Gig economy: freelancers and temporary workers enter the labor market

In a competitive environment where artificial intelligence, digitization and automation are causing significant upheaval, not only are workflows continuously changing, but so is who is doing the work. Executives predict an upward trend for the gig economy in particular: 79 percent worldwide expect contingent workers and freelancers to largely replace full-time employees in the coming years. That's one of the key findings of Mercer's new 2019 Global Talent Trends Study. The study provides insights into the views of more than 7,300 executives, HR professionals and employees across nine industries and 16 regions worldwide. Nearly three-quarters (73 percent) of executives worldwide predict significant disruption for their companies over the next three years. In 2018, only 26 percent predicted disruptive developments. In response to the upcoming upheavals, transformation processes are being initiated, but these entail significant HR risks. However, only one in three executives globally believes that their company is in a position to minimize such risks - and, for example, effectively reduce skills shortages or permanently overcome employee change fatigue.

Search for stability

In today's climate of uncertainty, employees are looking for stability. The study concludes that job security is one of the most important reasons worldwide why employees joined their company and the main reason why they stay. However, one in three fear that artificial intelligence and automation will replace their own jobs. One approach to giving workers a sense of security is to foster social relationships. This is also underlined by the study: employees who are healthy, financially well off and satisfied with their careers describe their role in the company as "focused on social relationships" and their work environment as "collaborative" - twice as often as employees who do not characterize themselves accordingly.

"The future of work lies in the ability to build relationships and networks and to create a work environment that appeals to today's employees. For this, it is necessary that employees have the feeling that they are not replaceable. It should also enable data-based individualization of offerings to employees. For example, corporate communications, benefits or training opportunities can be tailored to the needs and desires of employees," explains Kate Bravery, Global Leader of Career at Mercer.

Four top trends

Across all topics, the study identifies four top global trends that leading companies are pursuing in 2019:

• Align work with future value creation: Globally, 60 percent of companies plan to automate more and more workflows within the next twelve months. In terms of talent investment, executives believe job redesign has the highest potential for return on investment. This redesign also engages employees, 65 percent of whom want more clearly defined responsibilities. The challenge for HR management is to develop an integrated people strategy (an approach four times more likely to be adopted by high-growth companies) and conduct the right talent analyses to make informed decisions about the future size and structure of the organization. However, only one-third of organizations worldwide analyze the effectiveness of their talent strategies and understand the impact of building talent in-house, recruiting externally, hiring temporarily, or instead automating processes to save jobs.
• Build brand impact: For employees and job seekers, how a company conducts business and upholds its brand values matters. In a transparent world where social media is becoming increasingly relevant, the lines between a company's consumer brand and its employee value proposition (EVP) are blurring. To better reflect the contribution that temporary employees and freelancers, for example, make, many companies have evolved their EVP toward a Talent Value Proposition (TVP).The reason: successful companies want to ensure that their brand appeals to all employment groups. 68 percent of high-growth companies worldwide adjust their TVP for different groups (e.g., temporary employees), while among moderate-growth companies, only 47 percent make such adjustments. A company's total rewards philosophy is one area where brand values can shine: Successful employees are four times more likely to work for a company that provides equal treatment in pay and promotion decisions (78 percent vs. 18 percent).
• Making sense of everyday working life: A workday characterized by effectiveness and relevance is essential for retaining top talent. Successful employees are three times more likely to work for a company that enables fast decision-making (81 percent vs. 26 percent) and provides tools and resources to get work done efficiently (82 percent vs. 30 percent). Personalized and simple training plans are high on employees' minds - more than half (56 percent) of workers globally want curated training to help them develop their skills and prepare for future jobs. The concept of curated learning is nothing new. What is new, however, are its goals: The study shows that for employees worldwide, creative thinking and continuing education in technology are the most important skills to stay competitive.
• Initiate employee-based change: To ensure that employees are at the center of change, HR should have a say in business transformation. The study found that 61 percent of HR leaders worldwide are involved in planning major change projects and 54 percent are involved in implementing those plans. But only two in five HR leaders were involved during the ideation phase of transformation initiatives. HR departments see a lack of openness and commitment on the part of employees as major obstacles to the solidification of change: "Employee turnover" and a "decline in employee trust" are two of the biggest challenges worldwide in the coming months.

Source and further information: www.mercer.ch