What makes the “gig workforce” so popular?
The growing popularity of the “gig workforce” is associated with several factors, such as –
On the employers’ front:
- Economic uncertainty: With the fear of recession, many companies choose to invest in temp-to-perm employment and interim staffing than FTEs to meet their productivity demands.
- Cost-effectiveness: Employers save enormous overhead and staffing costs as the “gig economy” allows more workers to work fewer hours. They are able to cut down on office and training costs (since most “gig workers” are already skilled). Additionally, employers are not bound to keep “gig-based employees” on the payroll. Or pay them perks or benefits like life and health insurance, retirement benefits, paid leaves, etc.
- Access to skilled talent: With the support of a temp staffing agency, companies can match supply and demand quickly using project-based staffing models.
On the workers’ front:
- Millennials and boomers alike are driving interest in part-time and contract staffing in the USA, moving away from traditional 9-to-5 roles.
- Growing demand for flexibility, work-life balance, and independence to adjust schedules around priorities.
- An inclination towards demanding/challenging jobs/roles that capitalize on skills. Workers don’t want to do run-of-the-mill jobs. They want their opinions, and suggestions put on the table. They seek equal participation.
What does the rise of “gig economy” mean for staffing agencies?
There was a time when the “gig economy” was seen with a lot of apprehensions. The companies weren’t sure whether the so-called ‘on-demand staffing’ would deliver as expected. There was a lot of debate around whether “gig jobs” are actual jobs. Should independent workers be treated equally or at par with FTEs? Are they sincere and accountable? The thoughts/opinions around this were geographically distributed and were subjected to cultural norms—the standard against which these “gig jobs” were measured varied. In most aspects, assembled careers or side jobs were looked down upon. Hence, many staffing agencies never considered “gig workers” holistically in their service plans.
However, a monumental shift has occurred in the last few years. Independent workers have found more visibility. Modern employers are increasingly turning to staffing agencies for contract workers and direct hire staffing services to meet short-term and critical project needs.
Far from becoming obsolete, HR staffing firms for gig workers have adapted. They’ve taken on new roles—streamlining hiring processes, vetting candidates, and ensuring compliance with payroll and benefit structures through corporate payroll services and vendor management system solutions (VMS).
Contrary to popular belief HR staffing agencies have not lost their relevance due to the growing gig economy. Their role has expanded and transformed into a more nuanced one. How?
Despite the meteoric rise of the on-demand workforce, hiring a worker can be a tedious task for small and even mid-level companies. Although there are several channels, online freelancing platforms through which companies can directly hire a contractor or a freelancer, finding a well-qualified, highly skilled worker can be taxing. If found, vetting them can be cumbersome.
Plus, there is no guarantee the worker will stick around. Furthermore, employers cannot ignore discrepancies around compensation and matching exact skill sets with the job. Even if the employers successfully overcome all these hurdles, they will always doubt the worker’s sincerity, stability, and commitment to the job. That’s why HR staffing agencies have an unmatched significance.
Their scope has broadened with the arrival of the gig marketplace – from finding the right talent to allocating it to the right place to supporting it comprehensively. Companies can depend on staffing agencies to close critical gaps in talent management and build human capabilities that think and scale impact.
How staffing firms can incorporate a gig workforce in their service plans?
- Customize their offerings. As the market evolves and the “gig workforce” picks up steam, new fundamentals define an organization’s human capital requirements, work is no longer defined by jobs but by skills and experience. Workplaces become agile, and the need for staffing agencies to customize their offerings according to the needs of the employers becomes a must. By opening their doors to gig workers, freelancers, and contractors, temp staffing agency can collaborate more meaningfully and expand their work scope. What’s worth noting is that staffing agencies understand the local talent well. They are also well aware of the openings and can work with employers to bring the best talent on board.
- Adopt technology. From workforce management solutions for startups to tech-first candidate platforms, digital transformation is key. Organizations have traversed into a more agile and digitally connected landscape, and the new workforce ecosystem has become more diverse and technologically dependent. With their tech-saturated upbringing, the millennial “gig workforce” shares an inextricable relationship with technology.And, recent studies have indicated that even baby boomers are catching up on their digital adoption post-pandemic. Hence, digital transformation is essential for staffing agencies to up their game and successfully foster relationships with clients. Agencies must understand and use managed service provider staffing (MSP) tools to meet expectations.
- Act as an intermediary. Addressing human capital requirements has become highly complex for organizations primarily because jobs have become more challenging with the advent of technology, and there is a growing demand for specialized skills. Workers are expected to upgrade themselves every few months. If a worker doesn’t fit a particular requirement due to a lack of skills, the staffing agency can communicate it to them. The 24*7 digitally connected generation thrives on communication. They continuously seek feedback and improvement areas, so HR staffing agencies can be beneficial in that respect. Modern HR providers play a key communication role—managing expectations, ensuring market-rate compensation, and providing support via staffing solutions for businesses and gig workforce trends analysis.
- Update their knowledge. The gig economy is here to stay and to be a part of this gigantic marketplace, the new league of workers is putting its best foot forward. They are taking additional training, upgrading their skills and knowledge, multi-tasking, and securing new, diverse income streams. With access to new tools like temp workforce management tools, agencies can empower workers through upskilling resources like webinars, podcasts, and career guidance. They can host engaging webinars and podcasts on the evolving employer expectations, prepare “gig workers” for the requirements of the future, help them bridge the skill gap, and be ready to excel in the VUCA world. They can also act as mentors. Sometimes, even highly qualified workers resist picking up a role or signing up for a job they are highly suitable for. The staffing agency can convince them that they are the best match and fit the bill perfectly.
Staffing agencies are not becoming irrelevant—they’re evolving. The rise of the gig economy is not a threat but an opportunity to expand reach, refine offerings, and leverage tools like recruitment process outsourcing (RPO) and VMS solutions. Agencies that embrace this shift—like Interim HR—position themselves as indispensable partners for employers and professionals alike.
Welcome to Interim HR, —your strategic partner in this new world of boundaryless work, contingent roles, and dynamic talent ecosystems.