The Gig Economy: Implications for HR and Talent Management

March 20, 2025

SEB Marketing Team

The pandemic fundamentally transformed how we think about work. As organizations adapted to new realities, the gig economy quietly surged, creating both opportunities and challenges that HR professionals and employers can no longer ignore. The traditional 9-to-5 model is no longer the default. Gig workers now represent a substantial percentage of the workforce, with more than 2.5 million Canadians choosing project-based work over conventional employment arrangements. Here are some of the effects on organizations, shaping the way businesses source and manage talent.

The New Talent Ecosystem

The gig economy refers to a labour market built around short-term, project-based, or freelance work, rather than traditional full-time employment. It includes independent contractors, freelancers, and temporary workers who take on assignments for multiple clients instead of working for a single employer. This shift is driven by workers’ desire for flexibility, variety, work-life balance, and income potential, as well as employers’ need for specialized skills on demand.

The gig economy extends far beyond ride-sharing and delivery services. It now encompasses highly skilled professionals in marketing, technology, finance, and consulting. Businesses are increasingly leveraging gig talent to access niche expertise without committing to long-term employment contracts. This shift isn’t temporary—many gig workers have no intention of returning to conventional employment, highlighting the permanence of this trend.

Why Organizations Are Embracing Gig Talent

Beyond offering workers more freedom, the gig economy provides significant benefits for employers. Companies can scale operations more efficiently, reducing overhead costs associated with salaries, benefits, and long-term commitments. Instead of maintaining large full-time teams, businesses can tap into a global talent pool, bringing in specialists for specific projects when needed. This flexibility allows organizations to remain agile in fluctuating market conditions.

Technology has also played a crucial role in this shift. Digital talent platforms and freelance marketplaces have made it easier for companies to find and engage skilled professionals. AI-driven matching tools help businesses connect with contractors who have the exact expertise required, streamlining the hiring process. At the same time, HR technology solutions are evolving to include features that support the gig workforce, from automated contract management to real-time collaboration tools.

Adapting HR Strategies for a Gig Workforce

To navigate this new workforce landscape, HR leaders must rethink their approach to talent management. Here are key strategies to consider:

• Assess Workforce Needs: Identify which roles require full-time employees and which can be performed effectively by contingent workers. Organizations that take a segmented approach to workforce planning report higher productivity and efficiency.
• Streamline Contractor Management: As the contingent workforce grows, so does administrative complexity. Standardizing processes for onboarding, evaluation, payment, and compliance management can help organizations work more effectively with independent professionals.
• Foster Cultural Connection: Gig workers can often feel disconnected from an organization’s mission and values. Creating intentional engagement strategies—such as integrating contractors into team communications and company events—can improve retention and long-term collaboration.
• Rethink Benefits and Incentives: While traditional benefits don’t typically apply to gig workers, organizations can still offer value through professional development opportunities, early payment terms, and access to resources that support their success.
• Build a Talent Community: Rather than treating each gig engagement as a separate transaction, forward-thinking companies cultivate ongoing relationships with high-value contractors. A well-maintained talent community enables faster hiring and improved project outcomes.

Compliance Considerations

Embracing the gig economy requires careful navigation of compliance issues. The Canada Revenue Agency (CRA) closely monitors contractor classifications, with increasing penalties for misclassification. HR teams should evaluate contractor relationships using key factors such as control over work, provision of tools, and financial risk allocation to ensure compliance with regulations.

Staying compliant requires building ethical, transparent relationships with contingent workers. As labour laws continue to evolve, organizations should stay informed about potential regulatory changes that could impact how they classify and compensate gig workers. Offering fair contracts, ensuring timely payment, and maintaining clear communication can help companies foster positive and legally sound engagements with their gig workforce.

The gig economy offers the opportunity to expand talent options. Organizations that strategically integrate contingent talent alongside permanent employees gain agility, access to specialized skills, and improved scalability. The question isn’t whether your organization will engage with the gig economy—it’s how effectively you’ll integrate this evolving workforce into your talent strategy.