The Rise of the Gig Economy
More and more people are turning to the gig economy as a way to make a living or earn extra cash. But where has this growth come from? We look at the main factors that are responsible for the drive behind the rise of the gig economy.
What is the Gig Economy?
The gig economy is a labour market made up of freelance or part-time jobs as opposed to full-time, fixed contracts.
All kinds of contingent work arrangements get grouped under the term including: consultants, freelancers, independent professionals and contractors, temporary contract workers (temps), and outsourced networks and teams.
The advantages of a gig economy job
Working as a ‘flexi’ worker certainly comes with its benefits. For most people, these include:
- Low barriers to entry. Anyone can enter the gig economy, regardless of their skill set.
- Being able to adjust your own work-life balance.
- Flexible working hours, often with the choice to decide when to work and for how long.
- Having the choice of which kind of work and projects that you take on.
- The ability to work from anywhere around the world.
The global COVID-19 pandemic
Gig economy workers were essential for keeping services running during the COVID-19 pandemic that would have otherwise not survived, whether it was vital medicine delivery services or online teaching services. Many people also lost their jobs or had their hours reduced during the pandemic, and turned to the gig economy to quickly supplement their income.
Off the back of COVID, it’s not uncommon to hear about individuals pivoting from working as a contracted employee in one field to being a gig worker in another. One prime example is live event organizers who have switched to organising online conferences as needed, or content writers who had been employed full-time by one company and start freelancing for a range of clients.
The Digital Economy
Location is no longer a factor when it comes to finding the right people, whether that’s an agency looking for an SEO specialist to work on a big project or a freelance illustrator looking for an author.
Technology has also resulted in the creation of gig economy platforms that link consumers directly with workers. Examples include Airbnb which connects hosts directly with those looking for a place to stay, or Uber which connects drivers with someone who is looking for a ride.
The Human Cloud
The “human cloud” refers to jobs, projects or gigs that are carried out on demand – in the Cloud – from any location, and through any online/digital platform, typically by a contingent workforce
According to Staffing Industry Analysts (SIA), about $80 billion is spent annually on human cloud technologies. Staffing Industry Analysts defines the Human Cloud as “an emerging set of work intermediation models that enable work arrangements of various kinds to be established and completed (including payment of workers) entirely through a digital/online platform.” Human Cloud services offer technology that supports everything from recruitment and work assignment, to time and attendance tracking and payroll. There are three main types of Human Cloud platform models: Crowdsourcing, Online Work Services, and Online Staffing Platforms.
With more workers choosing to move to freelance/gig work, the battle for talent is fierce. Employers can make faster hiring decisions while onboarding and deploying workers even faster by leveraging a cloud-based workforce management platform to manage their team.
The great resignation effect on the gig economy
The great resignation refers to the American and European job market which has experienced the most significant job losses in over fifty years. Many believe the pandemic spurred on this trend, with many workers re-thinking their lives and are now seeking more meaningful careers and healthier work environments. According to recent Upwork research, 20% of Americans are giving up the traditional 9-5 structure and considering switching to freelance work full time. The gig economy already existed before the pandemic, however due to the pandemic older generations such as Gen Xers and Boomers began to dip their feet into the gig economy. Prior to this the majority of gig economy workers consisted of Millenials and Gen Zers.
Issues Surrounding Regulations and Compliance
While the gig economy can provide top talent for organisations, there can be legal risks, and the biggest is worker misclassification. Worker misclassification happens when an organisation classifies a worker as an independent contractor when the person meets the legal definition of an employee. This means the person doesn’t get the benefits associated with permanent employment, even though for all intents and purposes, the person is in a traditional working arrangement.
How People2.0 can Help?
To alleviate these risks and much of the administrative burden that comes with employing these workers, People2.0 can manage your contingent workforce, including handling compliance and risk mitigation. Our local teams know all the current rules and regulations and what to consider when it comes to payrolling. People2.0 ensures full compliance, a correct payroll, legally valid contracts, transparent invoices and that the workers receive salary and all entitlements and compensations on time. Unlike other staffing service companies, we don’t recruit ourselves, but leave it to the experts.
If you would like to find out more, get in touch with us via firstname.lastname@example.org or visit www.people20.com