The "Gig" Economy and Compensation
Everybody wants to earn more and everyone thinks they're underpaid and undervalued. But are they?
Human Resources is great at building compensation grids and processes to analyse pay, measure internal equity and report on external competitiveness, based on the "job" an individual occupies. Maybe this where the rub is with employees? We're busy measuring a job's value and while the employee is measuring their personal value.
What if we stopped approaching comp from a job perspective and started approaching it from a gig perspective? Your value then would be based on you as an individual, what the market is prepared to pay you at the time of service delivery, and your ability to deliver on the specific task or gig that's required. In this type of scenario, you now become responsible for your own competitiveness. If you don't maintain your skills or if those skills aren't valued by the market, that's on you! On the flip side, if you're a hot commodity then you have the opportunity to earn what the market says you're worth and be paid for every hour worked.
If we fully embrace the gig economy, the need for traditional full-time jobs with full benefits will decrease. This means that employee tenures will be shorter requiring companies to move funding from long term incentives to short term performance. Compensation will need to evolve to more spot-market types of structures.
For the employee, you're no longer working all year in the hopes that your boss sees fit to give you a bonus! You're working for a fair market wage and for the recommendation you need to be able to get the next gig. Performance then starts to take care of itself as competition is allowed to drive behaviour.
So what does all of this now mean for organizations, workers and HR?
Organizations - the gig economy should give organizations the chance to streamline their operations, move precious dollars to in-demand talent and stop investing in people programs with limited ROI. The gig economy coupled with the growth in digital work platforms, will provide organizations with the opportunity to tap into global talent, rather than limiting their focus to talent available in their city or town.
Workers - those with in-demand skills can have rewarding careers that feed their passion, while limiting their reliance on one employer and earning attractive compensation.
HR Professionals - we need to let go of the idea of treating everyone equally. People aren't equal and the skills they bring and contributions they make are never equal. An uncomfortable thought for a profession built on principles such as pay equity.