March 12, 2018 – Today, a growing number of workers are opting for alternative employment models over traditional, full-time, permanent roles. Part-time, contingent, contract, temporary, freelance, independent contractor, on-demand online and platform working – call it what you will, they are all on the rise. Businesses and those who work for them want choice, flexibility and alternative ways of working that build resilience for less predictable futures.
According to a new report by ManpowerGroup, 87 percent of workers will perform this kind of “NextGen Work” in the future. “The gap between the skills people have and those employers need is widening, polarizing workforces and populations around the world,” said Jonas Prising, chairman and chief executive officer of ManpowerGroup. “Companies have to find talent from new sources and do more to develop and keep their people engaged. At the same time, what people want is changing. They are working longer, learning more and seeking a better balance between work and home.”
Not everyone wants to engage as a full-time employee and organizations don’t always want that either, said Mr. Prising. “The ‘Monday-Friday nine to five job for life’ has moved on and much of the jobs growth over the last 10 to 15 years has occurred in non-traditional, alternative ways of working.” Still, the number of people working in gigs is but a small part of the labor force. “However, those seeking flexible, non-traditional ways of working are significantly greater,” said Mr. Prising.
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Shifting to Gig Work
One is more inclined to see “NextGen Work” in countries with a higher proportion of younger workers, in particular younger Millennials (ages 18 to 24), said ManpowerGroup. India and Mexico lead the way with 97 percent of workers open to freelance, contract, temporary or independent contractor work. Mature markets, often with high levels of employment, are close behind. The U.S., with decades of entrepreneurialism and dynamic job flows, together with the flexible labor markets of the U.K., Italy and Australia all display an openness to alternative work models, encouraging job creation and providing more pathways into the workforce, said ManpowerGroup. Germany, Netherlands and Japan are more resistant to freelance work, while others are warming to greater flexibility following the global recession.
People want different types of careers at different times in their lives. Eighty-seven percent of the respondents said they would consider temporary work for their next job or in the future. And demand for gig work has risen consistently for decades. Across the European Union, temporary work almost doubled from eight percent to 14 percent from 1984 to 2017. In the U.S., it increased by 56 percent from 2005 to 2017 and continues to grow, said ManpowerGroup.
Why People Are Choosing Freelance Work
The most popular reason people choose gig work is to earn extra money, to supplement their income and do what they choose. Sixty-five percent of households in developed countries were earning the same today as they were in 2005 – and the recession, automation and low productivity continue to impact wages around the world. Women choose “NextGen Work” to earn additional income slightly more than men (39 percent vs. 37 percent) and young Millennials (18-24) are the most likely to choose freelance work to earn extra income, said ManpowerGroup. For many, gig work helps supplement salaries, savings or pensions, so people can find the time and money to do what they value most. For others, alternative work models allow them to use in-demand skills and earn top dollars for highly skilled contract positions.
Workers Continue Taking Side Gigs to Bridge Pay Gap
Got a side gig? You’re not alone. According to new CareerBuilder research, nearly a third of workers (32 percent) do, compared to 29 percent last year. And more women than men have side work — 35 percent versus 28 percent.
The second most popular reason people choose gig work is to learn new skills. Eighty percent of those ManpowerGroup surveyed see gig work as an opportunity to learn and use new skills. Whether formal company-driven development, on-the-job training or simply experience-based learning by doing, for most people work is a place to hone and improve skills. In the midst of a skills revolution, when 40 percent of employers cannot find the skills they need and 65 percent of the jobs younger Millennials (18 to 24) will do don’t exist yet, acquiring new skills and experiences has never been more important to remain employable. Older Millennials (25 to 34) say they choose “NextGen Work” to develop their skills than any other generation. Men also prioritize skills development slightly more than women, while women are more likely to choose gig work to balance their time and try out different roles. It will be skills development too that helps the 19 percent who feel “NextGen Work” is their only option at the moment, to expand their employability and future choices.
Globally, nearly 40 percent of people say schedule flexibility – especially flexible start and finish times and the ability to work from home – is one of the top three factors when making career decisions, said ManpowerGroup. For many people, the ability to balance caring responsibilities can make the difference between working or not. Both men and women aged 25 to 39 are just as likely to choose gig work so they can spend more time with family.
Research released by LinkedIn and job board Snagajob found that there are currently 78 million hourly workers in the U.S. comprising 59 percent of the entire country’s workforce. Seventy-one percent of hourly workers are under age 30. This makes sense when one considers that the most common reasons people give for choosing hourly work involve helping pay for school or helping start their careers. Among other hourly workers, 13 percent are in their 30s, eight percent are in their 40s and eight percent are 50 or older.
A possible reason for the rise of the gig / on-demand / hourly economy might be that companies find the use of temporary / contract workers to be a new approach to business structure and employment. This approach has been on the rise, with companies utilizing such workers to fill positions at a time when talent shortages seem widespread.
Massive Shift to Contract Employment Underway
Most workers (70 percent) and employers (68 percent) agree that by 2025 a majority of the workforce will be employed in an “agile capacity.” This is a wake-up call for business and HR leaders to quickly embrace and prepare for coming disruptive changes impacting how, when, where and by whom work is conducted.
Rise of the Gig Economy
A recent study released by Randstad US found that as early as 2019 as much as 50 percent of the workforce will be made up of agile workers. Nearly four in 10 workers (39 percent) said they are likely to consider shifting to an agile arrangement over the next two to three years. This movement is fueling an equally aggressive adoption of new workforce models that tap into both permanent and agile employees to combat staffing shortages, leverage globalization and fuel greater innovation for organizations.
The report concluded that by 2025, 52 percent of C-suite executives said their organizations would be much more committed to building an agile workforce; the average employer expects 68 percent of their workforce to be comprised of agile talent.
A separate study from CareerBuilder and Economic Modeling Specialists International concluded that hiring temporary and contract employees can help businesses sidestep talent gaps and remain nimble. The study showed that more companies will be tapping into this labor segment, with temporary employment expected to add 173,478 jobs from 2016 to 2018 – an increase of 5.9 percent.
“Today, nearly three million people are employed in temporary jobs, and that number will continue to grow at a healthy pace over the next few years as companies strive to keep agile in the midst of changing market needs,” said Kyle Braun, president of CareerBuilder’s staffing and recruiting group. “Opportunities are opening up in a variety of occupations and pay levels, and this is a trend we’re seeing in a wide range of industries and company sizes.”
“Temporary employment benefits both sides of the labor market,” said Mr. Braun. “Hiring temporary and contract workers helps companies stay flexible and adapt quickly to changing market demands. For workers, it opens doors for those who want to utilize various skills, build relationships with different organizations and explore career options.”
Contributed by Scott A. Scanlon, Editor-in-Chief; Dale M. Zupsansky, Managing Editor; Stephen Sawicki, Managing Editor; and Andrew W. Mitchell, Managing Editor – Hunt Scanlon Media