The Rise of the Gig Economy

The Rise of the Gig Economy – How is it changing the way we work?

Today’s society lends itself to more remote, part time and gig workers than ever before. Having the flexibility offered by gig workers allows a business to take on large scale projects without fear of tasks going uncompleted. The key to utilizing the power of the gig economy is finding individuals with unique and useful skill sets.

How Does “Gig Work” Work?

No matter what industry a gig worker is in, the gig economy consists of small tasks that the worker completes. These tasks can be anything from getting groceries to writing code. A gig worker can opt to work for a set amount of hours (like choosing a shift) or work by the project. Once the task or shift is complete, the worker moves on to the next gig. That might be another task with the same company, or something entirely different with another company.

Here are a number of aspects that characterize a gig economy:

  • Individual gigs are a small portion of total income
  • Contractors find work via technology
  • Workers operate as independent contractors
  • Contractors are responsible for their own benefits

In most cases, the shifts or projects are flexible. A gig worker might have a day job where they work a traditional 9-to-5 job, and then a second “gig job” from 5-to-9 at night. Or, a gig worker might work multiple “gigs” to create a full-time job, but on a flexible or alternative schedule.

Those who work within the gig economy operate as independent contractors. This means they set a rate for their services and their clients pay them based on the agreed-upon rate. Many companies that utilize gig workers—Uber, Instacart, TaskRabbit, MechanicalTurk—do not employ the gig worker. The company is merely the “connector,” bringing contractors and clients together.

What are the Pros?

Here are a variety of reasons why the gig economy is appealing for people today:

  • Provides flexibility
  • Supplements income
  • Builds resume
  • Offers affordable help
  • Test Drive Something New
  • Boosts the economy

Flexibility

The most obvious gig work pro is flexibility. As a gig worker, you get to choose when and where you work, which clients you take on (and which ones you don’t), and even set your rates in some situations. You can choose to work only weekends, only nights, or only one hour a week if you like.

Supplements income

Many professionals are only involved in the gig economy on a part-time basis. They may have full-time careers and then pick up gigs on the side to supplement their income, working on those freelance projects during the evening and on weekends.

Builds resume

Other professionals are using the gig economy to gain more control over their career trajectory. By taking on challenging projects outside of their job, they can build a resume that shows they have achieved great results for different organizations. Not only will this gig supplement their income, but it will also help them secure more advanced positions at a higher pay level.

Offers affordable help

The gig economy makes hiring help more affordable for companies and individuals. Because employers aren’t responsible for contributing to the cost of health coverage or retirement savings, the overall cost of hiring talented professionals is lower.

Test Drive Something New

Gig work is something some people do for additional income. But for other people, it’s a way to test-drive a new career. For example, if you love pets and have thought about becoming a pet sitter, gig work as a dog walker or pet sitter is a great way to dip your toes in the water and see how much you love—or hate—doing it.

It’s also useful when a company needs to hire a professional with a specific skill or for a specific project, but there’s no room in the budget for another full-time team member. In this case, hiring a contractor or business consultant for a shorter period of time may be well within the budget.

Boosts the Economy

The gig economy also helps the overall economy by making it possible to deliver goods and services more quickly.

What are the Cons?

Despite its benefits, there are some downsides to the gig economy. Here are few negatives of the Gig Economy:

  • Flexibility
  • Lack of Benefits
  • Inconsistent Income
  • Burnout
  • Eroding Relationships

Flexibility

Isn’t that a benefit, you may ask? For some workers, the flexibility of working gigs can actually disrupt the work-life balance, sleep patterns, and activities of daily life. Flexibility in a gig economy often means that workers have to make themselves available any time gigs come up, regardless of their other needs, and must always be on the hunt for the next gig.

Lack of Benefits

Once you’re in business for yourself, you’re in business for yourself. And that means it’s up to you to provide the benefits. As a gig worker, you likely won’t have health insurance or other benefits, either. Because they don’t work full-time for an employer, those who participate in the gig economy are responsible for saving up for and paying their own taxes, health insurance and retirement and savings accounts.

Inconsistent Income

With most gig jobs, you’re paid by the project or task. The problem is, you may not have control over how many tasks you’re able to complete in a day or a week. If no one wants a ride, needs something assembled, or wants you to deliver something, you won’t make any money.

Burnout

Working multiple jobs or at odd hours isn’t for everybody. Some people find that as flexible as the work is, gig work becomes tiring and stressful after a while.

Eroding Relationships

Lastly, because of the fluid nature of gig economy transactions and relationships, long-term relationships between workers, employers, clients, and vendors can tend to erode. This can eliminate the benefits that flow from building long-term trust, customary practice, and familiarity with clients and employers. It could also discourage investment in relationship-specific assets that would otherwise be profitable to pursue since no party has an incentive to invest significantly in a relationship that only lasts until the next gig comes along.

Life after Gig working

Our increasingly interconnected world has helped open new doors of employment. According to Fortunly, about 57 million Americans now engage in gigs. This number is predicted to further balloon as 52 percent of the US workforce is expected to become gig workers at some point by 2023.

Summary:

  • The gig economy is based on flexible, temporary, or freelance jobs, often involving connecting with clients or customers through an online platform.
  • The gig economy can benefit workers, businesses, and consumers by making work more adaptable to the needs of the moment and demand for flexible lifestyles.
  • At the same time, the gig economy can have downsides due to the erosion of traditional economic relationships between workers, businesses, and clients.

Autonomy and flexibility have made the gig economy undoubtedly attractive. Many professionals are even going full-time to have a better work-life balance. For the most part, being able to get paid based on output rather than input is a luxury not found in most jobs. 

 The key to utilizing the power of the gig economy is finding individuals with unique and useful skill sets. How will it change our workscape? What do you think about gig working and our future? Contact us and let us know!

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