The gig economy is on the rise: How can HR navigate the changing landscape?

The work landscape has transformed significantly over the past few years, and the gig economy has played a crucial role in this evolution. The growing popularity of independent work has had a major impact on HR practices. We shall discuss this in detail in this blog.

What does the gig economy refer to?

Short-term contracts, freelance, and independent workers constitute the gig economy. This shift in employment patterns presents both challenges and opportunities for HR professionals. However, they can play a strategic role in managing freelancers and contractors, building a flexible workforce, fostering a smooth transition from traditional to gig work, using advanced HR management software, and adapting HR practices to leverage the gig economy effectively.

The strategic role of HRMs

As the gig economy expands, HR professionals play a crucial role in effectively managing freelancers and contractors. Here are some strategies HR can employ to ensure the success of these non-traditional workers:

  • Clear Communication: Establish transparent communication channels to ensure freelancers and contractors understand their roles, responsibilities, and project expectations. This includes providing clear guidelines, deliverables, and timelines.
  • Onboarding and Training: Develop an onboarding process specifically designed for gig workers. Provide them with the necessary training and resources to excel in their assignments. This can involve creating a freelancer handbook, conducting virtual training sessions, or offering online resources.
  • Performance Evaluation: Implement fair and objective performance evaluation mechanisms for gig workers. Set clear performance metrics and provide regular feedback to help them improve their performance and foster a sense of engagement and accountability.
  • Relationship Building: Although gig workers are not permanent employees, focus on building strong relationships with them is necessary. Regular check-ins, recognition programs, and team activities can boost productivity by fostering inclusivity.

Building a flexible workplace

To take full advantage of the potential of the gig economy, HR professionals could adopt strategies that enable seamless integration of gig workers into the organisation. Here’s how HR can build a flexible workforce:

  • Redefine Work Models: Evaluate the organisation’s current work processes and identify areas where gig workers can contribute effectively. Create flexible job descriptions and project-based roles to accommodate gig workers’ diverse skills and expertise.
  • Embrace Technology: Leverage technology solutions such as talent marketplaces, freelancer platforms, software for employee monitoring, engagement, 360 degree reviews, payroll management systems, and project management tools to connect with and manage gig workers efficiently. These platforms can streamline the hiring process, facilitate communication, analyse engagement, and track project progress.
  • Foster Collaboration: Encourage collaboration between gig workers and full-time employees by creating virtual spaces for knowledge sharing and collaboration. This can be achieved through team collaboration tools, virtual brainstorming sessions, or project-specific communication channels.
  • Ensure compliance: HR must stay updated with labour laws and regulations surrounding gig workers to ensure compliance. Consult with legal experts to understand the legal obligations and rights associated with engaging gig workers.

How can HRMs foster a smooth transition?

Transitioning from a traditional workforce to a gig economy model can be challenging, but HR management systems (HRMS) can serve as valuable tools in facilitating this shift. Here’s how HRMS can support a smooth transition:

  •   Talent Acquisition: Leverage HRMS to streamline the gig worker recruitment process. Create a talent pool specifically for gig workers, enabling HR professionals to easily search for suitable candidates, manage applications, and facilitate onboarding.
  •   Flexible Compensation and Benefits: Implement HRMS that can handle flexible compensation models required for gig workers. These systems can automate payments, track hours worked, and manage benefits customised to gig workers’ specific needs.
  •   Performance Management: Utilise HRMS to establish performance management frameworks tailored to gig workers. This includes setting project-specific goals, tracking progress, work planning and providing real-time feedback through the HRMS platform.
  • Knowledge Management: Implement knowledge-sharing platforms within HRMS to ensure gig workers have access to relevant resources, project-specific information, and best practices. This promotes collaboration, enhances productivity, and improves overall performance.


Adapting HR Practices for the Gig Economy: Challenges and Opportunities

  • Workforce Planning: HR must develop workforce planning strategies that accommodate gig workers’ flexible schedules, availability, and project-based commitments. This involves forecasting project needs, identifying skill gaps, and aligning the right mix of gig workers and permanent employees.
  • Employee Engagement: Maintaining employee engagement and a sense of belonging can be challenging in a gig economy. HR can address this by implementing virtual team-building activities, recognition programs, and fostering a supportive work culture.
  • Legal and Compliance: Staying compliant with labour laws and regulations surrounding gig workers can be complex. HR professionals need to seek advice from legal experts to navigate the legal landscape and ensure the organisation meets its obligations.
  • Talent Retention: It is recommended to analyse the members every 6 months on the following factors:
    1. Performance
    2. Potential
    3. Probability of attrition
    4. Impact if attrition takes place
    5. Development needs 
    6. Job Fitment
    7. Strengths

While the gig economy offers numerous benefits, it also presents challenges that HR professionals need to address. Let’s explore some of these challenges and opportunities:

Talent Reviews, developmental strategies and relationship building should be the focus areas. Further, Offering competitive compensation, and recognising their contributions can help foster loyalty and retention.


The gig economy presents HR professionals with new challenges and opportunities but HR professionals can harness the power of HR management software such as to navigate the challenges while leveraging the opportunities simultaneously. It is crucial for all HR reps to embrace this shift in the world of work because the gig economy is here to stay!


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