The gig – or contingent – economy represents an entirely new way for CIOs to attract and retain highly sought after IT talent, writes Gary Beach.

If you’ve ever used Uber, you’ve already experienced a business model that is poised to redefine the very nature of work across many job disciplines, including IT. The ride-sharing service not only provides a new approach to transportation but also restructures the employer/employee relationship – a transformation so disruptive that ignoring it puts all businesses at competitive risk. This trend is particularly relevant to chief information officers in the thriving global economy in which “talentism is the new capitalism”. 

The movement even comes with a popular moniker: “the gig economy”. The phrase might at first sound like a benign term that conjures up images of IT workers whimsically hopping from one project to another, deciding when and where to work, and more focused on enjoying work/life balance than receiving a regular paycheck. 

But on closer inspection, there is far more going on. In fact, the gig – or contingent – economy represents an entirely new way of attracting and retaining highly sought after IT talent. This is particularly true given its rapid emergence alongside what the World Economic Forum (WEF) calls “the Fourth Industrial Revolution”. In the WEF’s view, the Fourth Industrial Revolution is a global phenomenon that builds on and accelerates the ongoing digital revolution by blending the physical and virtual worlds, adding incredible advances in the artificial intelligence, automation and robotic automation and machine learning to the simmering business-technology mix. 

Forces Behind the Contingent Workforce

According to Dice.com, an IT career website, the search for highly skilled talent is a top hiring priority for CIOs in 2016, with of 71% of companies looking to add to their tech teams by 11% or more this year.

That level of demand is a prime motivational force leading to the gig economy. Ardent Partners claims 95% of U.S. corporations perceive contingent workers to be a key element of doing business, and that by 2017, these workers will account for 25% of their entire IT workforce. 

Edelman Berlind, a global market research firm, says the contingent workforce is now 53.7 million people strong. That’s about 40% of the entire U.S. workforce. The gig economy is such a key component of today’s labor market that the U.S. Department of Labor will begin to gather and report official data on its size in 2017 Current Population Survey. This is a critical development because it will now give federal and state lawmakers access to “official” information on the size of this emerging workforce, as well as data needed to craft policy to guide its’ development. 

In terms of which projects and skills will be in demand for contingent workers, a review of job data from Foote Partners offers some visibility and insight, naming enterprise architects, data architects, big data/data management and cyber security as key positions CIOs are looking to fill with contingent workers. Robert Half International adds wireless network engineers and mobile application developers to that list. 

Workforce Challenges Facing CIOs 

Fieldglass Software, a subsidiary of SAP, advises CIOs to tap the brakes before rushing fully into embracing the contingent workforce model.  Their research reveals several concerns CIOs must consider when emplying contingent workers, including:

  • lack of visibility and intelligence into the ultimate ramifications of this approach
  • difficulty of fully assessing and verifying a contingent worker’s skill set
  • need to craft realistic budget estimates
  • overwhelming volumes of federal and state labor guidelines 

A vexing challenge CIOs face in onboarding gig workers is intellectual property protection. Joe Lampien, director of Kelly Services Engineering Center of Excellence explains the dilemma this way: “On one hand, chief information officers have a fiduciary responsibility to protect confidential product and process information which you don’t want walking out the door with the contingent worker. On the other hand, contingent workers with the right skills and talent experience can greatly contribute to the creation of intellectual property.” 

CIOs balance these risk-reward IP issues by requiring all contingent workers to sign a “work made for hire” contract that ensures the company, not the gig worker, owns the IP of the work being performed and that the firm is notarized as the author and automatic owner of the work. Another common practice is to have contingent worker take a customized training course on IP property protection and confidentiality. 

It's Not About Cost Saving

CIOs are not leveraging the gig economy to spend less money. As one told me at a recent CIO confab, “many IT executives think cost savings is the primary driver of using contingent workers. But the project preparation, detailed scope, design and documentation costs associated with contingent workers largely offset any potential cost savings. It is much more about having access to the best talent than trying to save a few bucks.” 

One thing is sure: CIOs do not see the gig economy trend ending any time soon. Contingent workers now comprise about 20% of the average IT staff. Industry pundits forecast that the full-time vs. contingent composition of an average IT staff could reach the 50-50 mark by the end of the decade.

Gig workers seem to like this work arrangement. 90% of IT professionals who have completed at least one gig claim they will never go back to working for one employer. 

For me, the gig economy is nothing less that the “uberization” of IT work. CIOs would be wise to take it for a test drive in the second half of 2016. Happy ride-sharing!

Gig-Economy

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