Impacts Of Casualisation, Outsourcing, And Gig Economy On Human Resource Management In Australia

The nature of jobs and the workforce is changing due to trends such as casualisation, outsourcing, and the emergence of the ‘gig’ economy. Critically discuss the HR impacts of these trends in relation to the key stakeholders such as employers and employees. What challenges do the trends raise for the Australian regulatory framework?

Changing trends in Human Resource Management

Human Resource Management can be rightfully described as the management of the different employees in an organization and ensuring that these employees enjoy their work rights and are able to successfully perform in the organization. However, the domain of HRM has not remained static throughout and has undergone a large number of changes. These changes in the different trends of HRM like the casualization, outsourcing and the emergence of the gig economy have impacted various components of the organization as well like the employers and the employees (Healy, Nicholson & Pekarek, 2017).  The primary aim of the given essay is to highlight the changing trends of Human resource management in Australia and to assess the nature of the trends like casualization, outsourcing and gig economy respectively. Additionally, the impacts of these trends in relation to the stakeholders will be assessed. Lastly any challenges these trends raise for the Australian regulatory framework shall also be discussed.

The economy of Australia has transited substantially and there have been various growth opportunities for the alternate sectors. However, ensuring that the employment trends change in relevance to the needs of the organization is a challenge and now the organizations would require relevant talent so as to match with the evolving needs. This section of the essay will discuss the necessary trends which exist in the economy (Swart & Kinnie, 2018). These trends are primarily dominated by aspects like Innovation, Cost Scrutiny and Optimization of the related HR Model, Digitalization and Flexible working.

Most of the organizations in Australia have adopted the HR information systems which allow off shoring of various processes to locations which involve lower costs. Technology has currently allowed the companies to redesign their experience. In relation to technology, innovation has also become crucial and hence for this purpose the HR Department is being extensively involved in innovation through leadership, cultural perspective and capabilities of the employee. Moreover, at present Flexible work arrangements are being allowed to the employees so as to increase equality in the organization and encourage more females. According to McGann, White and Moss (2016), various organizations like Telstra, Westpac and the Lend Lease have provided changed working arrangements. Moreover, there have been various offshoring and optimization of the HR model in order to ensure that the design of the teams can be changed considerably.

In the recent time, there are number of recent trends being emerged that are having influences on the existing trend of human resources. One of the major trends is the job casualization that refers to the approach of selecting employees on contract basis rather than on the permanent basis. This helps the business organizations in having lower responsibilities in managing the employees. In addition, in the case of contractual employees, organizations should not take the responsibility of providing the employee benefits applicable in the case of permanent employees (McGann, White & Moss, 2016). Job casualization also helps the business organizations in terminating the employees according to their choice. This is due to the reason that contract can get terminated if organization is not interested with the particular employee. On the other hand, in the case of the permanent employees, organizations will have to adhere to the legal standards and rules in terminating the employees (Markey & Mclvor, 2018). Thus, the existing trend of human resources of managing the permanent employees is getting changed by job casualization.

Impacts of casualisation, outsourcing, and gig economy

Another major trend in the recent time is job outsourcing. This is further getting amplified with the initiation of the globalization across the world. This refers to the process of transferring the jobs to the third party vendors in low cost. For instance, organizations in the developed countries are outsourcing their partial jobs to the third party vendors in the developing countries (Trusson & Woods, 2017). This is helping them to get the same job done in lower cost due to the lower cost of human and other resources in the developing countries. However, on the other hand, this concept is causing unemployment to the job holders whose jobs are being outsourced and they are forced to work in lower pay structure. This is also affecting the existing trend of human resource management due to the fact that permanent employees cannot get judged and reviewed by their job performances.

Gig economy or freelancing is another trending concept in the recent business scenario that refers to the process of employing people on the basis of freelancing. Thus, there will be no contractual benefits between the employees and the employers. Employees will work only based on their interest to earn money and in adhering to the certain standards of the company (Stewart & Stanford, 2017). One of the prime examples of gig economy is Uber. They majorly operate on the basis of freelance drivers for their cabs. This is helping the company in having no responsibilities and liability of managing their employees along with having no added costs for providing benefits to them. However, on the other hand, this is affecting the existing trend of managing human resources due to the reason that employees in the gig economy are not also liable to adhere to the control of the organization (Healy, Nicholson & Pekarek, 2017).

One of the major impacts of these recent trends is change in the definition of the employees. This is due to the reason that the almost all the rules and regulations in the human resource management are based on the permanent employees and the employees who will stay with the company. However, with the emergence of these trends, loyalty level of the employees is getting affected and they are less getting motivated to the human resource approach. As stated by Swart and Kinnie (2018), for instance, in the case of job casualization, employees are always in fear of losing their jobs and thus no other motivating factors will have on the employees. In addition, the existing process of the human resource management will also not be able to encourage the employees in generating innovative ideas and out of the box thinking (Habraken & Bondarouk, 2017). This is due to the reason that in the case of job casualization, employees will be the more centered towards securing their jobs by going by the traditional approaches. The existing process and elements of the human resource management are ineffective in this case.

Key stakeholders and their relationship with the trends

On the other hand, according to Habraken and Bondarouk (2017), employers are also being affected by these trends due to the fact that they are not having the access to higher loyalty level of the employees and employers are having lower control over them. In the case of job casualization, outsourcing or gig economy, employees are not being controlled directly because they are not working on permanent basis. Thus, it is difficult for the employers to lead their subordinates in accordance to the change in the organizational situations and business factors (Swart & Kinnie, 2018). Furthermore, employers will also not be able to motivate their employees and fetch the best outcome from them. This is due to the reason that employees are working on temporary basis and outsourcing is taking away their jobs, which is further de-motivating them. Thus, the probability of having the maximum productivity from the side of the employees is less.

As the different trends with respect to Casualization, Outsourcing and the emergence of the gig economy have been changed considerably and have had a huge impact on the stakeholders, there has emerged various challenges with respect to this in the Human Resource Legislative framework as well in Australia. As per Stone and Stone (2013), this is because, the different legislative frameworks have been designed in a manner such that, they support the Australian employees in their daily life with respect to aspects like Fair Pay, end of employment tenure and other related aspects. However, as the gig economy has emerged, there have been various short term contracts and free lancing jobs which have now challenged the previously existing legislatives like Fair work act 2009, Work cover corporation Act 1994 and other related Frameworks (Campbell, Boese & Tham, 2016).   Moreover, outsourcing of jobs have become more relevant and therefore, the lack of the present laws in relation to this have to be changed. Hence, the HR legislature of Australia is not yet advanced and dynamic to absorb the changing trends of gig economy and outsourcing.

Conclusion:

Therefore, from the given analysis it can be stated that the field of Human resource management has advanced extensively and in Australia the changing trends have been with respect to various aspects like digitalization, cost scrutiny, outsourcing and others. The essay highlights the changing trends in the field of HRM in Australia, which is then followed by a detailed discussion with respect to the different trends which have brought about change like the Gig economy emergence, casualization and outsourcing. Moreover, the impact of these trends on the economy has also been analyzed. Lastly the latter half of the essay highlights the manner in which these aspects pose a challenge to the current Human resource legislatives in Australia.

Reference:

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Healy, J., Nicholson, D., & Pekarek, A. (2017). Should we take the gig economy seriously?. Labour & Industry: a journal of the social and economic relations of work, 27(3), 232-248.

Markey, R., & McIvor, J. (2018). Regulating casual employment in Australia. Journal of Industrial Relations, 0022185618778084.

McGann, M., White, K., & Moss, J. (2016). Labour casualization and the psychosocial health of workers in Australia. Work, employment and society, 30(5), 766-782.

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Trusson, C., & Woods, F. (2017). ‘An end to the job as we know it’: how an IT professional has experienced the uncertainty of IT outsourcing. Work, employment and society, 31(3), 542-552.