Title Human Resource Management and the Gig Economy: Challenges and Opportunities at the

Intersection Between Organizational HR Decision-Makers and Digital Labor Platforms

Authors(s) Kuhn, Kristine, Meijerink, Jeroen, Keegan, Anne E.

Publication date 2021-08-19

Publication information Kuhn, Kristine, Jeroen Meijerink, and Anne E. Keegan. “Human Resource Management and the
Gig Economy: Challenges and Opportunities at the Intersection Between Organizational HR
Decision-Makers and Digital Labor Platforms.” Emerald, 2021.

Series Research in Personnel and Human Resources Management, Vol. 39

Publisher Emerald

Item record/more http://hdl.handle.net/10197/24617

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Accepted Version

Human Resource Management and the Gig Economy:

Challenges and Opportunities at the Intersection Between
Organizational HR Decision Makers and Digital Labor Platforms

Kristine M. Kuhn
Washington State University
Jeroen Meijerink
University of Twente
Anne Keegan
University College Dublin

ABSTRACT

This work examines the intersection between traditional human resource management and the

novel employment arrangements of the expanding gig economy. While there is a substantial

multidisciplinary literature on the digital platform labor phenomenon, it has been largely centered

on the experiences of gig workers. As digital labor platforms continue to grow and specialize, more

managers, executives, and human resource practitioners will need to make decisions about whether

and how to utilize gig workers. Here we explore and interrogate the unique features of human

resource management (HRM) activities in the context of digital labor platforms. We discuss

challenges and opportunities regarding 1) HRM in organizations that outsource labor needs to

external labor platforms, 2) HRM functions within digital labor platform firms, and 3) HRM

policies and practices for organizations that develop their own spin-off digital labor platform. To

foster a more nuanced understanding of work in the gig economy, we identify common themes
 2

across these contexts, highlight knowledge gaps, offer recommendations for future research, and

outline pathways for collecting empirical data on HRM in the gig economy.
 3

Human Resource Management and the Gig Economy:

Challenges and Opportunities at the Intersection Between
Organizational HR Decision Makers and Digital Labor Platforms

The rise of the gig economy has transformed not only the lives of millions of workers worldwide

but also the operations and outcomes of businesses, both small and large, that rely on digital

platforms to source labor. Location-based (on-site) gig workers include skilled chefs as well as

those who deliver food orders, and remote (online/virtual) gig work incorporates both

(semi)anonymous crowd workers who do online piecework and highly skilled knowledge

professionals who work on longer term projects. The term “gig economy” has sometimes been

used to refer broadly to all casual or contingent work arrangements, while “platform economy”

and “sharing economy” can refer to both labor (e.g., Uber, Upwork) and capital-based platforms

(e.g., Etsy, Airbnb). Increasingly, however, both popular and academic discourse are converging

on a shared understanding of the gig economy as paid labor facilitated by intermediary platform

firms that connect organizations or consumers with on-demand workers via apps or web sites

(Aloisi, 2015; Friedman, 2014; Koutsimpogiorgos, Van Slageren, Herrmann, & Frenken, 2020;

Kuhn & Maleki, 2017; Meijerink & Keegan, 2019; Prassl, 2018; Stewart & Stanford, 2016).

While the field of human resource management (HRM) has developed a substantial

scholarly literature on temporary employees and other forms of non-standard work (Cappelli &

Keller, 2013; Connelly & Gallagher, 2004; Fisher & Connelly, 2017; Lepak & Snell, 1999;

McLean Parks, Kidder, & Gallagher, 1998; Pfeffer & Baron, 1988), digital labor platforms

constitute a novel employment arrangement (Kuhn & Maleki, 2017; Vallas & Schor, 2020).

Electronically-mediated gig work poses unique challenges to human resource management theory

and research (Aguinis & Lawal, 2013; Kuhn, 2016; Meijerink & Keegan, 2019).
 4

To date most academic and public discourse on the gig economy has centered on workers’

experiences and outcomes (Prassl, 2018; Rosenblat, 2019). But as digital labor platforms continue

to proliferate and the number of people seeking gig work continues to grow, more organizational

decision makers such as executives, line managers, and human resource practitioners will intersect

with the gig economy as part of their employee roles, raising many questions of practical

importance to traditional organizations. Here we provide a framework for considering the

challenges and opportunities posed by the gig economy and digital labor platforms for such

organizational decision makers. In particular, we highlight how the HR policies and practices

organizations enact regarding gig work and gig workers should be informed by HR expertise. The

executives, line managers, and project managers making these decisions do not necessarily have

significant training or background in human resource management. HR professionals can benefit

from expanding their scope of influence beyond the management of the firm’s employees to offer

strategic and operational guidance on non-employee gig labor. Similarly, an HR perspective has

much to offer research on the digital labor platform phenomenon, which until recently was largely

derived from other disciplines such as sociology, information systems, and economics (e.g.,

Sutherland & Jarrahi, 2018; Vallas & Schor, 2020).

This paper is organized as follows. We begin by describing the nature of gig work and

discuss unique features of HRM in the gig economy – i.e., HRM without employment, algorithmic

HR management, and a dispersed HRM function – that challenge current thinking in the HRM

literature. Then we discuss three ways HRM (in traditional organizations) intersects with digital

labor platforms and the challenges as well as opportunities that these intersections present for the

managers, HR practitioners, and other employees who engage with gig workers. First, we outline

the diverse ways organizations are sourcing contingent labor through external digital labor
 5

platforms, and the benefits of addressing associated issues through a HR lens. Second, we consider

HRM and labor processes within digital labor platform firms themselves, detailing issues relevant

to the service employees that are employed by the platform firm and who make decisions about

gig workers and their management. Third, we discuss the growing trend of large firms developing

(or acquiring) their own spin-off and/or in-house platforms, addressing the strategic implications

for such firms and for HR practice. Throughout we identify common themes in the interplay

between organizations, their employees, and their non-employee gig workers: outcomes for gig

workers, social legitimacy, and organizational effectiveness. The overarching framework that

underlies this work is presented in Figure 1. We conclude by spotlighting specific knowledge gaps

that merit future research into HRM and the gig economy, and outline barriers and pathways to

conducting this research.

Insert Figure 1 about here

THE NATURE OF GIG WORK

Gig workers are officially considered to be self-employed, but the digital platforms they use to

find clients shape their working conditions and compensation to varying degrees. Technology

affords labor platforms ways to manage nominally independent gig workers while still allowing

them to deny the existence of an employment relationship (Meijerink, Keegan, & Bondarouk,

2021). Most notably, digital labor platforms utilize automatically generated reputational feedback

mechanisms and implement algorithmic controls that can determine compensation and eligibility

for work opportunities (Duggan, Sherman, Carbery, & McDonnell, 2020; Wood, Graham,

Lehdonvirta, & Hjorth, 2019a).

 6

Gig workers in wealthy countries do not enjoy the same regulatory protections and benefits

offered to those classified as employees, and so they can be viewed as prime exemplars of the

precariat, i.e. workers who bear a great deal of risk with limited opportunity (e.g., Berg & Johnston,

2019; Gray & Suri, 2019; Pfeffer, 2015; Stewart & Stanford, 2017; Tran & Sokas, 2017). Those

who do gig work as a side hustle to supplement regular waged employment may be better

positioned to benefit from the flexibility and entrepreneurial aspects of gig work, and so labor

platforms can arguably be viewed as free-riding off traditional employers (Schor, Attwood-

Charles, Cansoy, Ladegaard, & Wengronowitz, 2020) However, growing numbers of people

around the world depend on digital labor platforms as their primary source of income (Wallenstein,

de Chalendar, Reeves, & Bailey, 2019), including workers with weaker labor market positions

such as migrants (Van Doorn, Ferrari, & Graham, 2020).

The sustainability of gig work for individual workers, and their economic vulnerability, are

ongoing topics of debate (Kost, Fieseler, & Wong, 2020; Prassl, 2018; Rosenblat, 2019),

particularly in the United States where health care access remains largely tied to employment.

Digital labor platforms that facilitate remote (i.e., online, such as Fiverr or Upwork) work may

disproportionately benefit individuals in emerging economies who can use platform-generated

signals of their quality to obtain better paid work from foreign clients (Kanat, Hong, & Raghu,

2018; Lehdonvirta, Kässi, Hjorth, Barnard, & Graham, 2019). Although remote gig work may

boost incomes for workers in developing nations, it also subjects them to risks like predatory

intermediaries and social isolation (Graham, Lehndonvirta, Wood, Barnard, Hjorth, & Simon,

2017).

Most empirical studies of gig workers have examined those who use prominent on-demand

consumer service platforms, particularly Uber drivers (e.g., Rosenblat & Stark, 2016) and
 7

“Turkers” who do remote piecework tasks via Amazon’s Mechanical Turk platform (Keith,

Harms, & Tay, 2019). Digital labor platforms vary on a number of dimensions, however, and even

the experiences of workers on the same platform are likely to vary depending on individual

differences and the broader context.

For example, qualitative studies of Uber drivers in the United States and Europe have found

sharply mixed emotional reactions and substantial variation in work-related attitudes (e.g., Malin

& Chandler, 2017). Quantitative research has shown that the flexibility and autonomy of gig work

creates surplus economic value for drivers (Chen, Rossi, Chevalier, & Oehlsen, 2019) as well as

greater evaluative subjective well-being (Berger, Frey, Levin, & Danan, 2019), but only for those

drivers motivated by this aspect of gig work. Some evidence suggests that the availability of Uber

as an income-earning option allows people in wealthy countries to better weather unemployment

shocks and other financial crises, and therefore it is still arguably a boon even to those drivers

motivated by push rather than pull factors (Nian, Zhu, & Gurbaxani, 2020). Daniels and Grinstein-

Weiss (2019), however, found it increases financial hardship for lower income households even if

income volatility is reduced. In less developed countries, the advent of ride-hailing platforms may

have increased the precarity and reduced the autonomy of people providing transportation services,

because drivers no longer have the ability to negotiate with customers and apps supplant former

methods of acquiring passengers (Sperber, 2020).

To date, there is limited empirical research on higher income professionals who utilize

freelance labor platforms. HR and organizational behavior (OB) research on independent workers

in knowledge-intensive and creative fields has typically studied freelancers who use word-of-

mouth or other traditional methods to find clients (Ashford, Caza, & Reid, 2018; Bidwell &

Briscoe, 2009; Petriglieri, Ashford & Wrzesniewski, 2019). But tens of millions of professional
 8

freelancers now rely for all or part of their income on labor platforms such as Upwork and

Freelancer.com, where they compete for project-based work. Some recent studies have

demonstrated that platform features and policies are critical to shaping the experiences of these

presumably more autonomous gig workers, analogous to their effects on remote gig workers who

perform less complex and more repetitive work (see Lehndonvirta, 2018). Bellesia and her

colleagues (Bellesia, Mattarelli, Bertolotti, & Sobrero, 2019) studied IT developers, translators,

and graphic designers who source remote work from a major labor platform, finding evidence that

platform design shapes construction of their work identities. Sutherland, Jarrahi, Dunn, and Nelson

(2020) report that freelancers using the Upwork platform must develop “gig literacies” to leverage

the platform effectively as well as adapt to its imposed structures and control mechanisms. In

addition to the well-established open marketplace platforms such as Upwork, newer curated talent

platforms for specialized professions such as physicians (Li, Tang, Jiang, Yen, & Liu, 2019) and

lawyers are proliferating (Kuhn, 2021); to date workers on these pre-vetted platforms have

received very little research attention.

Efforts to assess the number of gig workers and the overall economic impact of labor

platforms have been complicated by methodological limitations and differences in how gig work

is defined or interpreted by survey respondents (Abraham, Haltiwanger, Sandusky, & Spletzer,

2018; Collins, Garin, Jackson, Koustas, & Payne, 2019; Kuhn & Galloway, 2019). While perhaps

as much as a third of the workforce in the United States and Europe are in flexible or non-standard

employment arrangements (Bureau of Labor Statistics, 2018; Spreitzer, Cameron, & Garrett,

2017), an admittedly smaller percentage relies primarily on digital labor platforms for income

(Wallenstein et al., 2019). Yet in 2016 an estimated 8% of American adults had earned money in

the previous year by taking on a job or task via a digital platform (Smith, 2016). In the United
 9

Kingdom, 4% of workers were estimated to have participated in the gig economy in 2017 (CIPD),

and the overall size of the gig economy was believed to have doubled between 2016 and 2019

(Partington, 2019). A recent representative survey in Australia found that 13% of the population

had performed digital platform-mediated labor at some point, with one-third of those having

performed both in-person location-based gig work and internet-based gig work (McDonald,

Williams, Stewart, Mayes, & Oliver, 2019). And there is no question that the global demand for

internet-based remote gig labor continues to grow at a remarkable pace (Kässi & Lehdonvirta,

2018).

Extrapolating from current trends, some pundits have sounded dire warnings about “the

Uberization of everything” and warned readers that “the gig economy is coming for your job”

(Kim, 2020). At the time of this writing, the economic crisis and sudden shift to remote work

caused by the COVID-19 pandemic is believed to be pushing more knowledge workers into

platform-based work (Hasija, Padmanabhan, & Rampal, 2020). Digital labor platforms are

adapting their infrastructure and focus to cope with changes in supply and demand for labor under

current pandemic-related circumstances. For example, in response to the sharp drop in ride-hailing,

Uber launched Work Hub in the spring of 2020, allowing its freelance “partners” to find work on

other Uber platforms as well as temporary opportunities with a number of corporations (including

McDonalds, UPS, and Pepsico) that Uber allows to use their system (Chandler, 2020).

Some labor experts, however, contend the gig economy is overhyped (Zumbrun, 2019),

because most people will continue to prefer traditional employment. Crouch (2019) identifies

limitations in the digital labor platform business model that could to prevent its expansion beyond

current limited markets, such as the lack of willingness on the part of the state to provide social

benefits to gig workers. Fleming, Rhodes, and Yu (2019, p. 488) characterized digital labor
 10

platform work as a minor phenomenon that will remain on the fringes because it is “unsuitable to

the realities of work on a large scale.”

We agree that digital labor platforms are unlikely to supplant traditional employment, but

we are confident that digital labor platforms will continue to play a significant role in the global

economy, both in their current forms and perhaps in ways currently unforeseen. While legal

challenges to the employment classification status of digital platform workers have been mounted

in several countries over the past decade, sometimes with success (Meijerink et al., 2021;

Schechner & Rana, 2020), as of this writing the business model appears well-established and

positioned for continued growth. In 2020, Uber and other platform firms spent over $200 million

in support of a California ballot initiative to ensure the continued status of gig workers as

independent contractors, which was approved by a strong majority of voters. Moreover, some large

hospitality corporations joined with digital platform firms to lobby for federal legislation to

facilitate classifying anyone who finds work via online platforms as an independent contractor

(Pinto, Smith, & Tung, 2019). This can be taken as evidence that traditional corporations see

strategic potential in the platform business model as a way to supplement, or in some cases perhaps

replace, their workforces.

THE UNIQUE FEATURES OF HRM IN THE GIG ECONOMY

The gig economy challenges conventional thinking in the HRM literature and its rapid growth

presents a new reality to organizational HR decision makers. We see three emerging themes that

signify the unique features of HRM in the gig economy and which warrant attention: (1) HRM

without employment (Meijerink & Keegan, 2019), (2) algorithmic HR management (Duggan et
 11

al., 2019; Lee, Kusbit, Metsky, & Dabbish, 2015a), and (3) a dispersed HRM function (Meijerink

et al., 2021).

HRM without employment

Gig work challenges one of the key touchstones of HRM research: the standard employment

relationship between an organization and employee. Gig workers are independent contractors that

receive intermediation services from digital labor platforms and offer on-demand services to a

contracting organization or client. Neither digital labor platform firms nor organizations in need

of contingent labor are officially employers of gig workers. While employees in standard

employment relationships often perform jobs that comprise an integrated set of roles and

responsibilities (Capelli & Keller, 2013; Lepak & Snell, 1999), gig workers perform work that is

task-based and usually of short duration, such as programming a piece of software (e.g., Upwork),

ride-hailing (e.g., Uber), translating a piece of text (e.g., Fiverr), delivering a meal (e.g.,

Deliveroo), or day labor such as warehousing (e.g., YoungOnes), bartending (e.g., Temper) or

cleaning (e.g., Helpling). That said, some gig workers do perform work that is more or less job-

based, such as interim project managers or consultants that organizations hire through their own

digital labor platforms for a longer period of time, or customer service representatives answering

calls for major corporations via the intermediary services of a platform (discussed in later sections).

Similar to their day laborer counterparts, however, these gig workers remain independent

contractors operating outside the confines of an employment relationship.

While disavowing employer responsibilities for gig workers, digital labor platforms

nevertheless rely on a range of HRM activities to manage them, including workforce planning to

match supply and demand for contingent labor (Chen, Mislove, & Wilson, 2015; Meijerink &
 12

Keegan, 2019; Meijerink et al., 2021), structuring compensation and rewards to retain gig workers

and induce desired behavior (Rosenblat, 2019; Veen, Barratt, & Goods, 2019), performance

management by means of algorithmic surveillance (Kellogg, Valentine, & Christin, 2020;

Newlands, 2020), and job design to provide workers with the autonomy to work whenever and for

whomever they want (Kuhn & Maleki, 2017; Wood et al., 2019a). From an HRM perspective, this

is surprising as HRM activities are often conceptualized – based on social exchange theory (Blau,

1964), attribution theory (Bowen & Ostroff, 2004), and the inducements-contributions model

(March & Simon, 1958) – as means to manage the employment relationship between an employee

and employer (Lepak & Snell, 1999; Tsui, Pearce, Porter, & Tripoli, 1997).

To conceptualize how digital labor platforms implement HRM activities without instituting

an employment relationship, Meijerink and Keegan (2019) proposed the adoption of an ecosystem

perspective. An ecosystem refers to a collective of interacting yet semi-autonomous entities that

are interdependent and therefore need to be somewhat hierarchically controlled (Jacobides,

Cennamo, & Gawer, 2018; Wareham, Fox, & Cano Giner, 2014). Digital labor platforms, gig

workers, and organizations that request gig labor make up platform ecosystems: independent

entities that nevertheless rely on one another in processes of intermediation between supply and

demand for labor. Amongst others, these interdependencies are manifested in the need for digital

labor platforms to create network effects (Lin & Lu, 2011), commit gig workers to the platform

economy (Meijerink et al., 2021), and ensure gig workers comply with the interests of

organizations that contract with gig workers (Shapiro, 2018; Veen et al., 2019; Wood et al., 2019a).

Thus, HRM activities in the gig economy can best be viewed as instruments for governing platform

ecosystems, rather than as instituting employment relationships (Meijerink & Keegan, 2019).

Algorithmic HR management
 13

Digital labor platforms are a special HRM context in part because of their heavy reliance on the

use of software algorithms to automate HR-related decision making in areas such as selection,

appraisal, workforce planning, and compensation (Duggan et al., 2019; Lee et al., 2015a; Veen et

al., 2019). Amongst other purposes, this involves the use of software algorithms that decide which

gig workers are allowed access to the online marketplace of a platform firm (Jarrahi & Sutherland,

2019; Meijerink et al., 2021; Veen et al., 2019), those that compile and publish reputation

information from client ratings and deactivate those workers who drop below standards (Rosenblat

& Stark, 2016), and thoses that determine and adjust pay rates for gig workers and calculate surge

prices (Rosenblat, 2019). Together these processes are referred to as algorithmic management, a

system of control that relies on machine-readable data and algorithms to automate HR-related

decision-making (Duggan et al., 2019; Lee et al., 2015a; Möhlmann, Zalmanson, Henfridsson, &

Gregory, 2020).

Algorithmic management comes in many different shapes and forms, and may range from

the use of relatively simple sorting algorithms up to self-learning algorithms that fully automate

decision-making and execution without (much) human involvement (Cheng & Hackett, 2021;

Strohmeier & Piazza, 2016). To offer more clarity, three broad categories of HRM algorithms have

been proposed: descriptive, predictive, and prescriptive (Davenport, 2013; Leicht-Deobald et al.,

2019). Descriptive HRM algorithms are those that support human decision makers by analyzing

worker data via data processing techniques (e.g. data extraction, sorting, and cleaning). This can

involve integrating data stored in different databases and/or reporting relatively simple statistics

such as mean scores, distributions, or associations between variables of interest. HR managers may

rely on descriptive algorithms to compare relevant metrics like worker performance, absenteeism,

or personality traits. Predictive HRM algorithms involve advanced regression techniques,

 14

machine-learning algorithms, or data mining approaches used for forecasting purposes in order to

provide a score that represents the likelihood that an outcome will occur. As such, predictive HRM

algorithms assist HR decision makers in areas such as recruitment and selection (e.g., predicting a

job candidate’s potential), workforce planning (e.g., predicting turnover) or performance

management (e.g., predicting future performance). Prescriptive HRM algorithms involve

simulations and scenario-based techniques to propose what should be done in the light of possible

situations, and managers decide whether or not to follow those prescriptions (e.g., whether to hire

a candidate suggested by a hiring algorithm).

Both ‘traditional’ organizations as well as digital labor platforms rely on algorithmic

management. Although HRM algorithms are closely linked in both the academic and popular

imagination with digital labor platforms, traditional firms rely on many of the same descriptive,

predictive, and prescriptive algorithms, often underpinned by the same software codes (Cheng &

Hackett, 2021; Kellogg et al., 2020). What sets digital labor platforms apart, however, is their

pervasive use of prescriptive algorithms to fully automate decision-making processes and remove

intervention by human decision-makers. While in traditional organizations a human manager

reviews the output of HRM algorithms before making the final call (Angrave, Charlwood,

Kirkpatrick, Lawrence, & Stuart, 2016; Marler & Boudreau, 2017; Van den Heuvel & Bondarouk,

2017), in the gig economy context (prescriptive) algorithms are more likely to automate the

execution of HRM activities without any individual oversight by a human manager. This is not to

say that human managers play no role in digital labor platforms. But in the context of digital labor

platforms, human managers are increasingly subject to being replaced by algorithmic management,

not just augmented (Newlands, 2020).

 15

The use of prescriptive HRM algorithms to automate HRM activities follows in part from

the need of digital labor platforms to manage workers at scale. Digital labor platforms engage with

thousands of gig workers that need to be matched with end clients in a rapid and efficient manner.

As one example, for 2018 Uber reported partnering with 3.9 million drivers who completed 10

billion trips worldwide (Uber Newsroom, 2021). It would be impossible and too costly for digital

platforms to hire sufficient human managers to perform all of the matchmaking and HRM activities

to which gig workers are subject. In fact, the profit margins of digital labor platforms are often

marginal (Van Doorn & Badger, 2020), which necessitates the use of prescriptive HRM algorithms

to keep operating costs at a minimum.

The benefits of algorithmic management to digital labor platforms come at a cost to gig

workers. For example, researchers have shown how algorithmic management represents a new

type of workplace surveillance that amplifies managerial control to capture economic value from

workers (Kellogg et al., 2020; Newlands, 2020; Veen et al., 2019). Moreover, scholars argue that

algorithmic management reduces gig workers’ autonomy while creating information asymmetries

(Rosenblat, 2019; Shapiro, 2018), decreasing human sensemaking (Leicht-Deobald et al., 2019)

and automating discipline (Kellogg et al., 2020). Accordingly, the gig economy context affords

and requires HRM scholars to examine how HRM algorithms impact (undesirable) business and

worker outcomes.

Dispersed HRM functions

The gig economy context is characterized by the dispersal of the HRM function, or the collective

of actors responsible for the design and execution of HRM activities (Keegan, Bitterling, Sylva, &

Hoeksema, 2018; Van Mierlo, Bondarouk, & Sanders, 2018; Ulrich, Younger, & Brockbank,
 16

2008; Valverde, Ryan, & Soler, 2006). The HRM function within traditional organizations can

also be dispersed as evidenced by the increasing number of organizational actors that bear HRM

responsibilities, such as top management (Boada-Cuerva, Trullen, & Valverde, 2019), line

managers (Bos-Nehles, Van Riemsdijk, & Looise, 2013), HR shared service centers (Maatman &

Meijerink, 2017), centers of HR expertise (Boglind, Hällstén, & Thilander, 2011), HR business

partners (Keegan & Francis, 2010), project managers (Keegan & Den Hartog, 2019; Keegan et al.,

2012) and employees/self-managing teams (Bondarouk, Bos-Nehles, Renkema, Meijerink, & De

Leede, 2018; Meijerink, 2014). In the gig economy context, there may even be more HRM actors,

many of whom traditionally did not take up HRM responsibilities, thereby further dispersing the

HRM function. For example, Lustig, Rintel, Scult, and Suri (2020) show how procurement

managers in a global technology company partnered with Upwork and thus took on some HR

responsibilities for managing freelance workers hired through the platform. In addition, individual

consumers take part in the HR management of gig workers by leaving online reviews that are fed

into performance management processes (Rosenblat & Stark, 2016). In a study of the Deliveroo

and Uber Eats platforms, Meijerink et al. (2021) show that restaurant owners and employees

engage in HRM activities such as training and providing incentives to induce desired gig worker

behaviors. Finally, Askitas et al. (2018) describe the involvement of independent licensing and

training authorities in supporting workers on the French labor platform Heetch. These various HR

actors do not necessarily have a background in HRM or HR-related expertise, which raises

interesting questions regarding gig worker outcomes when HRM functions are dispersed across a

variety of traditional and non-traditional actors.

Digital labor platforms have a strong incentive to engage non-traditional HRM actors in

HRM processes. We see two reasons for this. First, digital labor platforms rely on consumers
 17

and/or non-HR professionals from contracting organizations (e.g., restaurant employees in the case

of Deliveroo or purchasing managers of large corporations) to provide the data underlying their

algorithmic HR management practices. Through leaving online performance reviews, selecting

among gig workers, or making choices about pay or tips, platform clients generate data used to

train a platform’s self-learning HRM algorithms in areas such as workforce planning, performance

management, and compensation. Second, digital labor platforms rely on others to exercise control

over gig worker performance, or to support and develop gig workers, in order to institute HRM

without employment. Research shows that digital labor platforms avoid exercising (too much)

control over gig workers, or offering them explicit support such as training, as this could imply an

employment relationship, leaving them liable to sanctions (Aloisi, 2015; Frenken, Vaskelainen,

Fünfschilling, & Piscicelli, 2020). At the same time, digital labor platforms need to control gig

workers and ensure their competence because a steady supply of capable workers is central to their

business model. As shown by Meijerink et al. (2021), digital labor platforms realize this by

devolving and outsourcing HRM activities to other platform users such as consumers,

representatives of hiring organizations, training authorities, and even gig workers themselves (Irani

& Silberman, 2013). Thus the dispersing of HRM related activities over various traditional and

non-traditional actors, including platform users, essentially allows the digital labor platform to

exercise control over gig workers, and to develop their capabilities, while avoiding an overt

employment relationship.

As the above examples show, the three distinguishing features of HRM in the gig

economy—HRM without employment, algorithmic HR management, and dispersed HRM

function—are tightly interrelated and reinforce one another. The end result is that (HR) decision

makers within traditional organizations, such as HR practitioners, line managers, and

 18

organizational leaders, need to make decisions about when and how to utilize digital-enabled gig

workers, as well as deal with the associated HRM consequences of their decisions.

To date there has been limited research and theory development on the gig economy

targeted at this level of analysis, or that offers practical guidance to organizational decision makers.

In this work we explore how organizations can benefit from digital labor platforms in a sustainable

and responsible fashion, while mitigating the challenges presented by engaging with gig workers.

In doing so, we draw on existing literature in strategic HRM and contingent work arrangements,

while highlighting when past research may not necessarily generalize to digital labor platforms.

First, we examine how digital labor platforms and HRM interface when businesses source gig

labor from external digital platforms, whether for short-term projects, ongoing functions, or

supplementary service needs.

SOURCING LABOR FROM EXTERNAL DIGITAL LABOR PLATFORMS

A significant number of Fortune 500 corporations use well-known digital labor platforms such as

Upwork and PeoplePerHour to source freelancers (Corporaal & Lehdonvirta, 2017). And in a

recent global survey of thousands of executives (Wallenstein et al., 2019), half of respondents

predicted that corporate adoption of such labor platforms would be a significant trend going

forward. But there are many ways in which traditional firms, both small and large, utilize external

digital labor platforms. For project-based and piecework that can be performed remotely, digital

labor platforms offer firms a flexible and global talent market. For on-site labor, digital labor

platforms can substitute for traditional temporary agencies (Meijerink & Arets, 2021), and can also

allow businesses to outsource services they previously staffed themselves or perhaps did not offer,

such as restaurant delivery.

 19

Digital labor platforms as a form of outsourcing

To understand the HRM opportunities and challenges that digital labor platforms present to client

businesses, we propose viewing gig work as a form of outsourcing. With respect to labor,

outsourcing is defined as the act of obtaining services from external organizations when those tasks

would otherwise be performed by the firm’s own employees. Thus using digital platforms to hire

skilled professionals, or to hire large numbers of online microworkers, or to quickly fill open shifts

on-site in warehouses or retail environments, can all be viewed as outsourcing. Outsourcing

describes a range of activities from spot market transactions such as hiring contract consultants to

ongoing long-term market relationships such as contracting out cafeteria or janitorial services, but

has classically been characterized as organizing tasks between firms rather than within a firm

(Davis-Blake & Broschak, 2009). Lead firms contract for labor needs with supplier firms, whose

workers are most often classified as employees.

When firms outsource labor to digital platforms, the extent to which the relationship is

more accurately viewed as one between the lead firm and the platform firm, or between the lead

firm and an individual gig worker as mediated by the platform, will depend on the duration and

nature of the work. But in all cases an individual gig worker is technically the supplier firm, i.e.

the smallest of small businesses. In some cases the boundary between temporary staffing agencies

and labor platforms can be blurry. In fact, the Dutch temporary staffing agency Randstad acquired

the largest European freelance marketplace platform, shifting its orientation from small and

medium-sized businesses to more corporate services. Upwork offers Upwork Enterprise solutions,

which it advertises as a cheaper and more scalable alternative to traditional staffing agencies, as
 20

well as a way to avoid misclassification risk. The staffing agency YoungCapital has developed its

own digital labor platform called YoungOnes.

The academic literature on traditional forms of outsourcing has examined its effects on

individuals, work group dynamics, organizational culture, and organizational performance

(Cappelli & Keller, 2013; Davis-Blake & Broschak, 2009). But it is not yet clear how this research

generalizes to outsourcing using digital platforms. Proponents tout new generations of talent

platforms as ways for companies to find workers with “the right skills for the right work at just the

right time” (Fuller, Raman, Bailey, & Vaduganathan, 2020) which can “strengthen the social and

talent framework at their own organization” (Wallenstein et al., 2019). Below we review related

research and theory to guide discussion on whether, and when, this rosy view is likely to be

justified.

Classic strategic human resource theory posits that high performance work practices

(HPWPs; Huselid, 1995; Pfeffer & Baron, 1998) such as training, employee participation in

decision making, and selectivity, serve as a key source of competitive advantage that cannot be

easily imitated. HPWPs develop skills and abilities that employees will be motivated to leverage

in support of organizational goals, thus driving performance, fostering employee satisfaction, and

reducing turnover (Becker & Huselid, 1998). Even in the retail industry, which is characterized by

high turnover and low pay, treating employees as valued resources deserving of investment rather

than as costs to be minimized has been shown to benefit firm financial performance as well as

employee well-being (Ton, 2012).

Workers in nonstandard employment arrangements are typically viewed as short-term and

often lower cost staffing options (Lepak & Snell, 1999). But in some contexts utilizing contingent

workers can help firms accumulate and share knowledge (Matusik & Hill, 1998). Nesheim, Olsen,
 21

and Kalleberg (2007) found that using personnel from consulting firms in core activities was

associated with innovation and value creation, although this was not the case for personnel from

temporary help agencies. Using a mix of both standard and contingent workers has been proposed

as a strategy that can achieve both efficiency and high performance (Lepak, Takeuchi, & Snell,

2003). Stirpe, Bonache, and Revilla (2014), however, found that firms with a higher incidence of

contingent labor were less likely to see productivity benefits from using HPWPs with their regular

employees.

A number of studies have also shown that the use of contingent labor can negatively affect

the attitudes and behaviors of regular staff (Davis-Blake & Broschak, 2009). For example, the

deployment of contingent workers has been associated with lower trust (Chattopadhyay & George,

2001), reduced commitment (George, 2003), poorer relationships with supervisors (Broschak &

Davis-Blake, 2006), and increased withdrawal behaviors (Way, Lepak, Fay, & Thacker, 2010)

among regular employees. Kraimer, Wayne, Liden, and Sparrowe (2005) found that regular

employees with low job security had worse job performance when they perceived temporary

workers as a threat. While most research on hybrid staffing models has operationalized contingent

labor as temporary employees, Davis-Blake, Broschak, and George (2003) compared the effects

of blending either contract workers or temporary employees with regular staff; contract workers

had a less negative effect on group dynamics because they were more administratively separate

than temporary agency employees. In other words, not all forms of “contingent labor” are

equivalent.

In a recent review, Flinchbaugh, Zare, Chadwick, and Essman (2020) detailed how

identity-relevant social influences and situational contingencies shape the impact of independent

contractors on organizational effectiveness. But they did not include gig workers, and
 22

acknowledge that the factors they model may not generalize to the more distal nature of platform-

based work (Flinchbaugh et al., 2020). To date, there is a notable dearth of research examining

how the use of digital platform labor affects standard employee attitudes and organizational

culture, or on the HR-related decision process of managers and executives using these platforms

in their organizational role. A few academic studies and reports, however, have illustrated how

digital labor platforms create HR-related challenges and opportunities for organizations using them

to source labor, which we use as the basis for the discussion below.

HRM-related challenges for (HR) managers of client businesses

In theory, digital labor platforms should afford firms the opportunity to quickly identify available

workers with the required skill sets for episodic work with minimal transaction and overhead costs.

For remote online work, the talent pool is global, which offers the potential for significant cost

savings. Using freelance platforms may well provide corporate clients the potential to source rare

skills, and possibly create value, as well as to outsource some labor needs cheaply. While Nesheim

et al. (2007) found that the use of contract consultants was appropriate for innovation-based

strategies and the use of temporary help agencies supported organizations competing on the basis

of low cost, large freelance labor platforms could potentially support either strategy given the wide

diversity of talent and skills available. In order to realize these benefits, however, line and project

managers would need to be able to confidently and appropriately navigate these platforms and

manage gig workers.

One recent qualitative study examined how corporate employees make decisions about

sourcing skilled freelance labor from digital platforms. Lustig et al. (2020) interviewed employees

of a global technology firm that set up a services program to facilitate its employees hiring
 23

freelancers on Upwork. Lustig et al. (2020) did find evidence supporting many of the supposed

advantages of freelance platforms over traditional staffing agencies. In particular, interviewees

reported it was much faster to hire and onboard freelancers using the platform, and it allowed them

to hire people for very short-term projects. Some employee clients hired freelancers for repetitive

tasks in order to free their own time for more creative, high impact pursuits, and some used the

platform to find rare skills; the ability to quickly source translation services was specifically noted

as an advantage of a global freelance platform compared to a staffing agency. But Lustig et al.

(2020) also describe a tension between lower overhead for hiring and onboarding and higher

management overhead when using these freelancers; employee clients did not necessarily know

how to navigate the platform, vet freelancers, or pay them appropriately, and coordinating with

remote workers posed challenges that on-site contract employees did not.

Analyses of Upwork transaction data suggest that corporate clients face a learning curve

when hiring individuals from freelance labor platforms (Leung, 2018; Leung, 2021), and thus over

time individual decision makers may become better at effectively leveraging this source.

Moreover, platforms may develop practices and policies that facilitate better decision making

and/or decision confidence (e.g., Barach, Golden, & Horton, 2020). As a general rule, however,

removing the intermediary services of a staffing agency leaves corporate clients to deal with

challenging governance issues. Claussen, Khashabi, and Seifried (2020) analyzed over 100,000

Upwork transactions, and concluded that the very platform features that should improve

performance (according to agency theory precepts) appear to have counterintuitive effects. Strict

worker time monitoring and projects enabling peer comparison were associated with lower

perceived project success as rated by both the client and the freelancer, likely due to psychological

contract breach (Claussen et al., 2020).

 24

One caveat with such research is whether ratings of freelancer performance provided to the

platform are valid measures of project success, which is also an ongoing issue in platform selection

decisions. Some of the corporate clients interviewed by Lustig et al. (2020) reported providing

good feedback ratings for work they discarded as unsuitable, either because they blamed

themselves for poor task definition or out of concern for freelancer well-being. Analyses of labor

platform data suggest substantial reputation inflation (Filippas, Horton, & Golden, 2018; Meijerink

& Schoemakers, 2020). The limitations of reputational feedback on platforms, paired with physical

distance and other factors hindering trust development, imply that the management and governance

of remote gig workers may be trickier to navigate compared to other types of contingent workers.

Some large corporations have outsourced major functions to digital labor platforms in ways

that are much more similar to the relationship between a lead firm and a supplier firm (rather than

between a firm and an individual gig worker). Arise Virtual Solutions is a “crowd-sourcing”

platform that provides call center workers to a number of well-known corporations. Outsourcing

call centers to contract firms has been common for decades, but Arise uses a platform labor model

to provide vetted call center agents it describes as “independent business owners.” In an interview

with a trade publication, the former CEO outlined the cost advantages compared to traditional call

centers (Meyer, as quoted in Redlus, 2013).

The biggest benefit of Arise is our ability to squeeze wastage out of a typical workday. A typical
employee has a utilization rate of 65 percent because you’re paying for their lunch, breaks, and
training. When you add the low utilization plus all the other overhead, the typical costs run into
the $30-per-hour range per person over which we are substantially more cost effective. What is
really unique about the Arise business model is that we schedule our work-at-home service
providers in 30 minute intervals, giving us the precise ability to match a client’s supply-and-
demand curve throughout the day almost exactly.
 25

Another labor platform model advantage cited by the Arise CEO is the ability to source agents

with specific characteristics without worrying about running afoul of the U.S. anti-discrimination

laws that apply to employment relationships (Redlus, 2013); while he provides a seemingly

innocuous purpose as an example, it is possible to imagine other cases where this supposed

advantage would be troubling. To date, we are unaware of any academic research that specifically

compares the digital labor platform model to more traditional outsourcing to contract firms. But

investigative journalists (Armstrong, Elliott, & Tobin, 2020) have recently detailed how gig

workers must pay Arise substantial upfront costs for training and equipment.

While corporate clients can exercise a great deal of control over the management and even

retention of individual gig platform workers (Armstrong et al., 2020), the intermediary function of

a platform like Arise is likely to both blunt governance issues and provide a buffer for any ethical

concerns. We speculate that the attitudes of corporate decision makers toward external gig workers

they do not personally communicate with may include positive beliefs about the flexibility and

opportunities this type of work provides (as found in surveys of consumers by Healy, Pekarek, &

Vromen, 2020).

In general, remote gig workers sourced from platforms may be less likely to be perceived

as threats to the job security of regular staff, whose attitudes have been shown to be negatively

affected by working alongside temporary agency personnel (Davis-Blake et al., 2003). This merits

future research, however. Lustig et al. (2020) note that some of the corporate employees they

interviewed did see the growth of the freelance economy as potentially undermining their own

positions. At the beginning of 2021, one of the largest U.S. grocery store chains announced its
 26

“strategic decision” to eliminate in-house delivery service, laying off employees to replace them

with gig workers from platforms like DoorDash (Rosenberg, 2021).

To date, however, there has been very little research on business use of gig labor platforms

for in-person tasks. Rather, most research on in-person labor platforms has assumed consumers as

the typical end client. But there are a number of platforms that provide on-demand workers to staff

shifts in restaurants, warehouses, and health care facilities. When and why businesses decide to

use gig labor platforms, or their advantages and disadvantages over traditional staffing agencies,

are questions that merit future study. This type of platform labor is most analogous to temporary

agencies, and it is possible much of the research on temporary agency workers (Davis-Blake &

Broschak, 2009) would generalize. In fact, one United States-based staffing platform, Instawork,

lets workers decide if they want to be independent contractors or W-2 employees. Because

platform-enabled workers tend to have control over their schedules, they may be more likely to do

platform work as a side hustle than workers sourced from traditional temporary agencies. The

extent to which mixing regular staff with platform-sourced independent workers results in two-tier

wage situations, and in whose favor, is likely to play an important factor in their effects on the

attitudes and performance of regular staff.

In many restaurants, regular staff frequently interact with gig workers who deliver meals.

The relationships between restaurants, platforms, and gig delivery workers may vary a great deal

depending on context, but in some ecosystems appear to be supportive and beneficial for all parties.

For example, some restaurants provide coupons and discounts to the gig workers who deliver their

meals (Meijerink et al., 2021). Yet some analyses in the United States argue the business model is

not sustainable because fees and commissions charged by delivery platforms absorb all profit

(Jiang, 2020). There have also been reports of gig workers being denied access to restaurant
 27

bathrooms, with pictures posted on social media of bathroom door signs stating “Do not use if you

are driver” (Ongweso & Gurley, 2020). Because gig workers are neither customers nor employees,

they may be at risk of second-class treatment, particularly for restaurants using multiple platforms

with high worker turnover.

Two interrelated challenges, which constitute clear research needs, are organizational

decision makers’ concerns about 1) the ethical treatment of gig workers and 2) their potential

misconduct. These may also be concerns when using temporary agencies or other nonstandard

employment arrangements, but those are often negotiated on a business-to-business basis. To the

extent that gig workers are seen as individuals, and particularly as individuals in precarious

situations, we propose that the issue of their ethical treatment may be especially salient. Corporate

employees sourcing labor from freelancer platforms are tasked with numerous decisions about

how to select, compensate, and evaluate individual freelancers. As found by Lustig et al. (2020),

these organizational decision makers may be unsure of what is fair or appropriate, particularly

when paying workers in countries with lower living wages; they reported anxiety caused by the

tension between wanting to give freelancers a fair deal and being responsible stewards of

organizational budgets.

Many employers, however, seem to have no qualms about treating gig workers poorly,

with many qualitative and quantitative analyses of Mechanical Turk workers in particular finding

such evidence (Bergvall‐Kåreborn, & Howcroft, 2014; Fieseler, Bucher, & Hoffmann, 2019). On

the other hand, Turkers may not necessarily perceive the employers on the platform as any worse

than those they encounter offline (Horton, 2011). Because academic researchers frequently use

Mechanical Turk and its competitors as affordable sources of data, scholars have also raised

concerns about the ethical treatment of research participants/workers (Gleibs, 2017).

 28

Theoretically, Mechanical Turk should be more competitive and efficient than typical labor

markets, but there is evidence of monopsony power due to the dominance of a few large employers;

thus workers may generally receive a small fraction of the value of their labor (Dube, Jacobs,

Naidu, & Suri, 2020). Not receiving any payment at all for work completed is also possible on

Mechanical Turk, but nonpayment is also fairly common for freelance work using traditional

means, and some gig labor platforms use escrow or other methods to protect freelancers from this

risk (Kuhn, 2016).

In parallel, there is also substantial reason for employers to be concerned about the potential

dishonesty or malfeasance of physically distant, often anonymous gig workers. A significant

proportion of microworkers appear willing to misrepresent their qualifications in order be eligible

for academic research studies and receive associated compensation (see MacInnis, Boss, &

Bourdage, 2020). In response to concerns about both the ethical treatment of Mechanical Turk

workers as well as their propensity to provide poor data, the competing Prolific platform’s website

advertises to researchers that “you need not worry about bots or sweatshops because we’re building

a community of people that trust each other.”

For corporate employers, there is limited available research that provides guidance on how

best to go about building trust under the challenging circumstances of remote labor platforms.

Burbano and Chiles (2020) conducted an experiment on Mechanical Turk where they could obtain

reliable measures of workers’ misconduct (shirking and/or fraudulently claiming bonus payments),

in a context where it was not necessarily obvious to workers this misconduct could be detected.

Communicating simple statements of organizational values (e.g., “Our company believes in

maintaining a culture of accountability and transparency . . .) reduced the level of observed

misconduct, as did threats of monitoring (e.g. “please note that we will randomly select 5% of
 29

HITs to be reviewed for data quality”). But warnings of possible monitoring also appeared to

negate any benefit of communicating organizational values, likely because warnings negatively

affected perceived trust (Burbano & Chiles, 2020). This finding complements Claussen et al.’s

(2020) analysis of Upwork platform data discussed earlier; monitoring is not a panacea to agency

problems when sourcing remote freelance labor.

HRM-related opportunities for (HR) managers of client businesses

HR professionals in organizations using digital platforms to source individual freelancers can aid

organizational effectiveness by providing training and education to project managers, and collating

data to identify trends and best practices relevant for their organization. Lustig et al. (2020)

observed that while hiring a freelancer from the platform seemed superficially similar to hiring

contract workers via a staffing agency (which many of their interviewees had prior experience in),

“there were unique transaction costs associated with freelance work due to the lack of

infrastructural support” (p. 37:5). This is an especially noteworthy finding given that this particular

company developed a training video for how to use the platform and also provided support

personnel as facilitators (Lustig et al., 2020). In contrast, many companies reportedly have not

implemented any central guidance or cohesive approach to the use of freelance platforms; frontline

managers simply utilize them on an ad hoc basis (Fuller et al., 2020).

Digital reputation systems for employers (i.e., clients or requesters) have been proposed as

a way to protect online gig workers from exploitation, and recent evidence also finds clear evidence

they can benefit employers as well. Benson, Sojourner, and Umyarov (2020) analyzed Mechanical

Turk data, and found that a good reputation allows employers to operate more quickly and at a

larger scale, and may be of particular benefit to small employers. To the extent this generalizes to
 30

other sorts of digital labor platforms, this suggests long-term benefits to firms of providing

guidance on fair treatment and expected pay ranges to those employees tasked with hiring and

managing remote gig workers.

HR would be well-positioned to serve as a strategic partner in compliance and ethical

issues, including those firms that use platforms like Arise which provide ongoing service functions.

Bush and Balven (2021) provide HR-theory based propositions on how remote gig workers who

perform cognitive piecework (or crowdworkers) can be better engaged via enhanced perceptions

of task meaningfulness, individual control, opportunities for interaction, enhancing worker-task

fit, and creative reward structures. Evidence supporting such practices, and in particular relevant

contingencies for their effectiveness, would demonstrate the value of an HR perspective for both

client organizations and gig worker well-being.

One underexplored opportunity for HR lies in the use of labor platforms for employee

support services, which may afford opportunities for efficiency and cost savings along with

improved employee satisfaction. More and more executives and HR professionals are making

choices about whether to use a platform firm “staffed” by independent contractors or a traditional

organization. For example, Uber for Business allows firms to set up a company account that

employees can connect to via their own accounts. Because receipts do not need to be submitted

and processed, and data collection is automated, there is great potential for cost savings. According

to data from a leading business expensing firm, the vast majority of ride-hailing transactions in the

United States in 2019 were to Uber or Lyft rather than taxis, a dramatic increase from even a few

years earlier (Hagan, 2019). Uber and Lyft have also taken some market share from car rentals for

business travel. While some employees might resent being forced to use ride-hailing platforms

because they perceive it as less safe or dislike corporate links to personal accounts, which would
 31

be important for HR staff to assess, many firms may appreciate the ready availability of data about

their employees’ travel and time.

Other platform firms that market to individual consumers have also now expanded into

corporate services. Talkspace provides remote mental health services using an independent

contractor model; it vets licensed therapists but officially each therapist manages his or her own

private practice. While the platform advertises to individuals, it also has a designated business

support function; employers are told they can “save hours lost to employee absenteeism, inquiry

resolution, referrals and reimbursement claims processing” and fast technical report to assess

return on investment (Talkspace, 2021). The Talkspace website also cites a published study, albeit

one based on a very small sample size and self-reported outcomes, as finding improvements in

absenteeism and productivity resulting from text therapy (DellaCrosse, Mahan, & Hull, 2019).

Whether this service would be of comparable quality to a conventional employee assistance

program is as of yet unknown. One potential advantage for employees is the much greater number

of therapists available. To the extent employees can more easily find a provider whose approach

and expertise meets their needs, it is at least possible such a service could provide better outcomes

for employees at a lower cost to their employers.

LABOR PROCESSES AND HRM WITHIN DIGITAL LABOR PLATFORM FIRMS

While the previous section focused on the implications of sourcing labor from digital platforms

for the (HR) management and employees of client businesses, this section shines a light on labor

processes and HRM within the organizational boundaries of digital labor platform firms. Although

the main labor force of digital labor platforms consists of gig workers, platforms also have regular

staff employees. Here we define ‘service employees’ as the individuals employed by the digital
 32

labor platform firm (e.g., Uber, Deliveroo, Upwork) who are responsible for the implementation

of the platform firm’s value proposition and the coordination of its online marketplace. Service

employees offer intermediation services to gig workers (and other platform users such as client

businesses or individual consumers), while gig workers perform tasks for client businesses and/or

individual consumers. Service employees in a digital labor platform include web developers,

marketers, dispatchers, account managers, customer service representatives, and business

developers – to name but a few. As in other organizations, digital platform firms employ line

managers and HR professionals who are responsible for the HR management of the platform’s

service employees.

The role of service employees in multi-faceted platform firms

In line with the behavioral view of HRM (Jackson, Schuler & Rivero, 1989), the responsibilities

and HR management of service employees can be understood by reflecting on the nature of

platform firms. To this end, one can conceptualize digital labor platforms in different ways (Vallas

& Schor, 2020): as intermediaries between supply and demand for contingent labor (Kuhn &

Maleki, 2017; Lehdonvirta et al., 2019), as a tech company (Lee et al., 2015a), as a start-up firm

financed and owned by venture capitalists (Gandini, 2019; Van Doorn & Badger, 2020; Veen et

al., 2019), and as an institutional entrepreneur (Frenken et al., 2020; Meijerink et al., 2021; Uzunca,

Rigtering, & Ozcan, 2018).

First and foremost, digital labor platforms are labor market intermediaries that matchmake

between supply and demand for contingent labor (Capelli & Keller, 2013; Duggan et al., 2020;

Meijerink & Keegan, 2019). The contingent workers that supply labor are nominally treated as

independent contractors. Accordingly, digital platform firms frame both gig workers and
 33

organizations (that demand contingent labor) as users or clients that are external to the platform

firm. These platform users transact in online marketplaces created and coordinated by the platform

firm and its service employees. Accordingly, the service employees in digital labor platform firms

are responsible, among other things, for attracting and retaining platform users to the online

marketplace, offering customer support services, enforcing rules about how platform users engage

with one another, innovating service provision, and managing customer accounts.

Second, digital labor platforms are technology companies, or at least, that is how some like

to present themselves (Harnett, 2020). The pervasive use of information and communication

technologies is what sets digital labor platforms apart from other labor market intermediaries such

as temporary and staffing agencies. While temporary agencies mostly rely on human service

employees (i.e., agency representatives) that matchmake supply and demand for contingent labor,

in the case of digital labor platforms this is devolved to platform users and/or automated using

technology (Meijerink & Keegan, 2019). This involves client businesses assessing online

reputation profiles in order to make hiring decisions or workers being algorithmically assigned to

a ‘gig’. These digital infrastructures are developed and maintained by the platform firm.

Accordingly, digital labor platforms employ service employees who are responsible for

programming software codes embedded in HRM algorithms, developing user interfaces, and

troubleshooting IT problems encountered by themselves and by gig workers.

Third, many digital labor platforms were founded by entrepreneurs seeking to introduce a

new business model and to scale their business beyond themselves as individual founders.

Accordingly, digital labor platforms can be conceptualized as start-up companies. These start-ups

compete with incumbent firms for market share in a conventional industry (e.g. Uber competing

with other taxi companies in the transportation industry) and with other start-up platforms for
 34

market share in intermediation services (e.g. Uber competing with rival platforms such as Lyft,

Juno, and Bolt). Outcompeting rival start-ups is paramount to the strategic success of these digital

platforms as they seek to create network effects (Rietveld & Schilling, 2021). Network effects

manifest when increased numbers of platform users improve the value of the intermediation

service provided (Lin & Lu, 2011). Digital labor platforms manage to attract more users (and thus

scale up) by creating network effects, while those that fail to create network effects lose users or

have too few to cover operating costs. To ensure a swift scale-up and realize market dominance,

digital labor platforms task service employees with exploring business opportunities for entering

new markets for intermediation services and with implementing aggressive marketing campaigns.

Fourth, digital labor platforms also can be seen as an object of investment for venture

capitalists. Digital platforms are dependent on the financial capital from early (venture capital)

investors to finance their competitive strategies for gaining market dominance. Amongst others,

this includes financial resources for offering discounts to platform users that support the creation

of network effects and outcompeting incumbent firms/rival platforms. As discussed by Van Doorn

and Badger (2021), the economic value of digital labor platforms to early investors hinges on two

aspects: the potential of digital platforms to become monopoly/oligopoly players and the

speculative value of the data collected by platform firms. Both aspects can be used to convince

investors to buy stocks in the platform at the time of its initial public offering (IPO). Here, the end

game for early investors is to cash out on their initial investments by ensuring the digital labor

platform scales quickly to make an early stock market launch (Van Doorn & Badger, 2021). In

line with this, service employees of the digital platform firm are responsible for attracting venture

capital to finance the platform’s competitive strategies and increase its value – and the online

marketplace it coordinates – to early and future investors.

 35

Finally, digital platforms can be seen as institutional entrepreneurs (Frenken et al., 2020;

Uzunca et al., 2018; Van Doorn, 2020). Institutional entrepreneurs are defined as “change agent[s]

who initiate divergent changes, that is, changes that break the institutional status quo in a field of

activity and thereby possibly contribute to transforming existing institutions or creating new ones”

(Battilana, Leca, & Boxembaum, 2009, p. 67). Given the novelty of their business model and use

of information technologies, digital labor platforms are ill-regulated, do not conform to current

regulatory schemes, and/or alter institutional contexts. For example, Pelzer, Frenken and Boon

(2019) describe how Uber – albeit unsuccessfully – attempted to get its UberPop service legalized

through changes in the Dutch taxi law. Moreover, digital platforms create institutional complexity

which manifests as incompatible descriptions coming from competing institutional logics

(Greenwood, Raynard, Kodeih, Micelotta, & Lounsbury, 2011). As discussed by Frenken et al.

(2020) and Meijerink et al. (2021), this complexity is rooted in incompatibilities between the

market logic and corporation logic. As online marketplaces, digital labor platforms propagate

market logic by claiming that its workers are independent contractors, which contradicts the

corporation logic that digital platforms also propagate by controlling their workers – as if they are

employees – to create network effects (Frenken et al., 2020; Meijerink et al., 2021). It is just such

tensions between autonomy and control of freelancers that led institutional players such as

politicians, labor unions, and journalists to criticize digital labor platforms and resulted in court

cases across the globe alleging false classifications of gig workers as self-employed (Aloisi, 2015).

In line with this, we expect that service employees of digital platforms – especially those that

interact with gig workers – are responsible for balancing institutional logics and influencing

institutional players to ensure the legitimacy of digital labor platforms.

 36

Taken together, digital labor platforms are based on the labor of gig workers but

nevertheless employ a range of service employees who help the platform firm offer intermediation

services to platform users, develop and maintain digital infrastructures, scale their online

marketplaces, outcompete rivals, start-up new platforms, attract capital, meet shareholder needs,

and address institutional demands. Accordingly, digital platforms have individuals on their payroll

that work in business functions such as:

- Technology development: e.g. software engineers that program algorithms or user

experience (UX) specialists that design user friendly interfaces;

- Sales and marketing: e.g. account managers that liaise with big (corporate) platform users

or marketers that attract new platform users to the platform’s online marketplace;

- Strategy: e.g. business developers looking for/creating new markets for intermediation

services or top management negotiating access to venture capital;

- Operations: e.g. customer service reps that address queries from platform users,

engagement managers that commit gig workers to the platform firm, and dispatchers that

allocate assignments / orders to gig workers;

- Public relations: e.g. lobbyists that seek to influence public policy makers and community

managers that mobilize a platform’s user base; and

- Legal: e.g. labor lawyers that handle court cases on the reclassification of gig workers and

legal specialists that settle disputes between platform users.

We realize that these business functions are by no means exclusive to platform firms. Nevertheless,

the particular nature of digital platform firms – as (pre-IPO) start-up firms that coordinate online
 37

marketplaces with the support of venture capital – have implications for the roles and

responsibilities of the service employees employed by the platform firm. This creates challenges

and opportunities for the HR management of these service employees, as discussed below.

HRM-related challenges for (HR) managers of digital labor platforms

First, as start-up firms, digital labor platforms face challenges regarding inflow, throughflow, and

outflow of service employees. Digital labor platforms need to create network effects and scale up

quickly to remain ahead of competitors. In the early start-up phase, this requires digital platform

firms to attract a large pool of incoming service employees. For instance, in less than five years,

Deliveroo grew to a size of over 2,500 service employees1, while Uber Technologies Inc. grew to

become a corporation of over 25,000 employees in less than 10 years2. Research shows that such

rapid growth creates tensions between ensuring an entrepreneurial culture and corporate

entrepreneurship among service employees, while at the same time ensuring the formalization of

jobs and corporate governance structures (Phan, Wright, Ucbasaran, & Tan, 2009). A quick scale-

up and the recruitment of large numbers of service employees can increase complexity and lead to

problems when growth is not managed well, or when conditions change. This happened to Uber

Technologies, which laid off more than 3,500 employees over a Zoom call as a result of the

COVID-19 pandemic (Kelly, 2020). Similarly, in 2019, after failing to gain sufficient German

market share, Deliveroo terminated its operations there in order to focus resources and investments

on increasing market share in other European food delivery markets (Lomas, 2019). As these

1
https://www.businessinsider.nl/deliveroo-history-and-timeline-2018-9?international=true&r=US (accessed on
December 18, 2020)
2
https://www.macrotrends.net/stocks/charts/UBER/uber-technologies/number-of-employees (accessed on
December 18, 2020)
 38

examples show, digital labor platforms can represent a volatile environment for service employees

who bear HRM-related responsibilities.

Second, due to their technologically advanced and intermediation-based business model,

digital labor platforms are often portrayed as a disruptive force (Dudley, Banister, & Schwanen,

2017; Drahokoupil & Fabo, 2016; Frenken et al., 2020). This puts them under a magnifying glass

by societal stakeholders. On the one hand, this offers opportunities for digital labor platforms to

attract and retain investors. For instance, Van Doorn and Badger (2020) note that the technological

developments (e.g. software algorithms that turn big data into monetary value) that underpin digital

labor platforms have speculative value which helps to attract venture capitalists. It is precisely

such technological developments, and the brand image that this creates, which also attracts many

job applicants to platform firms (Dabirian, Paschen, & Kietzmann, 2019). Accordingly, the

disruptive nature of digital platform firms and the visibility this creates likely help attract many

talented service employees. On the other hand, the heightened public profile of digital labor

platforms also presents challenges. For instance, several years ago, Uber was heavily criticized for

implementing algorithmic-based incentives and instructions that nudged driver partners into

hazardously long working hours (Rosenblat, 2019). It generated public uproar in countries such as

The Netherlands when Uber initially took a hands-off approach after multiple cyclists were killed

in accidents that involved Uber drivers. Accordingly, this creates HRM-related challenges in terms

of ensuring that software developers design algorithms that safeguard (or at best, do not actively

harm) gig workers’ occupational safety and well-being. Moreover, to reap the benefits of their

visibility, it is important that digital labor platforms and their service employees practice corporate

social responsibility, which can be instituted by means of HRM activities such as training and

appraisal practices (Voegtlin & Greenwood, 2016).

 39

Third, digital labor platforms face institutional complexity that may undermine their

legitimacy (Frenken et al., 2020; Meijerink et al., 2021). Institutional complexity manifests as

incompatibilities between institutional logics, i.e. ideal type sets of taken-for-granted rules, norms,

beliefs, worldviews, and assumptions that guide social interaction (Greenwood et al., 2011). As

conceptually shown by Frenken et al. (2020), digital labor platforms create institutional complexity

by controlling freelance workers who ought to be autonomous in their work. Put differently, digital

labor platforms create tensions between the ‘market logic’ – which holds that gig workers as the

smallest of small businesses should be free to compete on price and/or service offerings – and the

‘corporation logic’ which reinforces that gig workers need to be controlled to create network

effects and scale up the platform (Frenken et al., 2020; Meijerink et al., 2021). Meijerink et al.

(2021) show that service employees of digital labor platforms are aware of this complexity and

feel the need to walk a tightrope between controlling gig workers and allowing gig workers

sufficient autonomy. Service employees such as dispatchers and engagement managers are

responsible for supporting gig workers and fostering their commitment, which could easily be

perceived as the exertion of managerial control over them. This creates challenges for the HRM

activities of service employees, which need to be geared towards addressing the institutional

complexity associated with the management of gig workers by those service employees.

Finally, the algorithmic HR management used by digital labor platforms to automate

decision-making can have negative implications for both gig workers and service employees.

HRM algorithms risk dehumanizing workers through limiting their personal integrity (Leicht-

Deobald et al., 2019), human dignity (Lamers, 2020), and possibilities for having a virtuous

(working) life (Gal, Jensen, & Stein, 2020), while platform business models generally undermine

workers’ rights to exercise voice and mobilize collectively (Tassinari & Maccarrone, 2020;
 40

Gegenhuber, Ellmer, & Schüßler, 2020). For instance, digital labor platforms may require service

employees to take a hands-off approach when making decisions that impact gig workers to allow

self-learning algorithms to adjust to gig worker behaviors. In fact, research has shown that service

employees are responsible for generating training data needed to fuel artificial intelligence

applications that digital platforms operate (Sriraman, Bragg, & Kulkarni, 2017). This raises the

question of whether service employees of digital labor platforms feel disempowered or at risk of

becoming obsolete, and how HRM actors in platform firms should respond.

Even when service employees do interact with gig workers, such interactions primarily

take place via online chat applications (Newlands, 2020). Research shows that these types of

technology-based mediations can create dehumanized decision making (Prassl, 2018), due to

increased psychological and social distance (Lee, Fruchter, & Dabbish, 2015b). The lack of face-

to-face direct contact between service employees and gig workers, in combination with automated

decision-making and decision-execution by software algorithms, could result in a situation where

gig workers are objectified (Gal et al., 2020). An important challenge for HRM actors in digital

labor platforms may be the need to avoid, or mitigate, practices that implicitly or explicitly require

service employees to treat gig workers as mere instruments.

HRM-related opportunities for (HR) managers of digital labor platforms

Besides presenting HRM-related challenges, the features of digital labor platforms also provide

opportunities to their (HR) managers and service employees. In addition to exploiting their

visibility as innovative “disrupters” to help attract capable service employees, we see two other

opportunities.
 41

First, as IT-driven organizations that are ‘born digitally’, digital labor platforms are in a

unique position to advance HR analytics processes. HR analytics refers to any “HR practice

enabled by information technology that uses descriptive, visual, and statistical analysis of data

related to HR processes, human capital, organizational performance, and external economic

benchmarks to establish business impact and enable data-driven decision making” (Marler &

Boudreau, 2017: 15). Research shows that, in practice, HR analytics often does not go beyond

making data-driven predictions that augment human managers decision-making on HR-related

issues (Cheng & Hackett, 2021). Managers within digital labor platform firms are well-positioned

to advance HR analytics into processes that use information technology to automate HR-related

decision making. As noted by Raisch and Krakowski (2021), human decision-making is based on

assumptions which may be incomplete or not evident, requiring a balance between the use of HR

analytics for augmenting and automating (human) decision making. Here, managers in digital

labor platforms can turn to service employees who are responsible for the design of software

algorithms for learning how to improve HR decision-making. In doing so, however, it is important

that HR analytics involve decision making by human and algorithmic managers to avoid an

exclusive push towards automated decision-making that creates the risk of dehumanizing workers

(Gal et al., 2020; Lamers, 2020; Leicht-Deobald et al., 2019).

Second, in their role as people management specialists, HR managers within digital labor

platform firms have the opportunity to address some of the HR-related challenges discussed

earlier. Provided that (HR) managers signal desired behaviors through their HRM activities

(Bowen & Ostroff, 2004), they are in a good position to set the right example to ensure service

employees treat gig workers with respect and dignity. This is not to say there is no risk that HR

specialists would adopt a business partner role catering to the needs of venture capitalists, platform
 42

owners, and platform executives at the expense of workers’ interests (see Francis & Keegan, 2006,

for a discussion). Legge (1978) showed how HR specialists can make labor processes more

humane by adopting the ‘deviant innovator’ role to champion HR processes driven by social values

rather than mere financial and economic criteria. Doing so, however, requires HR specialists

employed by digital labor platform firms to establish credibility and gain power to influence

decision-making processes.

ORGANIZATIONS SOURCING LABOR BY ESTABLISHING THEIR OWN SPIN-OFF

PLATFORMS

Previous sections have addressed HRM challenges and opportunities when organizations and their

personnel make use of digital labor platforms operated by other firms, and those within the

platform firms themselves. In this section, we examine the opportunities and challenges presented

by traditional organizations establishing their own digital labor platform. To do this, we need to

distinguish between varieties of platform workers.

Varieties of platform workers

A rough distinction can be made between high skilled independent professional workers with

relatively scarce skills and qualifications and workers who operate in sectors of the economy where

there are low barriers to entry in terms of required skills and qualifications, e.g. day laborers,

pieceworkers, and “insta-serfs” (Kuhn & Maleki, 2017:183). Firms may establish platforms for

workers performing piecework, including fully online microtasks such as, for example,

Microsoft’s UHRS (Gray & Suri, 2019). Like the more familiar types of gig workers discussed

earlier, these gig workers are not employees but neither are they fully independent; rather they are
 43

controlled or at least “quasi-managed” by the platform (Kuhn & Maleki, 2017: 184) through the

use of algorithm management practices (Duggan et al., 2020), reputation-based ratings (Rosenblat

& Stark, 2016) and discipline through deactivation (Meijerink & Keegan, 2019). The

establishment of such platforms by organizations to lower labor costs and increase organizational

flexibility by hiring non-core workers for short-term gigs and micro-tasks may have real or

perceived negative implications for incumbent employees who fear their position will be weakened

by the availability of global pools of crowdworkers (Wood, Graham, Lehdonvirta, & Hjorth,

2019b) or large local pools of app-workers (Duggan et al., 2020).

Another category of freelancers that organizations use to augment their workforce, and for

which they could establish their own platform, is iPros (Leighton & Brown, 2013) or the solo self-

employed (Burke & Cowling, 2020). Examples of such platforms currently operating include EY’s

GigNow and PwC Talent Exchange (FT.Com, 2020). The freelance gig workers targeted by these

platforms are described in the literature as promoting “innovation-driven economic performance

through entrepreneurship” and who “fulfill managerial, technical and professional tasks” (Burke

& Cowling, 2015: 7). This category of freelancers is generally highly skilled and includes those

working in a range of occupations from consultants to trainers, project managers, cybersecurity

experts, software engineers, and creative workers. The numbers of such workers are growing

globally. Research suggests these highly paid independent professionals largely voluntarily adopt

an independent status in terms of employment (Leighton & McKeown, 2015) and value autonomy

over their work.

As the heterogeneity of the freelance/contractor labor pool becomes increasingly visible,

there are more challenges to blanket assumptions that the use of contract workers is always related

to trying to reduce labor costs. Terms like iPro, solo self-employed, and independent professional
 44

indicate organizations are augmenting their workforce with skilled and valued freelancers,

encouraging deeper questioning about what kinds of workers are pivotal for organizations

(Boudreau & Ramstad, 2005). Many freelance knowledge workers nurture and seek to protect their

independent professional status and autonomy over their work, and are highly paid and

independent by choice (Leighton & McKeown, 2015). Research by Burke and Cowling (2020:

389) suggests that the “freelance solo self-employed have played a transformative role in

economies over the last two decades” and that project-based organizations are highly reliant on

such independent contractors (Keegan, Huemann, & Turner, 2012).

Organizations have various options for establishing their own labor platform to augment

their regular staff workforce, including establishing a “greenfield” platform. EY’s GigNow

platform and PwC’s Talent Exchange (FT.Com, 2020) allow these organizations to attract

independent professionals to work on their own internal projects, or to match gig workers with

projects of clients or partners. Access to the projects of the focal company that manages the

platform, as well as access to their clients’ projects, is likely to be attractive and efficient for

independent professional gig workers and to clients who benefit from the brand name of a firm

like PwC. In addition, establishing their own platforms to attract gig workers may present learning

opportunities for organizations with respect to managing their own “employed” workforce. It is

perhaps a short step for organizations who are successful with their own platform for gig workers

to use the platform to connect regular employees on contracts of service with clients’ projects.

Organizations may find opportunities to use the platform to cope with periods when their

employees are on the bench (Keegan et al., 2012) and clients struggle to staff their own projects.

Alternatively, an organization can acquire an existing platform to augment a particular

aspect of its labor needs. In 2017 Ikea acquired the nine year old start-up TaskRabbit in a deal that
 45

afforded Ikea more access to customers’ homes, and which will provide the firm with greater

insight into how customers use Ikea products and into the services or additional products they may

value, all via the work and data generated by Taskers operating as freelance gig workers on the

Ikea-owned platform (Morgan, 2017).

The ambiguities associated with platform labor, and distinguishing good from bad gigs

(Wood et al. 2019a), make it all the more important that organizations engage critically with

decisions regarding the types of work they outsource to platforms, and also with the potential

controversies that arise when they establish their own platforms either from scratch or through

acquisitions and takeovers. Bearing in mind the growing prevalence of freelance work, as well as

the broad distinction between different kinds of freelance workers premised on their degree of

genuine independence, what challenges and opportunities does the establishment of an

organization’s own spin-off platform for an augmented workforce present for HRM professionals?

HRM-related challenges for (HR) managers of businesses with a spin-off platform

We discuss three key challenges for HRM practitioners of organizations establishing their own

platforms. First, spin-off platforms put the legitimacy of the organization at risk based on scrutiny

of contractor designation. Here, digital labor platforms pose challenges to the mainly binary

definitions of employees versus contractors. Particularly for micro-taskers and app workers,

ambiguity persists regarding their status (Aloisi, 2015). At the time of this writing, major

legislative challenges to gig worker status in some countries continue to put into question whether

workers hired by platforms enjoy the independence that should go with genuine self-employment.

As discussed above, the authenticity of freelancing in the context of digital labor platforms is often

ambiguous, and implications for worker well-being and protection are controversial (Kuhn &
 46

Maleki, 2017). A challenge to HRM practitioners in organizations experimenting with their own

platform as a route to workforce augmentation is to ensure this ambiguity does not undermine their

legitimacy and invite inspections or censure from important stakeholders (Lewis, Cardy, & Huang,

2019). Concerns about companies falsely declaring workers as self-employed, and then using webs

of sub-contracting relations to obscure who is responsible for legally mandated labor protections,

are not new (Weil, 2014) but they are growing in the light of digital labor platform growth and the

additional confusion this creates for designating workers (Aloisi, 2015). The reputation and

legitimacy of an organization and its employer brand may be threatened if employment through

platforms is perceived as a way for companies to avoid their social responsibilities towards

workers (Wood et al., 2019a). This may be particularly the case when organizations establish their

own platforms to supplement their workforce with low-skilled workers, thus externalizing social

and economic risks of employment (Prassl, 2018). Public policy, popular media, and worker

representatives’ responses, may increase scrutiny regarding contracting through platforms which

could put pressure on companies using platforms to defend their appropriate designation of

workers (Gray & Suri, 2019).

This presents challenges to HRM practitioners providing advice on whether their

organization should establish or acquire their own digital labor platform. It is likely that

organizations may escape criticism only when analysis of actual work processes indicates that

individuals on the spin-off platform really are working under service contracts that enable them to

set their own terms and make decisions regarding whether work can be further sub-contracted by

them. The ambiguity prevailing in current digital labor platform markets regarding the correct legal

classification of workers would potentially attract even more scrutiny for organizations hiring

workers through their own platforms (Meijerink et al., 2021). HRM practitioners whose
 47

professional identities are linked at least partially with compliance expertise may resist working

with an in-house platform that uses algorithmic management to control low-wage workers, such

as those currently prevailing in major platforms (e.g. Uber) and which are subject to ongoing

controversy. Working with highly skilled workers, whose autonomy is more easily established

based on an analysis of their actual work practices, is likely to present fewer challenges to HRM

professionals regarding the appropriateness and legitimacy of their classification as non-

employees. Even for gig workers whose authentic self-employment is readily apparent, such as

iPros (Leighton & Brown, 2013), HRM professionals will still need to carefully advise on digital

platform model issues and care in communicating and managing/collaborating with these

individuals will be required.

Second, a related challenge for HRM practitioners is that the establishment of a digital

labor platform for one type of worker, such as iPros, has affordances which may make the spread

of the model difficult to control, including to contracting with other types of workers where claims

of genuine independence may be difficult to defend. As business units and managers observe the

positive aspects of platformization (e.g., efficiency and cost effectiveness of using an in-house

digital labor platform), they may lobby for the extension of the platform model to the use of gig

workers whose classification status is more questionable. The temptation to grow the model could

have knock-on effects. As a corollary, Weil (2014) traces how contracting by large integrated firms

may have started with workers designated as non-core, but “over time, outsourcing spread to

activities such as janitorial and facilities maintenance and security. Later, it went deeper, spreading

into employment activities that could be regarded as core to the company’s core competency”

(Weil, 2019: 148). A challenge for HRM practitioners is therefore to advise their organizations on

the legal complexities associated with setting up and running a digital labor platform. Other
 48

challenges to consider include controversies over the use of platforms for particular segments of

contractors, over algorithmic management and worker well-being (Rosenblat, 2019; Rosenblat &

Stark, 2016), and over the use of data gathered by platforms when managing workers (Van Doorn

& Badger, 2020). HRM practitioners must ensure the model is not applied where it is in breach of

legislation and potentially in breach of social norms for employment protection.

Finally, HRM practitioners whose organizations enact a spin-off labor platform should aid

in messaging the announcement and implementation in order to mitigate any risks of demotivation

and disaffection among regular employees. Conventional SHRM views of contingent workers as

constituting low strategic value (Lepak & Snell, 1999) may mean internal employees are cautious

about the growing use of contractors and attribute platformization decisions to cost-cutting. This

could threaten standard employees’ perceived job and wage security, leading to lower motivation

and organizational commitment. A challenge for HRM practitioners will be to communicate

clearly that freelancers hired through the platform are intended to have symbiotic or

complementary relationships with employees (Burke & Cowling, 2015), not to compete with them,

threaten their security, or depress their wages. Developing or acquiring an in-house labor platform

will require appropriate communication with both internal and external stakeholders in order to

avoid undermining legitimacy.

Employees may also question whether extra-role service and organizational citizenship

behaviors will be fairly distributed in a team when non-employee workers are hired through the

organization’s own platform. Furthermore, platformization is likely to add to the tensions

experienced by employees and managers in polyadic HRM systems (Burke & Cowling, 2015;

Keegan & Den Hartog, 2019) where leader-member exchange relationships and social exchange

processes, as well as perceptions of equity and fairness, are made more complex by shifting and
 49

relatively unstable patterns of authority and leadership. HRM practitioners will be challenged to

consider how processes of performance management, appraisal, and reward will be influenced by

augmenting the workforce via an in-house platform. How, for example, will performance

evaluation as implemented by an in-house labor platform for gig workers (potentially based on

ratings provided by employees or algorithms) co-exist with, or possibly alter, the appraisal and

reward systems applied to regular employees? Employees’ perceptions of these developments will

be important for HRM practitioners to anticipate and understand.

HRM-related opportunities for (HR) managers of businesses with a spin-off platform

We see three main opportunities for HRM practitioners in organizations that establish their own

spin-off platform. First, digital platform technologies can reduce the costs for contractors and

organizations to find each other and achieve a successful match (Duggan et al., 2020). This

opportunity applies whether freelancers are truly independent entrepreneurs of the iPro ideal type

(Leighton & Brown, 2013) or else workers whose status is more ambiguous (Kuhn & Maleki,

2017). In cases of organizations establishing their own platform to contract with consultants,

project managers, and other skilled professionals, an organization may also allow clients to use its

platform technology to augment their projects. This may be an opportunity for HRM practitioners

to build client loyalty to the organization. It also facilitates network effects (Lin & Lu, 2011;

Meijerink & Keegan, 2019) where attracting more freelancers makes the platform more valuable

to both clients and freelancers as well as to the organization itself. HRM professionals can draw

on their specific experience in employee branding and strategic workforce management to advise

platform users within the organization on how to brand and advertise “gigs” consistent with the

organization’s values and strategic goals, as well as how to invite clients to use the platform when
 50

the organization cannot supply all the expertise needed by a client with its regular employees.

Facilitating effective brand-consistent matches between the organization, and its clients and

contractors, may motivate and incentivize (more) contractors to use the platform (more often),

yielding more value for all participants of the ecosystem.

Second, as stated earlier, establishing a spin-off platform or acquiring an existing platform,

can help an organization to cut down on the costs of finding contractors, given the higher costs

associated with using commercial third parties like agencies to procure project personnel and

skilled independent contractors. A platform would also allow an organization to leverage and add

value to existing relationships with contractors, and to minimize risks associated with losing

contractors, because of diffuse information based on bilateral arrangements used by procurement

managers. The HRM approach adopted for own employees is usually kept apart from that adopted

for managing external contractors (Keegan et al., 2012; McKeown & Pichault, 2020). The result

of separate HRM processes and contractor procurement processes currently governing contractor

hiring in many project-based organizations creates distance between HRM and project contractors

(Keegan & Den Hartog, 2019). Platformization of existing procurement processes represents a

strategic opportunity for HRM practitioners to integrate and align disjointed workforce

augmentation and employee management processes.

Finally, establishing a digital labor platform to replace bilateral contracting between an

organization and freelancers has potential to yield valuable data to assist in more strategic

management and oversight of non-employee workers, and possibly even of employees. Digitally

mediated transactions through platforms provide a centralized repository of data on terms and

conditions, performance against key metrics, and selection process efficacy, and as well as general

information on workforce augmentation trends. This data gathered by platforms may provide
 51

considerable value and is generally asymmetric to the advantage of the platform owner compared

to each contractor (van Doorn & Badger, 2020). There is an opportunity for HRM practitioners to

provide better oversight of workforce augmentation when the organization owns the platform, and

therefore the data generated. Aggregated data may present valuable insights and the use of machine

learning and AI to allocate work across multiple projects may improve the efficiency of these

processes. In addition to the overt services provided by gig workers that enhance customer

experience, acquiring digital labor platforms in deals like the Ikea purchase of TaskRabbit

(Morgan, 2017) may offer even greater organizational benefits from the intelligence the gig

workers gain during their distributed interactions with clients, intelligence which can be

aggregated and made valuable by the platform owner. Finally, the use of platform-enabled

contractor rating and reputation systems could overcome some of the performance management

difficulties found in polyadic HRM systems (Keegan & Den Hartog, 2019), where shifting

configurations of relatively unstable leader-follower dyads and mixed project teams undermines

conventional performance management processes.

KNOWLEDGE GAPS AND FUTURE RESEARCH NEEDS

Although technological advances and widespread internet availability have disrupted staffing as

they have other business functions, until recently the digital labor platform phenomenon attracted

relatively little attention from HRM scholars (Ashford et al., 2018; Kuhn, 2016). Research from

an HRM perspective can help develop a broader and more integrated understanding of how digital

labor platforms are affecting businesses, workforces, and the economy. But to date there is

surprisingly little available research regarding the strategic and operational decisions firms are
 52

making regarding gig workers. We identify knowledge gaps where research is most needed with

respect to the key characteristics of the gig economy context.

As discussed in the introduction, “HRM without employment,” or the status of gig workers

as non-employees, distinguishes gig labor from other forms of non-standard employment

arrangements. When and why do firms opt to source labor needs via digital labor platforms rather

than more traditional methods such as temporary agencies or by hiring former employees as

independent contractors? While we have sketched some of the possible tradeoffs regarding wages,

institutional trust, and transaction costs, systematic empirical research on these factors is needed.

In addition, it is important to understand what types of knowledge tasks are more or less suitable

for outsourcing to digital labor platforms (Hasija et al., 2020). To date there is limited empirical

data detailing whether and how firms are making these choices among tasks and projects, as well

as how they evaluate project performance (other than the reputation feedback provided to the

platform, which may be unreliable) and the performance of their overall sourcing process.

Perhaps most critical is the need to understand how regular staff employees respond to the

use of gig workers. Research on this question that compares the use of gig workers sourced from

external platforms to those sourced from internal spin-off platforms may be especially useful both

for theoretical and practical reasons. Regular full-time employees may potentially be more

threatened by the latter, although it is also possible to theorize benefits such as greater trust if

employees perceive that freelance workers sourced from an internal platform are properly vetted

and well-treated by the firm. Related to this issue is the broader strategy question of understanding

why, and which, organizations establish spin-off digital labor platforms, and the specific costs and

benefits of doing so.

 53

The “HRM without employment” model means that digital labor platform firms must

ensure that gig workers can be considered independent (or independent enough) under relevant

regulatory frameworks. Thus a critical question for platform firms is to understand how their

service employees balance the need to afford gig workers autonomy while still directing their

behavior to best serve the operational needs of the client base. This may be an especially

challenging question with regard to accessing relevant data, but it is a crucial question for the

continued survival of the labor platform business model.

Control in digital labor platforms is largely based on algorithmic management. Duggan et

al. (2020) have recently proposed an agenda for research needs on algorithmic management in

labor platforms, but algorithmic technologies are increasingly widely implemented to control

regular employees as well (Kellogg et al., 2020). Thus research in this topic has broad implications

for the future of work more generally. In particular, more research is needed on the extent to which

algorithmic processes help firms make better decisions regarding which gig workers to hire, which

may also have relevance to any transitions from freelance status to regular staff. Bucher, Schou,

and Waldkirch (2021) discuss how gig workers on one platform engage in anticipatory compliance

to “pacify the algorithm,” but we know little about how the platform employees tasked with

developing and refining the algorithms respond to these worker behaviors, or how they respond to

workers’ active resistance to algorithmic control (Kellogg et al., 2020). Longitudinal research on

changes in algorithmic HRM over time would be essential to fully grasp the complexities of this

tension.

Of particular importance to HRM as a field is research on the role human managers play

in the application of algorithmic control. Because algorithms automate so much of the HRM

decision making process, reducing the need for managers and HR staff, research demonstrating
 54

the value humans add to the process is especially needed. From a strategic perspective, it is possible

that the HRM algorithms implemented by in-house digital labor platforms are more humane (and

perhaps more sustainable over the long term) than those adopted by competitive platforms driven

purely by market-share and profit motives, and so comparative research along these lines could be

very impactful.

One of the most intriguing, and to date most understudied, gig economy research topics is

the effect of dispersed HRM functions. Although HRM functions and responsibilities for regular

staff in traditional organizations are sometimes distributed across multiple actors, and temporary

workers and consultants often must meet expectations of two firms (e.g., Dawson, Karahanna, &

Buchholtz, 2014), digital labor platforms represent perhaps the most extreme example of HRM

function dispersion. When firms hire individual gig workers from an external labor platform, that

worker may be trained and evaluated by multiple clients, as well as by the platform firm and its

algorithms, and they may also be receiving support and mentoring from their peers on the platform.

The extent to which client firms are willing to provide HRM functions to gig workers, and the

extent to which service employees at digital labor platforms provide any coordination of dispersed

functions, and the costs and benefits of doing so, are important research questions. Again, it would

be particularly useful to compare the effects of this dispersion between open digital labor platforms

and internal labor platforms.

BARRIERS AND PATHWAYS FOR CONDUCTING RESEARCH ON

ORGANIZATIONAL HR DECISION MAKERS AND DIGITAL LABOR PLATFORMS

Barriers
 55

While there are many compelling questions regarding the intersections between organizational

decision makers and digital labor platforms, conducting research to answer these questions will

not necessarily be easy. Barriers include siloed academic domains, difficulties identifying the

population of platform workers, and difficulties accessing research participants. We discuss each

of these in turn.

As noted above, much of the research on the digital labor phenomenon has been siloed

across distinct academic disciplines, which do not even share a common vocabulary for discussing

these platforms or these workers (Kuhn & Maleki, 2017). To date, most HR researchers have

shown reluctance to genuinely embrace non-traditional employment arrangements as central

concerns, let alone embrace digital labor platforms, in the body of HR knowledge (Kinnie & Swart,

2020). In large part, HR theory and research still rests on assumptions of traditional employment

relationships and traditional business models (Meijerink & Keegan, 2019; Minbaeva, 2020). As

noted earlier, there is a growing body of work based on individual gig workers’ experiences and

outcomes (Prassl, 2018; Rosenblat, 2019). However, organizational level HR research (Wright &

Boswell, 2002) on gig workers, HR decision-making, HR practices, and HR policies (whether

individual or bundled) is largely unknown. The unique challenges of platform work for HR

decision makers are simply not well represented in mainstream HRM journals. Conversely, a

healthy body of literature on platform workers continues to grow in sociology, information

systems, economics, law, and labor relations journals (Aloisi, 2015; Jarrahi & Sutherland, 2018;

Lehdonvirta et al., 2019; Wood et al., 2019a;). These research streams, however, do not examine

HR practitioners, their roles in dealing with gig workers, nor associated implications for workers

and other stakeholders. This lack is worthy of attention as more freelance work is funneled through

both through independent platforms and spin-off platforms established by organizations. For
 56

example, while sociology researchers offer keen insights into algorithmic management, a

consideration of how HR practitioners augment their HR-related decision-making regarding

platform workers with algorithmic management could advance knowledge in HR as well as in the

sociology of work and labor process theory (Minbaeva, 2020).

Another barrier for researchers studying HRM in the context of the gig economy is

confusion regarding the size and exact contours of the platform worker population. Data on the

extent of digital platform work is patchy and incomplete in most economies, and there has been

controversy regarding the size of the gig economy in recent years (e.g., Zumbrun, 2019). Knowing

whether individual workers are registered on multiple platforms, whether accounts are active or

inactive, and how intensely they work for platforms (Abraham et al., 2018; Kuhn & Galloway,

2019; Spreitzer et al., 2017; Wallenstein et al., 2019) may all pose difficulties for researchers

studying HRM in the context of digital platform work. In addition, skepticism about the overall

size of the gig economy contributes to doubts about the importance of this issue for HRM theory

and practice.

Another barrier to research on intersections between organizational HRM decision-making

and digital platform work is gaining access to platform workers and to the organizational actors

who make decisions affecting them. Workers on some platforms may be reluctant to engage in

interviews or surveys, and many Amazon Mechanical Turk workers already have negative views

of academic research. Platform decision makers may discourage worker participation in research

because it may be misinterpreted as “work.” The Arise labor platform, discussed above, that

provides customer service representatives to corporate clients has faced legal challenges in the past

regarding worker classification, and requires workers to sign non-disclosure agreements

(Armstrong et al., 2020). Given the ongoing debates in many countries regarding the classification
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and treatment of gig workers, many digital labor platforms may similarly discourage service

employees and other organizational decision makers from participating in interviews.

The lack of formal employment relationships between platform workers, the platform firm,

and client organizations generally places them outside of many traditional processes whereby

HRM scholars seek academic research participants. Participants are often recruited on the basis of

existing relationships with key managerial/organizational actors, such as HRM personnel or trade

union representatives, who provide access to employees. Colleagues working with organizations

also offer a conduit, often through snowball sampling and involving some level of social exchange

or reciprocity dynamics. It is more difficult to use snow-ball sampling to reach a diffuse body of

app-workers or crowdworkers for interviews, or to distribute surveys to hundreds or thousands of

crowdworkers, without the support of key individuals with decision-making authority to make

such connections.

Pathways

Notwithstanding these barriers, we see several promising pathways through which research can be

advanced, including developing (technological) creativity in accessing data on platform workers,

and by leveraging existing networks of non-standard workers. Novel and creative research

methods require engaging ethically with informants, which is critically important in all cases but

particularly so for gig workers experiencing what Rosenblat (2019: 3) describes as “[a] shaky and

insecure culture of precarious work”. Protecting the data and identities of gig workers is of

paramount importance, particularly as “migrants constitute a large and growing section of the

urban gig economy workforce” (Van Doorn, Ferrari, & Graham, 2020: 3) and often suffer extreme

precarity in their work and relationships with platforms.

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Wood et al. (2019a) recruited informants by posting hidden tasks on digital labor platforms.

Given that online digital platform workers on sites like Amazon’s Mechanical Turk (Keith, Harms,

& Tay, 2019) are often paid to act as research subjects, Wood et al. (2019a) made extensive efforts

to develop trust and ensure respondents knew they were voluntarily participating in a research

interview rather than simply performing a paid task; they reimbursed transport expenses and also

gave informants cash compensation as a token of gratitude. Their study reinforces the importance

of informed consent and ethical treatment when studying gig workers, as well as the need to protect

their identities and reputations.

Although the phenomenon of digital labor platform work is relatively new, networks of

non-standard workers, including iPros and freelance professional workers, are often of long

standing (Leighton & Brown, 2013) and sometimes very well established (Burke & Cowling,

2015, 2020). Moreover, labor unions and worker representative bodies are increasingly active in

attempting to organize gig workers. A notable example here is Worker Info Exchange, a non-profit

organization that helps gig workers access the personal data (as guaranteed by Article 20 of the

European Union General Data Protection Regulation) that digital labor platforms have collected

on them. Researchers interested in how digital labor platforms impact the work of HRM decision-

makers may be able to leverage existing networks and new collectives of gig workers to study how

workers use platforms, and the HRM-related challenges they face while interfacing with platform

firms and client organizations. The time may be ripe to study not just new entrants to gig work,

but to also track changes in how experienced professionals navigate organizations that are slowly

relinquishing the traditional distinctions between employees and non-employees, using new types

of talent strategies. While long excluded from mainstream HRM analysis, and even HRM
 59

practitioner approaches to talent management (McKeown & Pichault, 2020), non-standard workers

are becoming more important to HRM than ever.

In a similar way, the overlap between online digital labor platforms and migrant workers

is significant, particularly in urban app-based gig work (Van Doorn et al., 2020). Existing research

on migrant workers, and the established networks of those who advocate for them, may inform

HRM professionals about challenges and opportunities associated with outsourcing service labor

to platform workers. HRM researchers may also be able to benefit from collaborating with migrant

labor researchers and with related advocacy organizations who can connect them to migrant gig

workers.

Empirical data collected from the individual consumers and organizations that source labor

through digital labor platforms can also provide insight to HRM researchers. The clients or

“requesters” of gig workers’ services often bear HRM responsibilities such as evaluating their

performance, determining their compensation, providing training, or even co-designing jobs

(Gandini, 2019; Jarrahi & Sutherland, 2019; Meijerink et al., 2021; Veen et al., 2019). Meijerink

and Schoenmakers (2020) surveyed platform consumers to test hypotheses regarding the

conditions under which they were willing to appraise worker performance. Smith, Goods, Barratt,

and Veen (2020) surveyed consumers to explore their willingness to pay to ensure ‘gig’ workers

receive equivalent minimum entitlements, and also experimentally tested whether an awareness-

raising treatment influenced their moral consumption behaviors. In order to examine some

important research questions, however, researchers will need to establish relationships with HR

practitioners or managers in firms that source contingent labor via external digital labor platforms

or through their own spin-off platform.

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Finally, we see possibilities for HRM researchers to extend the repertoire of methodologies

and data collection techniques beyond those traditionally applied in HRM research. Bleijenbergh,

Van Mierlo, and Bondarouk (2020: 3) have advocated action research in HRM, i.e. a “participatory

research strategy consisting of cycles of stages in which scholars and practitioners collaborate

using academic literature and research methods in both solving actual organisational problems and

advancing scholarly knowledge”. In a gig economy context, HRM researchers may engage in

action research by setting up their own digital labor platform (with practitioner co-founders),

collaborating with external start-up platforms, or by supporting their academic institution in

sourcing labor through a digital labor platform in order to both gain new theoretical insights and

solve hands-on problems (e.g., limiting opacity of HRM algorithms or improving working

conditions for gig workers). Moreover, ethnographic studies may be an especially fruitful

methodology to study HRM in the gig economy. This could involve HRM researchers signing up

as a gig worker, performing gig labor, attending court hearings on reclassification law suits, and

outsourcing work through digital labor platforms. Rosenblat (2019) took hundreds of Uber rides

to study the experiences of gig workers in the ride-hailing sector. Meijerink et al. (2021) also

observed gig workers at work, which also allowed them to gain access to other sources of data.

They found ethnographic accounts complemented these other data sources, since gig workers

could not necessarily recall all details of HRM-related activities when interviewed (Meijerink et

al., 2021).

CONCLUSION

The widespread availability of the internet has disrupted staffing, along with so many other

business processes, and the digital labor platform model continues to evolve as many of its main
 61

players become increasingly embedded in daily life. At the time of this writing, the COVID-19

outbreak was attracting renewed attention to the status and outcomes of gig workers and to the

power of digital labor platforms (Hasija et al., 2020; Moulds, 2020). But for many years the digital

labor platform phenomenon generated far more interest from researchers in information systems

(Jarrahi & Sutherland, 2019; Lee et al., 2015a; Möhlmann et al., 2020; Sutherland & Jarrahi, 2018),

economics (Abraham et al., 2018; Dube et al., 2020; Horton, 2017; Pallais, 2014), and sociology

(Gandini, 2019; Rosenblat, 2019; Shapiro, 2018; Schor et al., 2019; Vallas & Schor, 2020; Van

Doorn, 2020; Veen et al., 2019; Wood et al., 2019a; Wood et al., 2019b) than from scholars trained

in human resource management and industrial/organizational psychology (Ashford et al., 2018;

Duggan et al., 2020; Kuhn, 2016; Meijerink & Keegan, 2019). Much of this literature has been

concerned with the precarity and vulnerability of gig workers, whereas others have envisioned

platforms as “marketplaces” of rational actors and as ideal test cases for economic theory (Rietveld

& Schilling, 2021).

In this work we have highlighted three unique features of the gig economy that reinforce

the importance of HRM to understanding this business model and its broader impacts on

individuals, businesses, and society. Specifically, digital labor platforms change our understanding

of HRM theory and practice by instituting HRM without employment, by their heavy use of

algorithmic management to automate HRM activities traditionally performed by human managers,

and by pluralizing the number and type of (non-traditional) HRM actors that engage with gig

workers and perform HRM activities. In these respects, the gig economy represents and reinforces

a distillation of trends that were already present in the broader labor market, such as increased

emphasis on staffing flexibility, more risk being shifted to employees (e.g., Cappelli & Keller,

2013; Lambert, 2008), the use of artificial intelligence in the workplace (Kellogg et al., 2020;
 62

Strohmeier & Piazza, 2015), and the outsourcing of managerial tasks to actors outside the

organization (Davis-Blake & Broschak, 2009; Lepak & Snell, 1998).

By reinforcing these trends, digital labor platforms present challenges and opportunities to

HR practitioners and other employees making decisions, both strategic and operational, as part of

their organizational role. In cases where client businesses rely on external digital labor platforms

to source contingent labor, risks include reduced levels of motivation among permanent

employees, incurring unnecessarily high transaction costs, or poor performance and misconduct

on the part of gig workers. At the same time, HR specialists in client businesses are well-positioned

to ensure regulatory compliance and promote dignified treatment of gig workers in order to reap

the potential benefits (e.g. labor flexibility, learning) that external digital labor platforms offer.

Labor processes within digital labor platform firms pose unique HR-related challenges and

opportunities as well. Here, HR specialists may face challenges such as massive layoffs of service

employees, the need to address institutional complexities, and ensuring the engagement of service

employees who themselves may be at risk of being replaced by algorithmic management practices.

But HR specialists in platform firms also may be able to leverage visibility to attract talented

service employees and to increase the strategic potential of HR analytics, which are afforded by

the data-driven and start-up nature that characterizes digital labor platforms.

Finally, organizations that establish their own spin-off platform need to avoid a loss of

legitimacy and negative consequences for permanent employed staff (e.g. reduced commitment

and motivation). On the other hand, spin-off labor platforms may be better able to attract and retain

independent contractors with highly specialized skills, provide higher quality service, and derive

broader labor market insights from platform-generated data. The tensions we have identified across

and within these three ways in which (HR) decision makers and digital labor platforms intersect
 63

all merit systematic research from an HR perspective which acknowledges the complexities of

different types of digital labor platforms and the wide diversity among gig workers.

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FIGURE 1

The Kaleidoscope of Human Resource Management in the Gig Economy

Labor by service employees

employed by the DLP firm

Labor process
within DLP firms

HRM in the gig economy

HRM – digital labor
HRM without Algorithmic HR platform intersections
Employment Management
Dispersed Opportunities and
HRM Function challenges for HRM

Social
legitimacy

Institutional
Attractiveness
complexity

Note: DLP = digital labor platform; HRM = human resource management