Not so long ago, taking a trip to New York City meant riding around in yellow taxis and staying at the Plaza Hotel. Now, for many, it means staying at an Airbnb and hiring Uber drivers to chauffeur you around.
This transformation illustrates the incredible rise of the gig economy — something that’s revolutionizing the way we, as consumers, live our day-to-day lives. Just by launching an app, we can instantly hire couriers to deliver our groceries, last-minute babysitters to watch our kids on date night, or even someone who will happily move the 300-pound sofa that’s been gathering dust in the garage.
The gig economy is also vastly changing the way people work. Currently, more than 160 million people in the U.S. and Europe engage in some form of independent work. These are individuals who commonly make a living by completing one-off tasks on their own terms. They decide their hours and determine their deadlines, and most can even choose their compensation. In other words, many of them can be considered “one-person businesses.”
While the gig lifestyle certainly appears to suit the wants and needs of modern consumers and workers, what remains to be seen is how corporate America embraces this growing trend.
Gravitating Toward One-Person Businesses
On the surface, it may seem like this ongoing gravitation toward gig work poses a threat to the health of traditional corporations. What will happen if a majority of skilled workers shun the 9-to-5 model and elect to start one-person businesses instead?
Regardless of whether this scenario becomes reality, I believe tomorrow’s smart corporations will choose to embrace the gig economy with open arms and become consumers themselves. In the process, they will adjust their staffing structures and hiring practices by:
- Hiring niche skills with one click. At its core, the gig economy is comprised of hundreds of marketplaces that serve as matchmakers between buyers and one-person businesses. Sites like TaskRabbit, 99designs, and Upwork fall squarely into this category.Individuals or corporations can log in to these platforms, browse the available talent, and, with one click, hire a one-person business that suits their needs. Then, once the assignment is complete, they can click their mouse one more time to make a payment, and everyone can move on with their lives. Gone are the days of maintaining lists of preferred freelancers, calling them one by one, negotiating compensation rates, and dealing with capacity headaches.
Moving forward, expect the number of gig marketplaces to grow from hundreds to thousands — and expect them to become increasingly specialized around niche skills. Corporations can and will turn to the gig economy to accomplish tasks in virtually every department: finance, IT, human resources, R&D, and beyond. Also, expect to see one-person businesses emerge that can aggregate work from multiple marketplaces to deliver more complex value propositions.
- Scaling on demand. According to a LinkedIn study, modern employees — especially young ones — are job-hopping nearly twice as much as they did 20 years ago. This, paired with the growth of the gig economy, will lead traditional corporate staffing strategies to wisely undergo a fundamental shift.
One-person businesses will be able to perform many of the same functions as full-time employees — but at a lower cost and with a greater degree of flexibility. Therefore, corporations will be empowered to rethink their staffing models and move some areas of the business to “on demand” as opposed to “full time.”Thanks to the high-quality talent made readily available by the gig economy, corporations can choose to scale up and down in real time based on their current staffing needs.
- Refocusing middle management. Currently, at most corporations, a large portion of middle management’s time is spent on administration. These professionals are tasked with building teams, developing schedules, tracking accomplishments, and making sure employees are engaged. However, as the reliance on one-person business expands, many of these duties will either become irrelevant or highly streamlined.Gig marketplaces are transparent environments where scheduling, accountability, motivation, and quality are all managed by an invisible hand. One-person businesses are rated and reviewed by those who hire them — and this feedback can make or break the number of assignments that are sent their way. It’s in their best interest to always be punctual and produce excellent work; otherwise, their poor track record will quickly deter buyers from hiring them.
Because of this self-contained oversight, we will begin seeing corporations treat one-person businesses as autonomous entities and, therefore, refocus their middle management’s time toward innovation and progress rather than oversight and coordination.
The rise of the one-person business is an inevitable reality as technology evolves and the workforce becomes more global. Hopefully, all involved parties will be better off as employees gain more autonomy within their careers and employers are granted flexibility, convenience, and confidence in their staffing decisions. Still, a lot remains to be seen.
It will be fascinating to watch corporations integrate one-person businesses into their operations — and as they do, we’ll continue to see traditional workplace structures transform before our eyes.
Originally published on the Observer on 11/18/16