3 Ways the Gig Economy Has Changed the Workforce Forever

More workers than ever are harnessing the financial power of having a side gig. Some do so with the goal of eventually quitting their full-time jobs. The gig economy is supported in part by dozens of online platforms that connect those who want to hire gig workers with people who want to control how much (and when) they work.

Businesses are taking advantage of the convenience and potential savings offered by the gig economy. Large organizations typically use gig workers to complete one-time projects and to provide occasional support to their full-time employees. Some companies now call them in-house gigs.

In many cases, it is cheaper to hire a gig worker than to add a part-time employee to the company’s ranks.

Previously, self-employment was limited to owning a physical business or providing services locally. The gig economy has expanded access to job opportunities around the world to anyone with a reliable high-speed internet connection.

How Workers Engage in the Gig Economy

There are many ways to connect with individuals and businesses looking to hire on-demand workers.

  • Traditional self-employment: Independents can work full time or part time. They may work on short-term outsourced projects or have a number of long-term clients. Sites like Upwork, Freelancer, Guru, and Fiverr connect freelancers with clients. Sites take a portion of freelancers’ salaries and may also charge fees to their clients. Both parties agree to the terms of the project, including pay rate, deliverables, and schedule. The client provides payment to the platform, which holds it in escrow. After the successful completion of the project, the platform releases the payment to the freelancer. Traditional freelance work generally suits online workers, including photographers, graphic designers, editors, writers, virtual assistants, and programmers.
  • Working for an online mall: Organizations that connect consumers with a gig worker providing a service include Lyft, SitterCity, TaskRabbit, UberEats, DoorDash, GrubHub, Uber, GoPuff, and Instacart. These platforms allow a gig worker with a cell phone to provide rides, run errands and deliver groceries, connect to families who need a babysitter, or pick up and to deliver food to individuals on demand. This type of gig work can be more successful in metropolitan areas, but depending on the number of workers present in an area, it can also work well in a small community.

1. Gig workers report higher job satisfaction

For the uninitiated, gig work can seem like an unstable and risky way to make money, especially compared to the security of working for one employer.

Gig workers are not guaranteed a minimum wage. They can work long hours without benefiting from workplace safety standards or knowing how much money they will earn. There is no job security, no employer-provided benefits like health insurance, vacation pay, or retirement accounts.

Still, gig workers report a high level of job satisfaction. According to a Mckinsey Global Institute report, nearly 80% of freelancers are happier than workers with traditional jobs, and nearly 70% report being healthier than workers with a single employer.

When it comes to the perceived financial instability of gig workers, more than half of freelancers who participate full-time in the gig economy report feeling more financially secure than those with traditional employers.

2. Many companies are now using gig workers instead of hiring full-time employees

Gig workers aren’t the only ones thriving in the gig economy. Many organizations replace full-time employees with on-demand workers for project-based assignments.

When a company hires an on-demand worker, the barrier to entry is low for the worker and for the organization. There is very little risk for either party since it is understood that the commitment may be temporary.

This low-risk environment allows for better talent mobility. When a construction worker fits well into a company’s culture and completes a job as promised, the company may choose to hire them for future projects based on their past performance.

Gig workers who are opportunity-minded and eager to learn new skills seek challenging projects, and they have the potential to grow much faster as temporary workers for multiple companies than if they had just one. employer. This is especially the case when working for new emerging companies, as there are a lot of remote startups to work for.

Switching to on-demand work means a business can be better equipped to deal with the challenges of growth. It helps a company move away from the traditional constraints of background, formal education requirements, and job descriptions, and hire an on-demand worker for a project-based task. It’s often best to try to hire a full-time employee who may or may not be well suited to a variety of projects. Instead, companies can now hire on-demand workers and use e-learning options to teach soft skills or other tools that can be beneficial for the whole team.

Gig workers can also save companies huge amounts of money. By eliminating the need to compete for the best talent in the job pool, employers don’t have to spend as much time and money sourcing candidates, screening them, and posting jobs. Companies can create a database of experienced workers to create an internal talent market. Project matching, automated skills matching, and setting up notifications when a new worker meets company requirements for a job can ease pressure on HR and make on-demand work a viable part of a company’s culture.

3. Gig work doesn’t slow down

According to Statista, there were 59 million freelancers in the United States alone in 2020, up from 53 million in 2014. Worldwide, that number is exponentially higher. The gig economy continues to grow with accessible task-based sites that facilitate connections between individuals and gig workers and sites that do everything from freelancers’ portfolios to holding their wages until a job is successfully completed.

For many, freelance and on-demand work is a full-time job that may not offer the same security as a traditional full-time job, but does offer more money and freedom. Interest in unconventional work arrangements will no doubt continue to grow as companies tap into the labor economy for temporary workers with specific skills and well suited to a particular project.

The gig economy encompasses white-collar and blue-collar contract work that is creative, mundane, skilled, unskilled, and as versatile as the market demands.

See next: Top 5 Most In-Demand Freelance Skills for 2022

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