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In an On-Demand Economy, Will HR Become an App?

It may not be obvious yet, but on-demand services like Uber are not just reshaping the way people hail taxis in large cities; they’re on track to revamp the American workforce in the most profound manner since perhaps the Industrial Revolution.

If consumers can order services from housekeeping to flower delivery to legal services and even medical care, why can’t corporations do the same thing with the services they require? We’re seeing more indications that maybe they can.

Virtually everyone in the 21st century workforce has come to grips with the notion that the post-World War II, 20th century economy dominated by heavily matrixed corporations that offered full-time jobs and job security (often protected by unions), defined-benefit pension plans and a gold watch at retirement have been going the way of the dinosaur for some 35 years.

In 2015, it seems that hand-held devices and smart phones are helping transform the way business is conducted and how many thousands of workers earn their livelihoods.

A  Nation of Freelancers?

The Great Recession eliminated millions of jobs in the U.S.; some temporarily until the economy improved, but many other vacancies were never filled.

Companies discovered they could survive with fewer full-time employees, and many older workers who found themselves in the job market for months that turned into years were forced to take early retirement or market their services in a different way. Freelance and contract work have become the rule, rather than the exception, for many businesses and workers across the board.

The rising cost of providing staffers with benefits and the inception of the Affordable Care Act is making healthcare accessible to millions of Americans who were previously uninsured and don’t need to rely on their employers for health insurance (though the vast majority of American taxpayers still receive health insurance from their employers, for the time being).

The notion of “outsourcing” has taken on new meaning: jobs aren’t just being sent overseas, they’re merely being sent out-of-house and across town by many companies.  

The “Uberization” of America

The media is currently saturated with articles and discussions about Uber (and its competitors Lyft and Sidecar), which provides taxi service via a hand-held app to consumers in some 53 countries. Some cities (notably Paris) and even entire nations (the Netherlands) have outlawed the on-demand car service, which they feel threatens traditional taxi providers while providing the same services cheaper, faster and more efficiently.

The company is barely six years old, but is becoming the start-up model of the Millennium, and – rightly or wrongly – credited with created the so-called “on-demand economy” where services, possessions, and even experiences are purchased at the moment they are needed or wanted.

A recent eye-opening article in the Economist took an in-depth look at how “Uberization” is spreading to all types of industries that match jobs to independent contractors virtually instantaneously. Companies providing more sophisticated and high-level services than just a car ride – or even a make-shift hotel room, thanks to airbnb – such as computer programming and management consulting, have been around since the very early 2000s.  However, the trend seems to be mushrooming, and changing the nature of not only how services are provided; but also the way in which independent contractors market their services ubiquitously and companies may rethink their hiring practices.

Making Work Lives Better?

Not everyone is enthused about the rise of the on-demand economy. Noted economist and former Secretary of Labor Robert Reich was recently quoted in The New York Times as saying, “This on-demand economy means a work life that is unpredictable, doesn’t pay very well and is terribly insecure.” Perhaps, but President Obama’s call for stronger labor unions in his recent State of the Union address seems somehow quaint and unrealistic in 2015.

Indeed, political and economic analyst Anne-Marie Slaughter, speaking at the recent World Economic Forum in Davos, Switzerland, made reference to The Economist piece and took the on-demand economy concept a step further. She sees the development of what she terms the “platform” economy as the gateway to workers mapping out their workdays, their livelihoods and how they divide their time between working, leisure time and, most significantly, child- or elder care as the population ages.

In Slaughter’s words: “The ‘care economy’ allows people time to both make a living and do what they most care about.” She envisions the formation of stronger “guilds” to bolster the free-lance life.

The jury’s still out on who’s right and how quickly the on-demand economy will change the way we live and work. Who knows? One day, HR professionals may find themselves on the other end of an iPhone app.

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