- What is the gig economy?
- Freelancing for a living: a new trend
- Digital platforms: an on-demand service economy
- New employment strategies attract and keep talent
- A double-edged sword?
- The labour market of the future
The future of work is changing. Just a few decades ago, people worked the same job until they retired. But globalism, the financial crises of the 2000s and a desire for a better work-life balance have led many to abandon the prospect of long-term employment with a single company. This set the stage for the rapid growth of the gig economy. But the term ‘gig’ is nothing new. It was first used in the 1920s, referring to a single, paid performance by jazz musicians. Nowadays, though, gigs also refer to short-term jobs in various industries.
What is the gig economy?
Sometimes also referred as the freedom economy, the gig economy allows people to work as short-term service providers. The development of technology, especially the ubiquity of the Internet and digital work platforms, makes freelancing easier than ever before. Newly developed business models changed traditional work patterns as well and innovations like the Uber model are proliferating – providing self-employed workers an opportunity to earn additional income. The possibilities for freelancing are exploding: from selling DIY projects on Etsy, to running errands for others, to writing on Steemit, platforms like Etherium are enabling gig work in nearly any activity people find valuable. Sanjay Sathe, the CEO of the career-coaching platform RiseSmart, emphasised the breadth of the gig economy. “Where freelancing was most often thought of for creative work (editors, graphic designers, web designers) and contracting was thought of for IT-related positions (programmers, project managers), the gig economy has begun to encompass all types of roles.”
Freelancing for a living: a new trend
The biggest benefit a freelance worker gets is the ability to take as many (or as few) jobs as he wants, balancing work and life. According to the US Census Bureau, in a ten year timeframe, all industries experienced growth in non-employer businesses. And by 2015, 54 million Americans were already involved in freelance work. The European Union also witnessed an increase in short-term work of 45% between 2012 and 2013. Much of the growth of the gig economy has to do with the fact that independent gig workers are only paid for the service: businesses don’t typically provide benefits of any kind. This has proven to be a boon for companies willing to hire freelancers, and Facebook, IBM, and BBC Worldwide are among those consistently looking for gig workers.
Digital platforms: an on-demand service economy
The gig economy is evolving quickly as tech advances fuel change in the world of work. Today, numerous digital platforms provide an efficient marketplace of talent, simplifying communication between employers and job seekers. According to Gregg Fisher, a managing partner at The Stem, a consultancy specialising in customer engagement and digital transformation, “companies facing an in-house shortage of skills will increase their reliance on ‘networked’ professional service firms to efficiently source specialised independent talent to tackle a number of business challenges.” The fact that more ‘traditional’ workers have expressed a desire to be the part of the independent workforce means that many more might soon turn to digital platforms to search for work.
New employment strategies attract and keep talent
The gig economy is also set to change human resource practices, pushing companies to adopt less traditional employment strategies. Competition works both ways: workers compete for gigs, but companies compete for talent, too. As a result, many employers offer flexible working hours and evaluating employees on their productivity, creativity, and efficiency rather than the time they spend at work.
The gig economy is reshaping the way we work by cutting the ‘umbilical cord’ that used to tie employers to their offices. In fact, Diane Mulcahy, the author of The Gig Economy, told the Harvard Business Review that “not one study suggests that working in an office eight hours a day, five days a week maximises employee productivity, satisfaction or performance.” Being tied to a desk, then, has nothing to do with work and everything to do with old systems of control. And McKinsey’s insists that employees who aren’t office-bound exhibit “higher levels of satisfaction and greater productivity.” This makes sense, since remote work eliminates time wasted on commutes, lowers stress, improves satisfaction and leaves more time for real productivity.
A double-edged sword?
Even though gig work allows people to set their own schedule and choose a job according to their preferences, this freedom comes at a cost. Since gig workers are considered self-employed, they don’t receive the usual benefits; they can’t unionise, lack a legal right to pension and health benefits, and typically can’t claim sick pay or parental leave. Low wages are also a problem.
You’re probably familiar with the complaints of Uber drivers, whose pay and work conditions have been compared by The Guardian to the abuses of the Victorian era. “Earnings were barely sufficient to sustain existence, hours of labour were such as to make lives of workers periods of ceaseless toil; and conditions were injurious to the health of workers and dangerous to the public.” Working independently can mean having a hard time making ends meet. Since most gig workers are paid for a job done, their wages are usually lower than those paid by the hour. For instance, food delivery service, Deliveroo, pays £3.75 per delivery. At this rate, it can be impossible to earn a living wage.
Abuses of gig workers are common as well as they enjoy little legal recourse against their employers. These and other complaints by workers are pressing governments the world over to rethink gig employment and the legal expectations that come with it. For instance, the government of the UK ordered Deliveroo to increase its wages to £7.70 an hour and legions of lawsuits have been filed against Uber.
The labour market of the future
Driven by technology, globalisation and the desire for more control over work, the gig economy is reshaping the world of work. While searching for a better work-life balance, workers are moving from traditional jobs to those offering greater independence. Despite its flaws, the gig economy is changing the future of work, bringing employment opportunities to anyone with talent and drive.