• Impact Of The Gig Economy

    Impact Of The Gig Economy
    November 01, 2021

    Who is a gig worker?

    Gig workers are freelancers who work on a contract, temporary, or part-time basis, frequently on many projects at the same time and with the freedom to work for different employers.

    Drivers, babysitters, online instructors, freelance writers, musicians, and service professionals are all examples of gig workers. Even technical industries like web development and cybersecurity have gone freelancing in the previous decade. Everyone is talking about gigs these days, and even full-time professionals are taking on side jobs to monetize their true passions.

     

    What is the gig economy?

    In place of traditional full-time work, the gig economy refers to the expanding global trend of freelance, contractual, and flexible occupations. Uber and Airbnb are two of the most well-known employers of gig workers, and they are a big reason why gig labor has become so popular.

     

    Uber, for example, is a reliable intermediary between thousands of part-time workers and clients. They are in charge of payments, rules, and ensuring that work standards are met.

    In 2017, the Bureau of Labor Statistics projected that 55 million people in the United States worked as gig workers, accounting for 36% of the workforce. Many economists believe that by 2030, 80 percent of the workforce will fall into this category. The epidemic has ushered in a paradigm shift in how businesses approach the rising gig economy, with examples such as the rise of freelance marketing and media.

     

    Why is the gig economy growing?

    The Global Financial Crisis of 2008 (GFC) and the subsequent recession are to blame for the rise of gig employment in the twenty-first century. The rise of the knowledge economy and dot-com firms has increased the popularity of freelance and contract labor.

     

    Several traditional firms went bankrupt during the Great Recession, while the character of others irrevocably changed. The case of Lehman Brothers is instructive; the banking industry's regulation was altered as a result of the Great Recession of 2008. The transition of the news industry to the digital medium has accelerated.

     

    Manufacturing has slowed, resulting in a shift in labor to service and knowledge-based jobs. In 2019, the service industry employed almost 13 million people, while agriculture employed 2.3 million.

     

    Furthermore, growing costs force many to work numerous jobs in order to maintain their living standards. People who are in debt are more likely to seek out many sources of income and engage in the hustling culture.

     

    Entrepreneurship and the start-up of small enterprises are becoming increasingly popular. Many of them work closely with larger companies and use social media to connect with freelance and part-time professionals. The gig economy is growing as a result of all of this.


    How is the gig economy affecting businesses?

     

    Large, Global pool of talent

    Companies with access to a large global pool of freelance workers profit from being able to complete work quickly in remote locations. For short-term initiatives, they can also recruit qualified contractual staff. Many professional copywriters work from the comfort of their own homes for clients all around the world.

     

    Workers can do low-intensity employment while upskilling for more gratifying work, which is one advantage of the gig economy. Freelancers may be able to devote more time and effort to skill development than full-time workers.

     

    Access to workers with niche skills

    In fields like IT, design, and marketing, there is a significant demand-supply mismatch. This makes it difficult for companies to locate qualified full-time personnel. Due to work and projects that need them to innovate, many freelancers develop niche expertise in these sectors.

     

    Google has launched Google Career Certificates to fill the skills gap in project management, data analytics, IT, and user experience design. These courses are taken by many professionals who then go on to work as freelancers.

    Companies may also find it pricey to acquire experienced staff, despite requiring their services. Many talented individuals, such as teachers and IT experts, feel that freelancing is a great way to supplement their income.

     

    Agile workforce

    In today's business world, there is a shift toward design thinking. It's more about finding deep expertise wherever it's available and when there's a need for it. The necessity for travel-based deployment for client servicing or project monitoring on-site can be reduced with a gig-based workforce.

     

    An agile staff can be built whenever a need arises, making it far more cost-effective for enterprises. For example, a new website that requires a one-time website redesign might hire a content agency instead of hiring a full-time in-house writing team.

     

    Better client service

    The non-location bound gig economy definition can be used by businesses that have a global client base. They can hire people in different time zones to respond to client needs as they occur. This is an ideal solution to the never-ending night shifts that negatively influence the health of customer-facing employees.

     

    It may also be viable to reach out to underserved demographics such as pensioners with strong networks who don't wish to work full-time. They bring their extensive knowledge of client psychology to the table while remaining cost-effective.

     

    Better outreach

    If firms can hire temporary labor in countries where they want to expand, the gig economy may help them boost their brand awareness. Some businesses may be able to set up a skeleton workforce to meet regulatory obligations.

    Brands can sell and create money in these new areas with minimal operational spending but significant brand outreach activities.

     

    Reduced outsourcing cost

    Having the ability to hire part-time and contract workers can help you save money on overhead. It may be less expensive to hire for a temporary position than to train a permanent workforce in skills they may not require. Small to medium organizations can spend upwards of $40,000 on onboarding, which is nearly eliminated when using gig workers. Furthermore, gig workers are not eligible for unemployment insurance or severance pay.

     

    Several firms discovered that some functions could be performed remotely during the epidemic, saving money on office space. According to a Kelly Outsourcing and Consulting Group study, 43 percent of talent managers who use gig workers save 20% on labor costs.

     

     

    Need to invest in worker retention

    While the gig economy allows businesses to save money in some ways, it also requires them to recruit and retain freelance employees. Because several firms are vying for their expertise, these individuals seek stimulating jobs and higher income. Many businesses find it difficult to keep freelancers loyal.

     

    There's also the issue of having to adjust to their reduced working hours. Participants in the gig economy are juggling many tasks and are unwilling to work long hours. It may cost more money for the following hire to fix if they leave work commitments unfilled.

    Permanent employee energy may be used on training new gig hires if there is substantial attrition in certain freelance roles.