The gig economy is a top trend to watch in terms of workforce strategy. Research sources define contingent workers differently, but the consensus is that by 2020 nearly 40% of the workforce will be non-payroll workers. The attraction of moving from gig to gig is particularly strong in younger workers. Younger workers came of employment age watching the older generations be subject to layoffs, RIFs, offshoring of jobs and other employment actions that pretty much destroyed the concept of lifetime employment with a single organization. They prefer to chase interesting and exciting assignments and not be locked into one organization.

We currently exist in a kind of hybrid employment system, utilizing both W-2s and 1099s to get the work done.  The real challenge is that most of our HR polices and workforce management practices were developed for payroll staff, starting with the big one: performance appraisal systems.

The whole backbone of ratings and write ups simply does not apply to a gig worker. But it is extremely foolish to think you do not need to provide performance feedback to a gig worker. They need coaching and guidance the same as any other worker. Without performance feedback, a gig worker has to guess whether or not they are doing the work you are expecting them to deliver. Guesswork is never a good management practice.

Here are my top tips to use to successfully manage gig workers:

  • Treat the gigs the same as your payroll staff. Temporary workers are often treated like second class citizens, not included in planning sessions or even social events. The attitude conveyed is that they are the hired hands, just do the work and leave. This attitude does not allow you to tap their broader knowledge and experience nor does it entice top talent to stay.
  • Provide coaching, recognition, feedback. The need for recognition and feedback is not limited to how you are paid. It is a human need. Providing positive reinforcement motivates and engages while ensuring that the positive behavior is repeated and shared.
  • Train managers on the similarities and differences between workers. Not only do they need to understand the importance of coaching and feedback, they need to also be adept at assessing talent and performance. Top talent needs to be retained, moved to more challenging assignments, not let go at the end of the gig. The longer you can retain top talent, the more return you will get out of the recruitment and assimilation work.

All indications are that the gig workforce is here to stay. Employers who learn how to tap this talent pipeline will be accessing a pool of skilled and productive workers. But success in managing the hybrid workforce requires leaders to think differently about their legacy workforce management systems. And the cornerstone of success is to manage workers based on their human needs for coaching, feedback and recognition, and not to manage them by their status with the IRS.