HR Implications of Gig Economy: Analyzing 99designs' HR Challenges

This report examines the HR implications of the gig economy, with a focus on the Australian company 99designs. It explores the concepts and theories related to the gig economy and its impact on HR practices. The report identifies the benefits, such as reduced overhead costs and access to a wider talent pool, and challenges, including managing a remote workforce and ensuring consistent training, faced by HR departments in this environment. It analyzes 99designs' operations within the gig economy, examining how the company utilizes freelance designers. The report further develops possible responses and recommendations for effectively operating in a flexible work environment, including suggestions for leveraging the gig economy to optimize organizational structure and achieve positive outcomes. The report concludes with recommendations on how organizations can best utilize the gig economy for their advantage.

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1HR IMPLICATION OF GIG ECONOMY
Executive Summary
The purpose of this report is to analyze and report on the HR implications of emerging
working arrangements related to the gig economy. The leading organization in Australia that
has been taken as a frame for the report is 99designs. The 99designs is one of the world
largest online graphic design market place, which was established in 2008 by Matt
Mickiewicz and Mark Harbottle in Melbourne, Australia. The report will identify and
investigate the HR benefits and challenges for 99designs and develop possible responses for
operating effectively in this gig economic environment, which is highly flexible working
mode. The report will conclude with provide recommendations of how the organization
might make best use of the gig economy working arrangements or what should be the best
method to incorporate gig economy in the organization called 99designs. The report will
conclude with providing recommendations to the situation.

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Table of Contents
Introduction................................................................................................................................3
Gig Economy: Concepts, Theories and HR Implication............................................................4
Operation of the Gig Economy in Case of 99designs................................................................4
Benefits faced by the HR for the Implication of Gig Economy.................................................5
Challenges faced by the HR for the Implication of Gig Economy............................................7
Developing Possible Responses for Operating Effectively the Gig Economy as the hyper-
flexible Mode.............................................................................................................................9
Recommendations and Conclusion............................................................................................9
References................................................................................................................................11

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Introduction
The upcoming change in the employment process where the companies employ
freelancers and contractors to do their jobs is known as the Gig economy. It has large a
impact on the traditional economic system of workforce as it focuses on better facilities at
cheaper rates compared to the organizations based on the traditional economy (Huws,
Spencer and Joyce, 2016). The Gig economy flourishes as in the modern society majority of
the workforce wants flexible jobs.
As the traditional workforce is changing with the emergence of gig economy, the
Human Resource Department of any organization, which offers gig economy-based
workforce, has transforming role in the new culture (Kenney and Zysman, 2016). The HR
department of any organization, which proposes freelance or contractual work, faces
challenges and consumes benefits according to gig economy.
The purpose of this report is to analyze the HR implications of emerging working
arrangements based on the gig economy. The leading organization in Australia taken as a
subject for the report is 99designs. The report will identify and investigate the HR benefits
and challenges for 99designs. It will further develop possible recommendations for effective
operations of 99designs as a gig economy with a flexible work environment. The report will
provide recommendations of how the organization might make best use of the gig economy
in its organizational structure for a positive output.
Gig Economy: Concepts, Theories and HR Implication
The gig economy is an organizational structure which gives its employees the
freedom to have flexible work schedule, ideal for freelancers and contractual employees.
From the individual worker’s perspective, the gig economy gives them freedom to work from

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any location according to their chosen time (Kenney and Zysman 2016). However, the
income from this type of economy is not consistent so the employees have to work
continuously or shuttle between multiple jobs.
For securing work in the gig economy, workers contribute labor, time as well as
capital. In gig economy, the business organizations are light in assets. In gig economy,
business organizations connects providers and consumers and these business enterprises
make money by providing access to services and goods, but the risks are imposed to
individual gig workers instead of business organizations. The gig economy is the process of
hiring labor when there is a demand. The websites like Uber, Amazon Mechanical Trunk, and
Task Rabbit) helps in breaking down of work into components so that these tasks can be
allotted to gig workers as per requirement. The advancement of digital and social
technologies has changed the business process of an organization. The nature of work has
evolved with the advent of Gig Economy and work has become modular and granular. This
shift in technology has made some topics of human resource highly relevant (Acquier,
Daudigeos and Pinkse, 2017). These topics are the application of information technology for
proper hiring decisions, the influence of technology on the structure of work and new
arrangements for work, which become important with the advent of the Gig Economy. The
management of highly fluctuating flow of work and project management is facilitated by self-
employment and hiring of flexible labor. These are important aspects of the Gig Economy.
Operation of the Gig Economy in Case of 99designs
In the gig economic structure, freelancers or independent workers provide their
services in a particular platform. The job could be wed-based as internet is one of the major
platforms where the gig economy based businesses operate. In the modern digital world, the
gig economy based working structure is increasingly becoming common as people prefer

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work from home comfortably. 99designs is an Australian company, whose global operations
follow the gig economy employing freelance designers. This company has registered
designers from around the world coming together through this platform (99designs.com,
2017).
Freelancers could make money on the web platform of 99designs in two ways. One
way of making money from this site is participating in the competition organized by the
clients. From this competition, the clients could select their favorite designs and respective
designers. The payment is based on the package that has been chosen by the clients at the
beginning of the package (Ahluwalia 2017). The workers have three levels with accordingly
fixed payment options. For example, in gold package expert designers would provide the
designs and bronze package would allocate creative designers for people with lower budgets.
Another way of making money in this platform is by means of private project. Either
the freelancers find clients or clients would find the freelancers based on the portfolio. The
freelancers in this way could work separately apart from the contests. In this way, the
freelancers have a secure payment platform (99designs.com 2017).
Benefits faced by the HR for the Implication of Gig Economy
As discussed in this report about the changing scenario of the workforce that shifted
in gig economic structure, the changing function of the HR role and policy should be taken
into account. As the gig economic structure is widely acceptable in today’s world and the
study shows that by 2020 40% of the total population would accept it making recruitment a
minor problem faced by the organization (Boatright, 2017). This is also applicable in case of
99design platform. The HR does not facing any problems regarding recruitment as many
freelancers automatically register on the portal as the considering the nature of the work.

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Thus, the HR department of 99design is benefitted in the recruitment procedure
(99designs.com, 2017).
The implication of Gig Economy provides many benefits for the Hr department. The
Gig economy has resulted in lower overheads, the employment of full-time workers is costly
and by recruiting a flexible workforce, the HR department of 99designs can cut unnecessary
cost. The gig economy has provided a small and condensed pool of talent and this talent-pool
can be easily defined and filtered by the HR department of 99design to search for the right
candidate who will be a perfect fit to meet the strategic goals of the organization
(99designs.com, 2017). The gig workers of an organization bear the cost of their own
learning and development programs, thus the learning and development overheads are
lowered by the implication of the Gig economy, which proves to be highly beneficial for the
HR team of an organization. Gig economy is beneficial for the HR teams because when a
project is required to be completed within a tight deadline or ad-hoc revisions are necessary
in the project, the hiring of flexible workers can be highly beneficial for a HR team (Kenney
and Zysman 2016).
In the staff selection process HR would be benefitted in the gig economic structure as
discussed by Frenken and Schor (2017). According to them, gig economy provides
much smaller and thick pool of talents that could be effortlessly identified, screened and
explored by the HR team of any organization offering freelancing. This is kind of identifying
the right people in the right place (Kenney and Zysman, 2016). The gig economy is
beneficial for the HR team because this economy can bring expert workforce in areas of
business organizations which are strategically important. The downsized departments of an
organization can flex resource levels with the advent of Gig economy thus increasing the
effective functioning of these departments. The flexible employment opportunity provided
by the Gig economy also enhances the diversity goals of the HR teams of a business

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organization. The Gig economy helps the HR teams to retain key experience and skills by
offering employment as per requirement (Pompa, 2017). The flexible hiring process of the
Gig economy promotes creativity and agility because individuals with different work
experience become a part of the workforce of a business organization.
Challenges faced by the HR for the Implication of Gig Economy
The challenges faced by the HR for the implication of gig economy on the platforms
like 99designs include managing remote workforce, training and meeting the consumer
requirements from a shifting workforce. As the gig economic structure explores the
opportunity to work for the freelancers from anywhere in the world, the HR team of this
company faces challenges to reach employees from remote locations or work with the virtual
short-term employees. Sometimes it is very difficult to connect directly to the freelancers as
the communication is online and there may be barriers like time-zone difference or
technological barriers. Any problem in the internet connection would disassociate the
employer and the employee in the case of gig economy (Richardson, 2015).
As the 99design is portfolio based web platform, the HR department should focus on
the talent portfolio management than the talent management, which is the older traditional
way. In this type of talent portfolio management, the HR is facing some challenges. The
99design has some internal employees who work for the 99design. However, the HR has to
assimilate the internal employees and external freelancers based on their talent portfolio. The
HR should treat the external freelancers and internal employees equally for successful
implication of the HR management, otherwise, the freelancers could move to the other
platforms (Guest, 2017).
Other challenges include integration of the contract’s terms and conditions into a
seamless, cohesive whole. The HR should notice about the rewards and benefits given to the

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freelancers or contract based part-time employees (Elstad, 2015). The HR team of the
99design should carefully avoid challenges that the team is facing regarding the contract’s
terms and conditions of the freelancers.
As the gig economic structure is mainly web-based and includes freelancers across the
globe, the HR sometimes faces challenges regarding technological application and
implication (Pompa, 2017). The HR of the 99design faces a major barrier of training and the
inculcation of the organizational goals among the employees. The online recruitment process
does not give the chance to the HR to filter out the incapable employees in the organization.
The HR of this kind of platform like 99design is facing the problems related to smoothness
and ease in managing technology (99designs.com, 2017).
The social, ethical and sustainability challenges are faced by HR teams with the
advent of the Gig economy. For instance, the gig economy results in disguised employment
and thus the formal economy is hampered as a large number of work-force is excluded from
social and labor protection(Friedman 2014). Workers in the gig economy are a part of
intermittent workforce and they are not eligible for employment benefits like maternity leaves
or paid holidays. The gig economy has resulted in contractual agreements, which involve
multiple parties. Thus there is lack of transparency in the platform and workers do not
understand which party they should rely on and with which party they should discuss critical
issues(Richardson, 2015).
As there are many freelancers in the platform of 99design, the HR is facing challenges
in managing the quality control. This is related to the remote workforce management. As the
HR has to manage workforce virtually with employees in remote areas, the HR sometimes
faces challenges like work going to the inexperienced freelancers rather than most trusted and
best designers.

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The major challenges faced by the HR managers or line managers are they operate
under the pressure of managing an inconsistent workforce. In this case, they are not aware of
the minimum wage legislation, safety and health issues or working time. However, if the HR
managers are unaware of these types of important information, the work in this cloud-based
platform will be very difficult.
However, the challenges would be many as this type of working platform is new. The
HR policies should be modified to overcome the emerging problems as many workers now
days are much interested in gig economy.
Developing Possible Responses for Operating Effectively the Gig Economy as the hyper-
flexible Mode
As the structure of the recruitment is constantly evolving and changing into hyper
flexible mode that encompasses gig economy, accurate HR implication is also necessary.
There is need to develop possible responses for effectively operating the gig economy as the
flexible job structure to the freelancers. The HR needs to anticipate the changes resulting
from the gig economic structure. It would be possible by conducting an HR agility audit
process (Kuhn, 2016). The HR needs to focus on the work analysis of an employee whether
full time or part time instead of job analysis. The management should think creatively about
the possible environment in which the HR team could think about redesigning the HR
policies, processes and structures that would be supportive of the gig economy (Pompa,
2017). The management has to take initiative to transform the older policies, processes and
structures that only allow the internal full-time employees as organizational talents (Meister
and Mulcahy, 2016). The HR needs to consider the external talents as valuable as the internal
talents. According to this term, the HR needs to incorporate the necessary changes.
Risks and opportunities for labor protection

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The contractual agreements in the gig economy involves multiple parties like
temporary agency workers and workers engaged by outsourcing practices and subcontracting.
The workers are unable to identify their employer for the purpose of collective bargaining or
while complying with health and safety obligations, the workers can’t identify their
employer. The growth of the gig economy is exponential but the impact of the economy on
rights of labor is often ignored. The gig economy results in commoditization of work as
crowd-work, work-on-demand via apps are used in gig economy to match the demand and
supply of work. For instance, the possibility of freedom of association is reduced in case of
crowd-workers because these workers are dispersed on the internet (Richardson, 2015).There
is high competition in crowd-work platforms and workers often display opportunistic
behavior. Thus a healthy work environment recognized by the International Labor
Organization can’t be promoted with the advent of Gig economy. The Gig economy has
resulted in non-standard form of work because the workers can be terminated very easily by
deactivating them or excluding them from a platform or app (Acquier, Daudigeos and Pinkse,
2017).
Recommendations and Conclusion
It can be concluded by stating that gig economy and possible implication on the HR
issues have been discussed on broader sense with some references to the related literature.
The gig economy is consuming the job market and it would be one of the best and accepted
job opportunities by the end of 2020 (Kenney and Zysman, 2016). The gig economic
structure and the related HR issues is discussed in relation to the Australia based web
platform called 99design. The 99design is accepted the gig economic structure and offers
freelancing jobs to the designers. In the context of the 99design, the benefits and challenges
faced by the HR department of the 99desiogn have been discussed and possible responses to

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operate the gig economic structure in terms of HR policies and structures have been
discussed. By discussing broadly the HR issues of the gig economy, it is recommended that
the companies, which are offering the gig economic platform need to develop the possible
HR strategies for accepting these changes. The 99design could incorporate the new HR
policy of managing the clients from the remote areas as many complains is coming in this
field. As the work force and work role is constantly evolving online training methods should
be introduced. The HR roles and management should incorporate these changes; otherwise, it
would be difficult for the companies to accept the new mode generational mode of working
nature.

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References
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