Are Gig Workers the Answer to a Manufacturing Recruiter’s Stress
The rise of the gig economy has undoubtedly brought about a paradigm shift in the traditional landscape of working. But a gig economy is not a new phenomenon. In fact, the roots of a gig economy can be traced back to the 1990’s. At that time, gigs mostly encompassed creative jobs. But as every industry vertical embraces and adapts to the digital age, gigs are covering a much larger ground of potential jobs.
Additionally, the pandemic has fast tracked the spread of the gig economy with rising dependency on internet based working. Today gigs are not limited to driving for Uber or helping a local restaurant do a little door to door marketing.
Let’s under the basics. What is a gig economy?
Essentially a gig economy is a shift in the hiring strategy of several industry verticals where organizations hire independent firms, consultants and freelancers to assist with specialized business functions, generally on a requirement basis.
Why is the gigs culture so popular?
Well, gigs are essentially contractual or part time assignments that tend to be a whole lot flexible than full time jobs. A 2015 survey report showed that 53 million Americans were working as freelancers that year. This report predicted the number to rise by 40% in 2020. Obviously this projection would have been much higher because of the COVID-19 pandemic. While these are just statistics for the United States, a 2019 report by Hayes reported that 24% of workers across 19 countries were full-time gig workers. Gigs are also popular because they can make you money. According to a study conducted by ADP Research Institute, the gig economy accounts for one-third of the world’s work force. The gig economy is also expected to cross a $500 billion mark in gross volume in the next five years.
Today, gig workers are sprouting up anywhere. Although gigs have their fundamentals set in being creative and knowledge intensive assignments, they are dramatically spreading to other industry verticals including customer service management, remote sales, and software development. From part time retailers and graphic designers to registered nurses and software developers, gigs have become a reality. But what’s more interesting is that gigs are now a part of verticals that don’t usually hire part timers. We are talking about verticals like manufacturing.
Although gig culture amalgamating with manufacturing is an unlikely combination, it actually works in favour of both the employer and the employee. The rising cost of providing health care to full time employees, increased over head costs, the integration of artificial intelligence and machine learning are some of the factors that are contributing to even manufacturing industries employing part time and contractual employees. Manufacturers have started to leverage gig economy fundamentals and are actively recruiting temps instead of full time employees. The fact that most of current workforce belongs to the millennial generation and tends to pursue a healthier work life balance while juggling their finances is another factor why workers don’t mind taking up jobs in manufacturing.
Let’s understand why manufacturers are opting for recruitment flexibility. Here are the benefits of hiring part time and contractual workers.
An innovative step towards overcoming the manufacturing skill gap
According to research from Deloitte and The Manufacturing Institute, more than 3.5 million new manufacturing jobs will be created by 2025, but about 2 million of those jobs will go unfilled because manufacturing companies will be unable to hire workers with the right skills.
Innovative solutions such as 3-D printing, robotics, machine learning and artificial intelligence are changing the manufacturing landscape. As such manufacturers might not have to depend upon skilled labour to help with the unskilled part of the production process. With machines taking up a large portion of the manufacturing process, it looks like hiring temps for jobs that don’t require much skill might work for manufacturers after all.
That being said, it looks like the gig economy might prove to be an interesting solution for manufacturers looking to overcome the looming skill gap. About 48% of people in the gig economy have college or advanced degrees. About 15% of them have skills in engineering and another 19% in IT. This workforce can easily help address the skill gap issue faced by manufacturers.
Reduced overhead costs
Costs like group insurance, health benefits, dental, vision and even a pension plan are a regulatory requirement for any organization exceeding a specific quota of full time employees. These expenses can cut into a large amount of an organization’s profits. Manufacturers generally require a large number of people on their workforce to meet customer and market demands. This means manufacturers will be required to adhere to all employee benefits that will eat into their earned capital. By hiring contractual or part time workers that will work from project to project for a specific contractual period, manufacturers have found a loophole and can save on additional costs. This is a win win situation for both parties as manufacturers are successfully bringing down overhead costs and temporary employees are free to work elsewhere and continue making money from more than one source.
More flexibility, better efficiency
It is a common misconception that people who are actively working temporary positions are looking to get hired full time. According to a 2021 Statista report, around 68 million Americans prefer to work as free agents. This gives them flexibility to manage their hours while being able to demand a reasonable fee for their time and effort. Because the jobs are not permanent, free agents are likely to be more efficient and tend to work as per their service level agreements. This in turn provides an increased level of efficiency as workers will be focussed on the amount of time they need to complete on an assignment.
Better employee engagement
For a manufacturer habituated with the traditional recruitment culture including excessive dependency on a paper trail, monitoring dedicated employee hours etc, a gig culture cam take some getting used to. However, once a manufacturer takes the leap, they will find that it is easier to engage with contractual employees and focus on improving their efficiency instead of dedicating time to resolving everyday employee issues and concerns. By hiring temps, a manufacturer is essentially eliminating a good deal of everyday employment issues and can turn their efforts to better employee engagement. From talent acquisition to skills assessment, manufacturers can easily integrate temps into their work process and achieve a reasonable degree of connect with contractual employees.
While the spread of the gig economy in manufacturing might prove to be a major stress reliever for manufacturing recruiters, it is important for manufacturers to keep in mind that they must actively initiate programs like cross training, offer on the job training, allow flexible work schedules and offer a nurturing environment that encourages work life balance. This will not only boost the image of manufacturers as organizations but also attract more gig workers looking to work for a positive experience.