Temporary and contract job opportunities are growing 12 times faster than permanent jobs for workers between the ages of 25 and 54. The trend is called the “gig economy” and is altering the way people view and perform work.
Every one of us has felt the effects of technology in everyday life. Thanks to apps like Uber Eats and GrubHub, you can never go starving. They can deliver any dish your heart wants. You can always find a quick and cheap ride to anywhere by using an app such as Lyft.
But technology has also been changing the way people perform work. Roughly 150 million workers in North America and Western Europe have joined the gig economy. It seems like employees worldwide are leaving their 9-to-5 office jobs to become part of the trending gig economy.
But what is the fuss with the gig economy and who is part of it? What are its main benefits? Let’s explore!
What does “gig” mean in the gig economy?
The term “gig” reminds many people of jazz musicians. They were the original gig workers after all. Today, the term is associated with temp contractors across all industries, including graphic design, hospitality, or engineering.
For a Lyft driver, a gig means picking up a client and driving them to their desired destination. For a software engineer on Upwork, it means programming software for a client. The services that a full-time employee would offer are the things that gig workers offer on a freelance basis.
Some of these gig workers use gigs to fund their entire income. Others have a full-time or a part-time job and work a side gig for additional income.
Freelance employees that work as independent contractors choose how much a client needs to pay for a project. However, at the same time, they don’t receive the same benefits, such as health insurance that a full-time office employee would get.
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Who is part of the gig economy?
There are three major players in the freelance economy. They include:
The gig workers.
The gig workers are independent contractors who complete a temp job. They are the opposite of traditional full-time workers who rarely change positions and focus on a lifetime career.
The companies that act as a medium.
In the middle of the gig economy are the companies that connect the gig workers with the clients. These companies are oftentimes internet-based platforms such as Upwork or Uber. For example, a freelancer can easily download an app for accounting services, create an account, and start hiring. At the same time, an accountant can create an account and start accepting job offers from clients. Temp workers also find short-term jobs through various temp agencies that connect them with companies looking for seasonal or on-project workers.
The clients.
The clients are the people who need a specific service. These services can range from engineering to marketing.
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How many gig economy workers are there?
According to Gallup, 36% of U.S. employees are in the gig economy, which amounts to nearly 57 million people. This number is predicted to grow to 43% by 2020. And 64% of gig workers say they are doing their preferred type of work.
However, this number includes everyone from online platforms such as Uber to freelancers and temporary workers who find work through temp agencies.
The Data Hub discovered that full-time gig workers make up less than 50% of all gig workers. The others have a part-time or full-time traditional work.
The popularity of gig work can be contributed to the amount of flexibility it offers to employees. They can enjoy high levels of work-life balance, autonomy, meaningful freedom, and creative freedom. Compared to traditional workers, gig workers score much higher on all these factors.
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How do you take advantage of Gig Economy?
We all know the benefits of being a gig worker. They include flexibility, the ability to work remotely, and the opportunity to select projects of interest.
But it may be companies that are really benefiting the most from the gig economy. The most notable benefits include:
Reduced costs
Unlike full-time workers, companies don’t have to pay for benefits such as health insurance or retirement pensions to independent contractors. They obtain them on their own. Moreover, there will be no costs associated with onboarding or training. In most cases, the company doesn’t even have to provide work equipment to gig workers. There’s only one type of cost and that’s the worker’s hourly or fixed-time salary.
Access to a wide pool of talent
Thanks to gig work, businesses can hire outside their zip code. The borders of their home country no longer restrict them. Now companies have a diverse pool of flexible employees at their disposal. If there’s a shortage of software developers in their area, they can hire a worker from elsewhere. On the plus side, employing a diverse workforce at your company can lead to more creativity and innovation.
Opportunity to scale quickly
Gig work can be particularly beneficial for smaller and startup companies. Many times, these companies have a limited budget and can’t afford to hire full-time employees. However, by employing freelance workers, they can quickly scale their business. There will be no need for office space, equipment, benefits, or onboarding processes. Also, locating gig talent is not challenging as there is a myriad of platforms for freelance or remote work.
Meet seasonal demand
Countless seasonal businesses often need short-term talent to meet seasonal demand. For example, during the Christmas 2017 season, Amazon had to employ 120,000 additional workers to help fill and take orders! And they weren’t the only company to do so. Many of these workers were placed through a temp agency and stayed with the company for a limited time. By hiring freelance employees, you can welcome the high season with the proper amount of resources.
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Key Takeaways
One thing is for sure: the gig economy will remain principal to the future of work. It’s an important opportunity for freelance workers to earn an additional income and enjoy a work/life balance. For companies, the benefits are equally numerous and include reduced costs, access to a pool of talent, and the opportunity to scale quickly.
Yes, significant changes are taking place in the global workforce and are only accelerating. To succeed, companies have to embrace the gig economy as soon as possible and adapt just as quickly.
