MSG Team's other articles

8851 Should India reform its Labor Laws? The Debate over Rigid and Flexible Labor Laws

The Case for India to Reform Its Labor Laws India is on the move and its economy is booming with it being the largest major economy clocking faster growth rates. The avowed intention of the Indian Policy making elite is to ensure that India gains parity or for that matter, at least somewhere near to […]

10367 Mistakes Managers Make in Knowing Employees

Let us highlight some common mistakes managers make in knowing and managing employees: Do not expect your team members to know everything. How can an individual perform each and every task with perfection? Key responsibility areas should not be designed just for the sake of it. Responsibilities should be delegated as per capabilities, specialization and […]

9132 How can Employee Engagement help increase Customer Satisfaction

Numerous management studies and researches support the proposal that there exists a relationship between employee engagement and customer satisfaction. It has been observed that the actively engaged employees are extremely loyal towards their organisation and are always ready to walk that extra mile to ensure success for their company. The studies such as ‘Loyalty Effects’ […]

12635 Career Ladders and Career Paths

Typically a career involves a growth path which takes an individual to a higher position in the organizational hierarchy over a certain period of time. It is called the career ladder or the career path. Most of the organisations map out various steps in the lifetime of an organisation in advance. This is done to […]

13014 Current Trends in Talent Management

If you ask me for the guidelines for talent management, my response would be the following: Developing employees. Redeploying employees. Retaining the best talent. Yes, the prime focus of talent management is enabling and developing people, since the quality of an organization is determined by the people it employs and has onboard. After hiring and […]

Search with tags

  • No tags available.

Introduction: HRM in the Industrial and the Post-Industrial Eras

The field of HRM or Human Resource Management has evolved from the time HR managers were primarily responsible to settling labour disputes and taking care of payroll during the Industrial Era to the time where they were primarily tasked with enabling performance, empowering employees, and providing overall “soft skills support” to employees in the Post-Industrial Era where services firms predominated the global economy.

Indeed, HRM which started out as an ancillary and auxiliary function in the manufacturing era evolved to a core function and a source of competitive advantage in the services era. This evolution has necessitated several changes in the way the field of HRM operated and continues to operate to this day.

HRM in the Emerging Digital Economy

Having said that, HRM is again at a crossroads and an inflection point with the emergence of the digital economy where sharing economy paradigms and the so-called “gig economy” wherein workers and employees are part time and the model of work is fluid and flexible means that there is yet another evolutionary leap to be taken for the field of HRM.

Indeed, with the emergence of firms such as Uber, AirBnB, Task Rabbit, Amazon, and Upwork that provide freelance jobs and contractual employment and where the pay is based on per task basis rather than a monthly consolidated amount, HR managers have to keep pace with the changes in the broader economy and evolve accordingly.

This calls for some adjustment and even a radical overhaul in the way the field of HRM operates. For instance, HR managers in any of the Digital Economy firms typically are involved in the initial screening and pre-employment interviews and formulation and finalization of the contractual obligations and terms and conditions for the workers. Further, HR managers in the sharing economy are more concerned with the Digital Interface model of engagement rather than face to face model of engagement.

Some Examples of HRM in Digital Economy Firms

Take the example of a sharing economy firm such as Uber. Once the contractual Drivers are on-boarded, the HR managers interact with them through the App based and Virtual Interfaces rather than meeting them in person.

Though some firms in the Digital Economy do make it a point to invite their employees for in-person interactions from time to time, most firms such as UpWork and Task Rabbit rely on “armies of globally dispersed” employees where the possibility of even interaction through Skype or Video is remote let alone face to face and in person interaction.

This means that HR managers in these firms should be conversant with the way the Digital Economy works and understand what it takes for businesses in this paradigm to succeed. Therefore, HRM as a field has to evolve from being physical bound to a new model where Digital and Virtual modes of people management are the norms.

Thus, as mentioned earlier, HRM now faces the prospect of a “paradigm shift” in the way it has to be practiced and in the way HR mangers operate.

Returning to the example of Uber and AirBnB, HR managers in these firms have to typically manage the contractual workforce and address their grievances related to low pay, lack of orders, shift timings and managing workload, and deal with regulatory concerns.

Indeed, if events over the past year are any indication, most sharing economy firms are spending much of their time dealing with these concerns and in particular, the “grey areas” between their business models and the prevailing regulatory frameworks rather than on people management or what were earlier the main concerns of firms in the Industrial and even the Post-Industrial Era.

Fundamental Shift in the Nature of Work and Employment

The point to be noted here is that the Digital Economy and the Sharing Economy represent a significant break with the past wherein the very nature of work has changed and indeed, the concept of what work is and how it is performed has also changed.

Moreover, taken together with globalization, the emergence of the Digital Economy means that the firms are located in one jurisdiction, the freelancers (one should be careful when using the term employees since the sharing economy firms work on the concept of digital labour and not physical labour) are dispersed globally, and the firms themselves operate 24/7 across time zones.

Thus, HR managers now have to learn to deal with challenges such as complying with regulatory requirements across the world and where laws and rules differ from location to location. Meanwhile, the primary concern of HR managers has to be that they have to manage a dispersed workforce wherein the interface and the intersection between globalization and localization mean that Glocal or the merging of Global and Local modes of engagement are the norms rather than the exception.

For instance, HR managers in any of the Digital Economy firms have to contend with freelancers in one location being affected by purely local events and at the same time, the common rules of global engagement have to be tweaked to suit the local conditions.

Conclusion: A New Social Contract

Finally, workers in the Digital Economy who are hired on a freelance basis neither have benefits such as healthcare or pension and social security and hence, HR managers have to deal with this aspect as well wherein the fundamental nature of engagement between the employer and employee has been radically altered to the point where one can no longer rely on past definitions to guide the present terms of engagement. Indeed, it can be said that there is a new “social contract” between the employers and the employees and this is something that the field of HRM and the HR managers in the Digital Economy firms have to contend with.

Article Written by

MSG Team

An insightful writer passionate about sharing expertise, trends, and tips, dedicated to inspiring and informing readers through engaging and thoughtful content.

Leave a reply

Your email address will not be published. Required fields are marked *

Related Articles

The Challenges of Managing Attrition in Contemporary Organizations

MSG Team