How HR Can Embrace The New Economy (And Why It Should)

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A question from President Obama's State of the Union caught the attention of many employers: "...how do we give everyone a fair shot at opportunity and security in this new economy?"

The president laid out examples of ways to make the new economy work for everyone, many of which affect employers: job training, equal pay for equal work, and the ability to save for retirement whether a full-time employee or a consultant or freelancer going from job to job.

In fact, going from job to job, or gig to gig, is one example of how, as the president put it, "the economy has changed in profound ways." Many workers have chosen to participate in the "gig economy" to generate all or part of their livelihood.

As an employer, the trick is to find ways to take advantage of this development.

How The On-Demand Economy Can Help Businesses

One factor driving this shift for workers is the rise of on-demand economy companies that make freelance or consulting gigs easier to find. Businesses also can take advantage of on-demand platforms, like Fiverr, Freelancer.com, and UpWork, to find skilled contract workers.

In fact, these platforms can help employers address short-term needs created by paid leave, another initiative Obama cited as an area where he "will keep pushing for progress."

As Jason Hammersla, senior director of communications at the American Benefits Council in Washington, points out on Human Resource Executive, "not only will companies need to find a way to pay for such leave, but they may also need to build redundancies into their staffing."

In other words, workers take leave, but projects don't.

According to a 2015 survey by Intuit, the number of people working in the on-demand economy will reach 7.2 million by 2020. With a large, diverse talent pool available, engaging the on-demand economy for smaller projects can be a good way to see what platforms work best for your business.

Leveraging the on-demand economy to create a blended workforce can help keep projects moving, fill a specialized skills gap for a period of time, or even address seasonal hiring needs.

Giving Everyone A Fair Chance

The "new economy," though, isn't only about the on-demand workforce. It's also about the untapped potential found in others, and about providing opportunities to those who have the skills you need, not just those with a particular work history.

Obama highlighted fair chance hiring during the State of the Union address by sharing the anecdote of "the American who served his time, and dreams of starting over"Š "”"Š and the business owner who gives him that second chance."

One way to tap into the potential of all is through ban-the-box policies, which remove questions about convictions from job applications. That's not to say you can't run background checks. Rather, consider the person as a whole first, and what they bring to the table in terms of qualifications and personality.

Check Federal, State and Local Employment Laws

Some of these new-economy initiatives are also emerging areas of law, so there isn't a lot of clarity. But anytime you adjust your practices to take into account new opportunities, make sure you consult legal counsel for help adjusting your written policies appropriately.

Of course, it's also important to stay up to date on all applicable federal, state, and local employment laws. Ban-the-box initiatives, though they have the president's support, aren't yet federal law. Still, 19 states and more than 100 cities have adopted ban-the-box legislation.

Whether engaging with the on-demand economy or expanding your talent pool to anyone who has the skills you need, giving everyone a fair shot in this "new economy" can be good business.

Have you had success in hiring freelancers? Let us know @goodhiretweets #BuildGreatTeams

Gwynne Monahan

Gwynne Monahan

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Gwynne Monahan is a writer, editor, and consumer of knowledge who focuses on the intersection of law, technology, and HR. When she’s not writing, you can usually find her enjoying some jazz or a game of soccer.

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