialists or Project Managers. The quality of work suffers because the generalists are only capable of producing the most superficial learning objects. Often their lack of skill creates a stumbling block to efficiency, quality, and innovation.
  3. Hungry for the best talent but limited to a small geographic region, business leaders develop a limited vision and stunt the impact employee development has on customer performance and business success.

In each case, the current (and outdated) way of approaching labor slows innovation and productivity such that new knowledge work companies who have embraced the gig economy work environment will overtake and out-compete those who don’t.

The Solution

The following are reasons to consider an alternative labor structure in the gig economy.

Reason Explanation
Less time wasted Often full-time employees spend time in corporate meetings, listening to executives and other leaders. In gig economy work structure, contract specialists won’t need to spend valuable time in such meetings. They can focus and execute on concrete project deliverables instead.
More incentive for high-quality work done quickly While the labor hours for tasks may not drop much, calendar time for projects shrinks when working with contractors. Full-time employees sometimes tend to find that it makes more sense for them to work slowly and drag out project timelines to lessen their workload. Invariably, there are down-times when there is less work to do. In those situations, people still find ways to fill up their time so that they appear busy to their manager and executives, which means that during high volume times quality and efficiency is greatly impacted (Blanding, 2018). Contractors, on the other hand, benefit from short calendar timelines as they can then move on to other paid-work.
Diminished bias impact The gig economy may contribute to the solution of the gender wage gap. When companies use contractors, they can select the best talent from around the globe that’s within their price range. Biases, whether conscious or unconscious, don’t play a role in the price of labor (Dubner, 2018).
Increased diversity The gig economy adds to the diversity and thoughtfulness to which projects are approached.
Less scope creep As L&D managers can certainly attest, scope creep is rampant. But if project stakeholders can see a direct increase in the cost of a project due to their evolving or expanding ideas, they might be more hesitant to implement those changes.
Scalable/targeted workforce Depending on the needs of a project, contract Instructional Designers can be hired for their skills. For a project that requires scriptwriting and video development, Project Managers can hire a strong scriptwriter and then pass their work on to a contract ID with strong video development skills. For work that includes more face-to-face synchronous interaction, developers with those skills can be hired. And even more targeted and specialized skills can be hired in the short-term instead of the lengthy investment of time and money it might take to develop internally.
Increased Innovation Many organizations find themselves stuck in a rut, doing things the same way every time. That is occasionally due to a lack of expanding skills and often because it’s the way things have always been done. I call that "MMVS" (Make Me a Video Syndrome). However, contract IDs bring a fresh perspective to projects and benefit from seeing how things are done in a wide variety of organizations.
Strong core team Any L&D organization that leverages contract IDs must be sensitive to the needs of their clients. This means that a small core of strong Instructional Designers is important for the initial scoping and design of any solutions. They can then act as the Project Manager, interfacing with contractors and client stakeholders. Solid IDs are naturally strong Project Managers. They can work virtual of other team members.

Below is a list of items any L&D group should be aware of when attempting to leverage a remote workforce at least partially made up of contractors:

  • While contractors often bring a fresh perspective to any performance solution, they are motivated to keep the customer happy. This is another reason a small internal team of committed L&D generalists acting as Project Managers is important.
  • Company culture may shy away from using contractors. I experienced this when I first embraced a gig economy labor model that included only a small internal team of Instructional Design/Project Managers, using contractors for most of the design and development labor. Trust is often an issue and fear is the main driver of most executives, IT departments, and HR teams. Mike Tomlin, head coach of the Pittsburgh Steelers said, "We don’t live in our fears, we live in our hopes".
  • It takes courage to admit that contract work, and work done beyond the sight of managers, is the way to go. Many managers still don’t trust that if they can’t see work being done, it’s not actually being done.

Recommended L&D Team Structure That Leverages Gig Economy

When employing a virtual mix of full-time and contract L&D professionals,

  • You should use a relatively flat leadership structure spread across the organization, funded by the divisions they support.
  • One centralized CLO that leads cross-division performance improvement solutions that support enterprise goals and initiatives (like leadership development) and talent management is a great way to distribute funding for enterprise projects.
  • Maintain a small number of highly autonomous L&D generalists who work with management to form and execute a distributed strategy.
  • Employ contract workers as needed and as skill requirements dictate.
  • Create healthy relationships of trust with a couple of L&D chop shops as well as some go-to individual specialists.

Final Thoughts

L&D departments need to consider the business realities of their cost structures and ability to react to customer needs. There is a perception that contract workers cost more than salaried employees—and that is often true when comparing potential hourly rates. But it doesn’t consider the fact that you’re paying strictly for labor, not insurance, benefits, upskilling, or downtime.

References:

Blanding, M. (2018, January 31). American Idle: Workers Spend Too Much Time Waiting for Something to Do. Retrieved from Harvard Business School: https://hbswk.hbs.edu/item/american-idle-employees-are-wasting-way-too-much-time

Dubner, S. J. (2018, February 6). What Can Uber Teach Us About the Gender Pay Gap? Retrieved from Freakonomics Podcast: http://freakonomics.com/podcast/what-can-uber-teach-us-about-the-gender-pay-gap/

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