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HR, Training and the ‘Gig’ Economy

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New survey data finds few organizations are investing in their employees’ training and development these days, and I’m beginning to think the “gig economy” may have something to do with it.

Saba, a global provider of talent management solutions, just released additional findings from its spring Global Leadership Survey, in which it found that a mere 13 percent of companies worldwide invest in talent-management programs to further employees’ growth and career path.

For those companies that are providing training, only 35 percent are offering career development opportunities online. And, according Saba, the majority of employees (57 percent) are simply getting their training from “on the job” experience.

“Understandably, companies are focused on bottom line growth and results,” said Emily He, Chief Marketing Officer at Saba. “Unfortunately, many organizations don’t consider the career development of their employees a part of that growth equation — but they should. ”

However, a piece in today’s New York Times titled “Rising Economic Insecurity Tied to Decades-Long Trend in Employment Practices,” shows how the rise of the “gig economy” (think Uber or Lyft, for examples) is changing all sorts of expectations — including compensation and training — on both the employers’ and workers’ sides.

According to the NYT piece, tens of millions of Americans are now involved in some form of freelancing, contracting, temping or outsourcing work:

The number for the category of jobs mostly performed by part-time freelancers or part-time independent contractors, according to Economic Modeling Specialists Intl., a labor market analytics firm, grew to 32 million from just over 20 million between 2001 and 2014, rising to almost 18 percent of all jobs. Surveys, including one by the advisory firm Staffing Industry Analysts of nearly 200 large companies, point to similar changes.

So perhaps it’s no wonder that companies are devoting less time to training programs when they only expect to use such workers for short-term projects:

Since the early 1990s, as technology has made it far easier for companies to outsource work, that trend has evolved beyond what anyone imagined: Companies began to see themselves as thin, Uber-like slivers standing between customers on one side and their work forces on the other.

The piece also includes David Weil’s — who runs the Wage and Hour Division of the United States Labor Department — description from his recent book, The Fissured Workplace, of how investors and management gurus began insisting that companies pare down and focus on what came to be known as their “core competencies,” such as developing new goods and services and marketing them.

Far-flung business units were sold off. Many other activities — beginning with human resources and then spreading to customer service and information technology — could be outsourced. The corporate headquarters would coordinate among the outsourced workers and monitor their performance.

“In the past, firms overstaffed and offered workers stable hours,” said Susan N. Houseman, a labor economist at the W. E. Upjohn Institute for Employment Research. “All of these new staffing models mean shifting risk onto workers, making work less secure.”

The NYT piece notes that, while only representing a limited corner of the nation’s approximately $17.5 trillion economy, other types of workers are watching with trepidation how organizations are moving toward the “gig economy” model.

Indeed:

…[E]ven many full-time employees share an underlying anxiety that is a result, according to the sociologist Arne L. Kalleberg, author of Good Jobs, Bad Jobs, of the severing of the “psychological contract between employers and employees in which stability and security were exchanged for loyalty and hard work.”

While outsourcing and “gigging” jobs may cut organizations’ short-term costs in some areas (such as training and development efforts) Saba’s He nonetheless emphasizes the need for companies to invest in training their workforce if they expect to succeed in the long run:

“Not only is talent management and training an integral part of workforce development, it’s proven to be a driving factor in the long-term growth and success of an organization.”

 

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