Creating a Sustainable Organizational Culture in the Gig Economy

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by Paul Randhip

It is almost passé to talk about the rising prominence of the Gig Economy. Yet, many companies are still playing catchup to this snowballing phenomenon and are grossly underprepared for this high-churn workforce scenario that is approaching them with breakneck velocity.

For those that have been living under a rock – The Gig Economy refers to the increasing number of workers abandoning traditional full-time employment in favor of working independently on a task-by-task basis for various organizations.

For the record, the concepts of ‘freelancing’ and ‘contracting’ have been around for a very long time (historical trivia – it is believed that the word freelance came about in the early 1800s when it was used to refer to an independent medieval mercenary (free) who would fight (lance) for whichever person paid them the most!). So, why this sudden buzz around a ‘Gig’ economy, one may ask. Where freelancing was most often thought of for creative work (graphic designers, web designers, content developers) and contracting was thought of for IT-related positions, a large number of roles in fields as diverse as Finance, Accounting, and healthcare, across varying levels of seniority (including senior-level executive positions), have started to make their way into the Gig Economy.

The emergence of digital talent platforms (such as the Global Specialists Network and Upwork) and programs such as FlexForce that cater to freelance professionals has further catalyzed this growth. It is forecasted that by 2020, contingent workers will exceed 40 per cent of the US workforce (as per Intuit 2020 Report: Twenty trends that will shape the next decade). 

The appeal of freelancing to workers has been in the autonomy, freedom, and better work-life balance it provides them (amongst several other factors). Organizations too enjoy numerous benefits from working with freelancers such as a fluid workforce that is adaptive to change, wider access to specialized talent, cost savings, and an increase in productivity.

Caveat Emptor! Such benefits though come with their fair share of challenges and risks. A 2016 Deloitte survey revealed that one of the top three challenges that executives often cited regarding the freelance economy was ‘Contingent workers unreceptive to corporate culture’

So, what is Corporate Culture? Search and you will find at least a couple of dozen definitions, but in summary – “an organization’s tone, operating style, standard of behavior and the invisible hand that guides the organization”

And why does it matter? As numerous studies (and history) have shown, Corporate Culture has a direct impact on the long-term health of a brand. An example of such research is the comprehensive study carried out by Duke University’s Fuqua School of Business that showed the unequivocal link between Corporate Culture and the company’s profitability.

If you are already thinking, ‘Yes, I get it. Culture is important. Let’s just enforce it’, unfortunately, in a freelance economy this is easier said than done. In a gig economy where people may be associated with the organization for just a short period of time, there is often lack of adequate time to imbibe the culture of the organization. And the bigger problem, freelancers may not care as much for the organization’s culture knowing that their tenure is time-capped.

If you are a leader in an organization that is either already participating in the Gig Economy or is likely to in the near future, consider the following 5 practical approaches to getting your Organizational Culture to weather the Gig Economy

  1. Consider including ‘Screening for Culture’ as an important part of your interviewing/hiring process even for temporary positions. And, during recruiting and onboarding, talk about the culture and the opportunities for improvement.As an example, Wayfair, an organization that has reported 48% YOY growth in recent years, has taken deliberate steps from day one to create and maintain an entrepreneurial and collaborative culture. They specifically hire individuals who are willing to think outside of the box to solve problems and develop new initiatives, and they empower employees to take measured risks to drive innovation, according to Kate Gulliver, Vice President of Talent Operations at Wayfair.
  2. Empower your workforce to make Culture-Driven Decisions. And, recognize and reward those that put your Organizational Culture to action.According to Herb Kelleher, founder of Southwest Airlines, “If you create an environment where the people truly participate, you don’t need control. They know what needs to be done and they do it. And the more that people will devote themselves to your cause on a voluntary basis, a willing basis, the fewer hierarchies and control mechanisms you need.”Consider structuring bonuses and increments to not only profit-based performance, but also values put in action. In other words, reward for not just ‘what was accomplished’, but ‘how it was accomplished’. The recent multi-year scandal that rocked Wells Fargo involving a skewed sales-driven culture could have lessons for other organizations. For example, at Barclays, in the wake of the LIBOR-rigging scandal, CEO Antony Jenkins proposed plans for integrating ethical behavior standards into the company’s performance management system that determine the size of bonus pay.
  3. Do not pass out handouts outlining your organizational culture and expect temporary workers to understand and adopt. Instead, use stories to communicate the company culture.A good example to emulate is that of Nordstrom where the story of how a Nordstrom employee offered to wrap a gift from their rival Macy’s is often told to new hires. Your employees need to know that your values are not just laminated plaques but are actually being lived. And, senior leaders should not only constantly become storytellers themselves, but should also encourage co-workers to become storytellers.
  4. For outward-facing periphery roles such customer service, sales, and procurement, use tenure as an important measure of qualification for such roles.David Cush, the chief executive that helped sell Virgin Atlantic to Alaska Air for more than double its value from just two years ago, famously quipped “We will outsource every job that we can that is not customer-facing.”, reiterating the importance of having permanent in-house employees for customer-facing roles.
  5. Articulate and illustrate the impact of the Organization’s Culture on the Community.For short-timers and part-timers, while employing organizations are variables, the communities that they live and partake in, are often a constant. While millennials are often perceived not to have deep relationships with the organizations that they are employed with, many are invested in and care about social causes and community activities. 

Consider joining this conversation with some of the methods that you and your organization have used to make your culture thrive in the Gig Economy.