Embracing flexibility and opportunity: The gig economy and current employment trends
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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 growth 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.
Growth drivers
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.
Types of gig workers
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:
- Those willing to work multiple shifts at multiple places and whose training and education may not fall under the traditional brackets
- Those seeking additional income and flexibility, but are not willing to be bound by the many rules that a full-time position involves
- Those who have specialised skills but are not willing to make work the central pivot of their lives; they work to finance a lifestyle that may involve travel followed by periods of break
- Those who have full-time jobs but are seeking additional income sources to make ends meet (rising inflation rates have a huge role to play)
What does the gig economy offer?
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.
Access to talent on-demand and skills development
- In a gig economy, organisations have access to a global talent pool. They can hire experts for specific projects without the need for relocation, exhausting hiring processes or long-term commitments. Organisations can be agile, creative and scalable with a multifaceted talent pool.
- Nurturing such a talent pool is a low-risk investment for the organisation. Many organisations are no longer focussing on employing the best people in the sector but on having access to the best people. It is also a constructive way to vet an individual for future full-time employment.
- Smaller organisations and startups often cannot afford to hire full-time employees. The growth of the gig economy is a blessing for such entities since it enables them access to experience, skills and expertise. In the traditional setup, such organisations usually have no option but to hire people who could not fit into large organisations for various reasons.
- For individuals with highly specialised skills, gig work is an opportunity not only to earn more than what a full-time position offers but also to further hone their skills and work in stimulating environments.
- For many individuals, gig work can be a pathway to skill development and future entrepreneurship. It enables individuals to work on diverse projects and sharpen both technical and people management skills. Many gig workers acquire new skills while doing gig work. This not only opens doors to future opportunities but also boosts their abilities and confidence to helm their own enterprises.
Scalable and flexible workforce
- As organisations and individuals embrace flexibility, the concept of a gig economy is becoming more and more mainstream in many sectors, especially in the technology sector. Manpower can be scaled up or down as required. And, with most workers seeking flexible work hours, it is possible to have people working on projects almost round the clock. Projects can be completed faster, saving organisations both time and money.
Gig work: A strategic labour model
- Gig work is no longer viewed in a disparaging light and associated only with low wages, lack of opportunity and no benefits. Just as remote work has become an accepted work model now, gig engagements are expected to become an integral part of the labour landscape soon. For example, when platforms such as Upwork, Taskrabbit, Hyper, and Fiverr started operations, they were considered stopgap platforms that people explored while waiting for better opportunities. However, all such strategic platforms have now become a part of organisations that are planning and building present and future labour forces.
- With employment trends showing an increasing focus on skills, many organisations are quite willing to have a blended workforce and a hybrid working model.
Higher satisfaction and greater happiness
- Despite lower payments in many cases, independent workers frequently report greater happiness and satisfaction with their work than those in full-time positions. This is not surprising, considering that, after salary, some of the primary reasons that make people leave an organisation are job dissatisfaction, ineffective leadership, and mental health.
- Gig workers also enjoy diversity of work and clients, not to forget financial security. In fact, most gig workers who have been working independently for a significant period cannot go back to a traditional full-time position.
- Gig workers frequently report that their work model allows them to live the way they want to. While many gig workers began working independently because of a lack of options, there is a significant percentage of people who have dropped out of the traditional working environment and made a conscious shift. Such people are perhaps the most satisfied.
Challenges of the gig economy
It cannot be denied that the gig economy is not all smooth sailing. There are challenges that need to be managed.
- Lack of employment benefits
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.
- Unpredictable future
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.
- Security issues
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.
Gig economy is here to stay
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.
Careernet services
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.
Write to us at sales@careernet.in for a demo.
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