3 HR Challenges Created by the Growing On-Demand Workforce

Our world is overflowing with on-demand options. On-demand television programming. On-demand order processing. And now, on-demand employment.

On-demand work has become preferred, especially for workers disillusioned by traditional workplace models. Many professionals discovered that making themselves available for occasional contract work can be just as lucrative — and sometimes more fulfilling — than being tethered to a single employer.

How many people have jumped into the on-demand fray? As a Harvard Business Review article points out, about one-third of workers are independent contractors. And that group is only growing, presenting plenty of new challenges to the hiring status quo.

The more companies can prepare for and embrace the challenges of on-demand workforce management, the better positioned they will be moving forward.

Navigating On-Demand Staffing Needs and Challenges Facing HR

On-demand working and gig economy staffing are both catching on as companies from several industries embrace it — and associated technologies — as a competitive necessity. However, managing your workforce of gig employees presents its own struggles:

  1. Rapid Training and Onboarding

Most companies have robust onboarding and training programs they build over time to acclimatize new workers. That’s fine for full-time employees, but it won’t work with on-demand employees pulled from the fast-paced gig economy. On-demand workers need the same level of training as their traditionally employed peers, but they don’t have the time to undergo extensive workshops or mentoring sessions.

The workaround for this issue means companies need to rethink how to educate their incoming hires. Unfortunately, McKinsey reporting indicates less than one-third of organizations invest in revamping their development programs. To be successful, companies need to prioritize the rapid training of independent contractors and transform their onboarding protocols accordingly.

  1. Continuing Workflows

One eventual pitfall of hiring a constant flow of on-demand workers is a steady loss of legacy knowledge. As each freelancer leaves, the company loses valuable insights and could face disruptions to business continuity.

A way to address this situation is through workforce management that balances the number of temporary gig workers and permanent employees. That way, the gig workers can enhance the success of the business model without causing significant interruptions in operations when they leave.

Take your peak demand schedules into consideration when deciding when to incorporate gig employees into your organization. When consumer demand peaks, adding flex workers alongside your traditional full-timers will expand your capacity to meet consumer demand.

  1. Compensating Gig Economy Employees

Thanks to the Great Resignation and a tight labor market, we operate in a candidate’s market. To woo quality independent contractors, employers will need to get creative when it comes to compensation plans.

For instance, those plans might end up including perks typically reserved only for permanent employees, such as health benefits, paid time off, and 401(k) opt-ins. Harvard Business Review suggests that making benefits consistent across all employee classifications will become an expectation among on-demand employees.

Currently, most independent contractor arrangements don’t allow for this level of connection between workers and employers — but it’s only a matter of time. In the interim, partnering with a staffing agency to implement an on-demand workforce solution is a great way to tap into this talent pool without having to worry about incurring extra benefits costs.

At this point, we have not yet hit peak levels of on-demand work. As more educated and experienced professionals forego standard employment agreements, they’ll expect companies to keep pace. Businesses that adapt fastest will position their brands to become leaders in the field and attractive landing places for talented freelancers.

Integrity Staffing Solutions is a full-service staffing agency and ranks in the top 2% of agencies across the country for quality service based on ClearlyRated’s “Best of Staffing” client survey. To learn more about Integrity or for help with your hiring needs, visit integritystaffing.com or call 833-446-1300.