Flevy Management Insights Q&A

How is the shift towards a more gig-based economy affecting long-term succession management strategies?

     Joseph Robinson    |    Succession Management


This article provides a detailed response to: How is the shift towards a more gig-based economy affecting long-term succession management strategies? For a comprehensive understanding of Succession Management, we also include relevant case studies for further reading and links to Succession Management best practice resources.

TLDR The gig economy is reshaping workforce and succession planning strategies, necessitating a more flexible, skills-focused approach and the integration of gig workers into Talent Management and Leadership Development initiatives.

Reading time: 5 minutes

Before we begin, let's review some important management concepts, as they relate to this question.

What does Gig Economy mean?
What does Succession Management mean?
What does Talent Mobility mean?
What does Organizational Culture mean?


The shift towards a more gig-based economy is profoundly reshaping the landscape of workforce management and succession planning. As organizations increasingly rely on gig workers for both core and non-core activities, traditional models of career progression, talent development, and leadership cultivation are being challenged. This evolution necessitates a reevaluation of long-term succession management strategies to ensure organizational resilience and competitiveness in the dynamic market environment.

Understanding the Gig Economy's Impact on Workforce Dynamics

The gig economy, characterized by the prevalence of short-term contracts or freelance work as opposed to permanent jobs, is expanding rapidly. While precise statistics on the gig economy's size and growth vary, it's undeniable that this sector is becoming a significant part of the global workforce. This shift is driven by technological advancements, changing worker preferences for flexibility, and organizations' desire for a more adaptable workforce model. The gig economy offers benefits such as cost savings on benefits and the ability to quickly scale labor up or down based on demand. However, it also presents challenges in maintaining a consistent organizational culture, ensuring quality, and developing a reliable pipeline of future leaders.

Organizations are now faced with the task of integrating gig workers into their Strategic Planning and Talent Management processes. This includes rethinking how to identify, develop, and retain talent within a more fluid and transient workforce. Traditional succession planning models, which rely on a stable and predictable pipeline of full-time employees progressing through the ranks, are less effective in this new context. The gig economy necessitates a more flexible and adaptive approach to succession planning, one that can accommodate the realities of a workforce that is increasingly made up of independent contractors and freelancers.

Moreover, the gig economy is not just a phenomenon at the lower or middle levels of the workforce; it's also affecting senior and C-level positions. Interim executives and specialized consultants are increasingly common, especially in roles requiring specific expertise or during periods of transition. This trend further complicates traditional succession planning efforts, as the lines between internal and external talent pools become blurred.

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Adapting Succession Management Strategies for the Gig Economy

To navigate these challenges, organizations must adapt their succession management strategies in several key ways. First, there is a need for greater emphasis on skills and competencies over traditional job roles. This shift requires a more dynamic approach to talent management, where skills inventories are regularly updated, and talent mobility is encouraged. For instance, leveraging technology platforms for talent management can help organizations more effectively match gig workers' skills with project needs, facilitating a more agile and responsive approach to workforce planning.

Second, organizations must invest in building a strong organizational culture and employer brand that appeals to both traditional employees and gig workers. This involves creating an inclusive environment where all workers feel connected to the organization's mission and values, regardless of their employment status. For example, offering professional development opportunities and recognizing contributions can help integrate gig workers into the organizational fabric, making it easier to identify potential leaders among them.

Finally, succession planning in the gig economy requires a more proactive approach to talent engagement and development. Organizations should consider establishing mentorship programs, project-based learning opportunities, and leadership development initiatives that are accessible to gig workers. This not only aids in the identification of potential future leaders but also helps in building a more resilient and adaptable workforce. Furthermore, leveraging analytics and data-driven insights can enable organizations to better predict talent gaps and identify high-potential individuals within their evolving workforce.

Real-World Examples and Best Practices

Some leading organizations are pioneering innovative approaches to succession management in the gig economy. For instance, a global technology firm has implemented a "talent cloud" that allows them to dynamically match gig workers with projects based on skills, experience, and availability. This platform also tracks the performance and development of gig workers, helping to identify potential candidates for future leadership roles.

Another example is a multinational corporation that has developed a comprehensive leadership program accessible to both full-time employees and gig workers. This program includes virtual workshops, mentorship opportunities, and team projects designed to develop critical leadership skills and foster a sense of belonging among all participants. By doing so, the organization has been able to cultivate a diverse pool of talent ready to step into leadership roles as needed.

In conclusion, the rise of the gig economy presents both challenges and opportunities for succession management. Organizations that successfully adapt their strategies to this new reality will be better positioned to thrive in the competitive business landscape. This requires a flexible, skills-focused approach to talent management, a strong organizational culture that engages all workers, and proactive development initiatives that prepare both traditional and gig workers for future leadership roles. By embracing these strategies, organizations can ensure a robust pipeline of leaders ready to navigate the complexities of the modern business environment.

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Succession Management Case Studies

For a practical understanding of Succession Management, take a look at these case studies.

Succession Management Enhancement in Professional Services

Scenario: The organization is a leading professional services provider specializing in financial advisory and consulting, facing challenges in its Succession Management processes.

Read Full Case Study

Succession Planning Framework for Aerospace Leader in the D2C Sector

Scenario: An established aerospace firm in the direct-to-consumer market is grappling with identifying and developing internal successors for its critical leadership roles.

Read Full Case Study

Succession Planning Enhancement for a Fast-growing Tech Firm

Scenario: The organization is a rapidly expanding technology company with a proven track record of developing innovative and disruptive solutions in its industry.

Read Full Case Study

Succession Management Enhancement for Global Retailer

Scenario: A large-scale retailer with a multinational presence is facing an imminent leadership gap due to an aging executive team and a lack of prepared successors.

Read Full Case Study

Succession Management Enhancement in Telecom

Scenario: The organization is a multinational telecommunications company facing challenges in ensuring leadership continuity and preparing for future organizational needs.

Read Full Case Study

Succession Planning Initiative for Ecommerce Platform

Scenario: The organization in focus operates a thriving ecommerce platform that has disrupted the retail market with its innovative business model.

Read Full Case Study


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Related Questions

Here are our additional questions you may be interested in.

How can companies measure the success and effectiveness of their succession planning efforts?
Maximize Succession Planning Effectiveness with SMART KPIs, Continuous Feedback, and Strategic Alignment to Enhance Leadership Continuity and Organizational Performance. [Read full explanation]
What are the implications of artificial intelligence on identifying and training potential successors?
AI is revolutionizing Succession Planning by making it more dynamic, predictive, and personalized, improving the identification and training of successors and ensuring a robust leadership pipeline. [Read full explanation]
What strategies can family businesses use to manage conflicts arising from succession planning?
Family businesses can manage succession planning conflicts through Clear Governance Structures, Strategic Succession Planning, promoting a Culture of Open Communication, and implementing Fair and Transparent Processes, all aimed at ensuring a smooth transition. [Read full explanation]
How can companies leverage data analytics in succession planning to predict leadership success more accurately?
Companies can use data analytics in succession planning to accurately identify high-potential candidates, tailor development programs, and predict leadership success, enhancing Strategic Planning and Business Transformation. [Read full explanation]
How is the rise of remote work impacting succession planning strategies and practices?
The rise of remote work has significantly transformed Succession Planning, necessitating adaptations in talent identification, development, and transition practices through digital tools, emphasizing soft skills, and revising successor selection criteria for organizational resilience in a virtual environment. [Read full explanation]
What are the implications of artificial intelligence on identifying and grooming potential leaders for succession planning?
AI is transforming Succession Planning by enhancing leadership potential identification, offering customized development programs, and enabling continuous monitoring and predictive planning, thereby preparing organizations for future leadership needs. [Read full explanation]

 
Joseph Robinson, New York

Operational Excellence, Management Consulting

This Q&A article was reviewed by Joseph Robinson. Joseph is the VP of Strategy at Flevy with expertise in Corporate Strategy and Operational Excellence. Prior to Flevy, Joseph worked at the Boston Consulting Group. He also has an MBA from MIT Sloan.

It is licensed under CC BY 4.0. You're free to share and adapt with attribution. To cite this article, please use:

Source: "How is the shift towards a more gig-based economy affecting long-term succession management strategies?," Flevy Management Insights, Joseph Robinson, 2025




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