The Rise of Gig Economy: How HR is Adapting to A New Workforce Model

Abstract

This paper explores the redefined HR functions in gig economy firms that differ significantly from traditional models. Recruitment, performance management, and compensation structures are largely technology-driven, often utilizing automated systems and rating mechanisms. Workforce planning, training, and development are customized for gig workers and requesters to ensure efficiency within digital labour platforms. While the gig economy offers autonomy and flexibility, concerns over job security, benefits, and labour rights persist. It also highlights ongoing debates regarding worker classification and protections. This paper focuses on the ecosystem perspective, gig workers, requesters, and intermediary platform firms which interact in a highly interdependent manner. This ecosystem is sustained through strategic HR activities, including workforce analytics, digital transformation, and AI-driven decision-making. Despite these advancements, regulatory challenges remain. This paper explains the expansion and outcome of gig economy on Human Resource Management. As the gig economy expands, HR professionals must adapt by leveraging technology, revising workforce policies, and implementing inclusive strategies. Businesses that embrace this transformation will be better positioned to attract talent, drive innovation, and remain competitive in the evolving labour market. Future HRM strategies must balance flexibility with worker’s protection to ensure sustainability and fairness in the gig economy.