From HR.BLR.com, Tami Simon discusses the gig economy in terms of matchmaking — a terrific analogy. Tami writes:
A matchmakers’ business model centers on making connections. In the days of “Fiddler on the Roof,” the connection was made by an old woman named Yenta. Today, many matchmaking sites promote “uniquely designed” computer programs that promise to find a person’s perfect match (e.g., match.com, zoosk, eHarmony).In other words, the matchmaker simply makes the business transaction possible. And much to Jane Austen’s Emma’s delight, this business model seems to work. According to eHarmony’s website, 438 US couples marry each day as a result of being matched on the site. Who knew?
Business is beginning to apply this same principle to talent. Uber, Lyft, and Airbnb are very popular, and they essentially work the same way as an online dating service—matching someone who needs something with someone who can give it to them.
The number of people willing to do these jobs and the employers willing to employ these workers is growing. According to the U.S. Government Accountability Office, over 40% of the U.S. workforce is contingent and many of those workers fit the matchmaker and Uber model—and that number is rising. A new kind of work has emerged.
What explains the advent of this new worker? Indubitably, several factors contribute, but a few key reasons are:
- The rise of the on-demand economy (also referred to as the shared or gig economy).
- The desire—often attributed to the Millennial workforce—not to be tied to one employer that limits flexibility, quick advancement, immediate feedback, and varied work experiences.
- A decline of traditional “sticky” employee benefits such as the defined benefit pension plan and longer vesting schedules.
- In the U.S., the option to go to a public health exchange—brought about by the Affordable Care Act—rather than stay tied to an employer for health insurance coverage.
- Fewer ongoing employer expenses, such as Social Security contributions, paid vacation, workers compensation, limited or no benefit obligations, training, on-and off-boarding, and performance management.
- The continuing rise of organizations tapping into the global workforce.
- Contingent workers typically don’t require many overhead costs associated with permanent employees (e.g., real estate, technology, office supplies, and administrative support).
- The flexibility to increase and decrease one’s workforce quickly and find individuals with unique or specialized skills.
- Contingent workers are often more efficient because they don’t have competing projects or goals.
Read the full story at Latest HR News