The gig economy can be described as a market where individuals earn by providing on-demand work and services. True, contract and short-term work have always existed but technology has elevated the gig economy to an exciting new level. And much as everyone would like to put the pandemic behind them, it cannot be denied that it was the pandemic that brought the gig economy to the limelight. Today, both organisations and individuals recognise the potential of the gig economy.
The gig economy expanded by 30% during the pandemic. It is expected to exceed the full-time workforce by 2027. The wave of resignations that hit the global market in 2021 offered gig workers the perfect conditions to make their mark. As organisations continue to battle inflation and labour and skills shortages, it is the gig economy that is showing promise. In fact, industry reports state that gig work will generate an estimated $455 billion in 2023, a steep jump of 53% over 2020 numbers. The number of gig workers in 2018 was approximately 43 million and that number is expected to reach 78 million in 2023. Going forward, the global freelancing market is expected to increase at a CAGR of 15% until 2026.
The growth of the gig economy is driven by a combination of many factors. The rapid advances in technology combined with the increased availability of digital infrastructure such as marketplaces and platforms that facilitate gig work, the growing demand for flexible work conditions and rapid changes in consumer behaviour are all key examples.
Further, organisations need to remain adaptable and agile in order to stay abreast of changing business scenarios. Accepting and accommodating gig workers is an unavoidable step in the right direction.
Sure enough, global industry reports show that almost 33% of organisations use external vendors for IT, 15% each for marketing and R&D, and 25% for operations. Almost 75% of executives surveyed opined that gig workers are invaluable when looking for hard-to-find skills. A large percentage of executives agreed that gig workers help organisations economise on office overheads and employee benefits. Almost 60% of business leaders prefer to keep their permanent staff small and use the expertise of outsiders for as many tasks as possible.
Gig work usually offers a flexibility that is difficult to find in full-time positions. This attracts a large number of people seeking supplemental income. Gig workers can be loosely divided into four types:
The gig economy offers benefits to both organisations and individuals. The boom in the sector has prompted many organisations to modify their employment strategies to accommodate gig workers.
It cannot be denied that the gig economy is not all smooth sailing. There are challenges that need to be managed.
Gig workers so far are rarely extended the same benefits that are provided to full-time workers. Health benefits, educational opportunities and paid leave are just some of the benefits that might attract gig workers to an organisation. Going forward, as the gig economy becomes more prevalent, organisations are expected to offer full-time benefits to gig workers too. While the benefits may be based on an individual’s work hours, they would still be an attractive offering and help retain gig workers for longer periods of time.
Depending on the individual’s skills, gig work may lack job security or proper contracts. Incomes are not predictable since most work is project-based. Gig work is frequently isolating, especially if individuals work remotely. Prolonged isolation can affect the mental and emotional condition of an individual.
Significant challenges posed by the gig economy for employers include a loss of knowledge and the possibility of intellectual property theft whenever an independent worker leaves. To protect intellectual property, organisations must have enough security measures in place, such as robust data privacy laws and knowledge about intellectual property rights.
In an effort to improve the working conditions of gig workers, the European Commission, in December 2021, proposed legislation to improve the work conditions of gig workers that fell under certain brackets. Some of the expected benefits could include safety measures and insurance payouts against workplace accidents, healthcare, unemployment benefits, old-age pensions, and minimum salaries. By 2027, organisations are expected to spend $6 billion on enhancing the rights of independent workers.
The gig economy is undeniably changing the employment landscape, offering both opportunities and challenges for both workers and organisations. As organisations navigate the future of work, it's crucial to strike a balance that supports worker rights, fosters innovation and adapts to evolving economic trends.
Organisations must continue to embrace flexibility and technology while also recognising their responsibilities to workers. Governments and policymakers must work to create a regulatory framework that protects gig workers without stifling the entrepreneurial spirit of the gig economy.
Finding the right talent on demand for short-term projects is still not an easy task. Careernet can help find the right talent at the right time. FlexiStints is Careernet’s professional staffing solution that offers services for specialised talent for short-term engagements. Their professional staffing offerings can be customised as per client needs.
Careernet maintains a network of specialised talent with a variety of skills that can be engaged by clients as and when required. Their experience in the sector enables them to help clients at scale and at a quick pace. Careernet’s comprehensive gig staffing service includes identification of resources, handling payouts and ensuring complete compliance.
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