The gig is up…or is it? The rise of the gig economy
Before becoming a gig worker, get a crash course on the gig economy – what it is and how it has created lasting cultural shifts in the way we’ll work for decades to come.
The benefits of being a gig worker
Structured work days from Monday to Friday are a thing of the past…literally. Explore how gig work offers greater work-life balance and a chance to do work that you love!
Gig work is not new, and it goes far beyond driving for rideshare platforms or delivering food. In its present form, the gig economy emerged alongside the internet, growing sharply during the 2008-2009 financial crisis. In 2019, more than one third of American workers were doing some form of gig work.
Gig work offers a chance to earn extra income while the flexibility helps maintain a healthy work-life balance. Gig work also benefits employers, who can lower costs by working with gig employees who perform exactly the tasks needed at any given time.
Enter 2020, and the COVID-19 lockdowns.
While some gig workers saw demand for their services plummet, others were classified as essential workers. The rise of remote work also resulted in a surge in demand for gig workers skilled in IT and software development.
In the wake of the pandemic, more and more organizations are embracing gig workers. What’s the one key element that’s going to be critical for business success moving forward? Greater integration between independent and traditional employees, so that knowledge can pass freely between them.
In the first chapter of this series, we’ll learn more about what the gig economy is, how it plays a major role in the future of work, and why it’s here to stay.
The gig economy – typically described as work done by independent contractors or freelancers – is not new. Think back to your first job. Did you babysit for the neighbours? Mow their lawns, or shovel snow? If so, you were performing gig work.
For almost as long as people have been exchanging labor for money, work has meant stitching together multiple jobs, doing whatever tasks were available. More recently, in the early twentieth century, staffing and temp agencies began offering a more flexible form of work, and the term “gig” emerged – borrowed from musicians who were paid to perform at live shows, or “gigs.”
When most people think about gig work today, they probably think of rideshare or delivery drivers, and this makes sense, because these workers have been in the news a lot lately. But don’t be fooled; gig work is available in most industries, especially in the public sector.
The explosion in the gig economy in recent years is due to technology. The modern gig economy was first powered by the internet, which made it simple for people around the world to connect.
At first, people used online bulletin boards such as Craigslist to offer up their services for various types of physical labor. Soon, dedicated platforms emerged, offering a central spot where individuals looking to work could connect with potential employers.
The term “gig economy” really hit its stride in the 2008-2009 financial crisis, which saw a surge in the popularity of task-based labor as rising unemployment drove people to look for any available jobs, even short-term contracts.
Other factors include the emergence of online platforms such as Airbnb, an online marketplace that made it possible for individuals to commoditize their real estate, and Uber, which transformed the way we get around by employing an innovative and transformative digital platform to connect drivers with passengers. By 2019, more than one third of American workers — 57 million in all — were performing some type of gig or freelance work.
What’s fueled the growth in gig work? For the people doing the work, the biggest benefit is flexibility: most gig work lets people work when it’s convenient, and this often means earning an income over and above what is received through more traditional employment. Gig work also lets people follow their passions as they develop and enhance specific areas of expertise.
The immediate impact of the COVID-19 lockdowns highlighted many of the inequalities of independent work. Many people turned to delivery options for everything from fast food to equipment for their home offices, and food and parcel delivery workers — classified as essential workers during the crisis — put their own health and safety at risk to keep us fed and working.
Others, especially drivers for ride-hailing platforms and Airbnb operators, have seen their earnings plummet. The economic slowdown has also affected the demand for online labor, particularly in the knowledge economy, as organizations have reduced spending by eliminating every job that’s not essential.
As societies begin to emerge from the pandemic, however, demand for gig work has returned: the Online Labour Index project at the University of Oxford, which tracks the number of projects posted on the five largest English-language online labor platforms, showed a dip in early April 2020, followed by historic high levels of projects in late May 2020. The ongoing transition to remote work also led to a surge in demand for software development and IT services:
As time passes, it’s also likely that we’ll see that COVID-19 has had another significant impact on independent work. More and more organizations are embracing the benefits of gig employment – in particular, the ability to find and hire specialists who have the precise skillsets needed for specific projects – so the need to better integrate the two types of employment will become critical. Traditional employees and independent workers are often kept siloed within an organization’s structure, and gig workers rarely have equal access to internal knowledge-sharing platforms. This means that instead of flowing freely, information and knowledge get stuck.
With the number of independent workers growing, organizations will need to make sure that processes are in place so that knowledge transfer can continue. Once this happens, independent workers will be better able to put the full scope of their talents to work.
What does the future hold for the gig economy? Even though there are some clouds on the horizon – such as protests and lawsuits over workers’ rights – there is little doubt that developments in technology will continue to change the way people work, and the growing task specialization made possible by gig and independent work means that the age of generalized employment is almost certainly coming to an end.
For most of us, the reality is that working extra hours doesn’t have an upside. Unless we use a time clock to punch in and out, we don’t get paid more. And far from being more productive, we’re suffering more from burnout and lack of free time, so much so that we may not realize that our salaries hasn’t kept up with cost-of-living increases, because we simply don’t have enough time to relax.
There’s also lots of evidence that slashing working hours is a better way to increase productivity. A New Zealand company recently tested a program where they gave employees an extra day off each week, with no changes in pay or working hours the other days. The result? Workers were not only happier; they were also 20 percent more efficient. Even in countries like Japan, where long hours are seen as a sign of dedication to one’s firm, there are signs of change: Microsoft Japan ran a project shutting down all its offices on Fridays, and productivity shot up by almost 40 percent over the previous year.
For millennials – people born in the early 1980s – job-hopping is normal. Even though they’re only part-way through their careers, millennials have changed jobs nearly 8 times on average. For workers, there’s lots of upside to changing jobs often:
Employers also find lots of benefits in job hopping:
As people change jobs more frequently, spending less time at each job is becoming more accepted. So is there a connection between the rise of job-hopping and the growth of gig work? Probably. Employers are getting used to hiring people for shorter periods of time, which is exactly what many gig workers look for. But that doesn’t necessarily mean that gig work always means taking short-term jobs: research shows that more than half of all independent contractors have worked with the same company for more than 12 months, and that one third of gig workers also believe that they’ll keep their current jobs for at least five more years.
There’s lots of evidence about the growing numbers of gig workers. An Upwork study found that 57 million Americans did freelance work in 2019 – that’s 35 percent of the entire American workforce. Nearly half – 45 percent – of these workers provide skilled services and labour, filling employment gaps: a 2020 study by the payroll and HR company ADP found that at 40 percent of organizations surveyed, 1 in 4 workers are gig workers.
For companies, hiring independent workers has many upsides. Independent workers are comfortable with change, so if you’re looking for people who can generate new and innovative ideas, an independent worker could be the perfect choice. Many independent workers have experience working in different roles at different organizations, and millennial gig workers are more likely than other age groups to see themselves as dependable and self-disciplined, to have emotional agility, and to be willing to work hard, all qualities that are highly valued in the workplace.
Hiring independent workers can also have financial benefits: companies may see payroll costs drop, because gig workers may be motivated by factors other than benefits and compensation packages. Finally, as outsourcing projects becomes more common, and as companies make hiring independent workers part of their normal course of operations, the demand for gig workers will continue to grow, and more people will choose to supply that work as part of the gig economy.
Far from being forced to do gig work, most independent workers – 72 percent – are choosing gig work. In fact, only 7 percent of independent workers said that they were doing gig work because they couldn’t find a regular job.
Have you ever noticed that time seems to fly by when you’re doing something you love? Because independent workers can choose their work, there’s a much greater opportunity for them to follow their passions rather than doing boring or repetitive jobs. Here are some other benefits of independent work:
Given the increased awareness of the negative effects of stress, is it any wonder that more and more people are choosing to leave “traditional” jobs?
Legislation governing 8-hour workdays first emerged because of long hours in harsh factory and manufacturing jobs. As factory jobs become less common, and with the rise in white-collar jobs, working hours have risen once again.
Several studies have shown that shorter work weeks lead to greater productivity and happier employees.
Job-hopping has become an accepted part of the working world, especially for younger employees, and these employees are also the most likely to engage in independent work. For employers, independent workers help increase flexibility and agility. For workers, gig work offers greater work-life balance and a chance to do work that they love.