What is the Gig Economy?
The gig economy is a market system that has temporary and flexible job positions, and organisations hire independent workers and freelancers for short-term commitment instead of going for full-time employees. The gig economy is quite the opposite of the traditional economy of full-time employees who focus on long-term and stable positions leading to a secure career.
The term “gig” means a job that has a specific tenure depending on the need of the project or company’s requirement. Musicians usually used this term for their different projects but now it has become common in the vocabulary of independent workers and companies. In the gig economy, the workers employed are usually paid per project or job. The employed workers get the flexibility of working from anywhere at the hours they prefer. They do not have to follow the norm of 9 to 5 every day like full-time employees.
Examples of gig economy include project-based workers, freelancers, temporary or part-time hires, and independent workers.
- The gig economy depends on temporary, adaptable or freelance jobs. Usually, clients and independent workers connect through online platforms during the projects.
- The gig economy makes work more flexible and leads to a much more accommodating lifestyle. These benefits are attractive to many businesses and independent contractors.
- The traditional equation between employers and employees is missing in a gig economy. When companies hire independent workers, they sometimes face a lack of work culture with them.
The Rise in the Gig Economy
Many studies across the world show how more people are opting for independent jobs and the rise in number as each year passes by. A study by Intuit in 2018 speculated that by 2020, almost 40 percent of American workers would be involved in independent jobs. Many reasons are contributing to a global rise in short-term jobs.
- Thanks to digitisation, work can be completed from anywhere, and the workforce has the flexibility to choose their hours.
- The jobs do not require for the independent worker to come to the office to complete the tasks. They can work remotely from the place they prefer.
- The job and location do not have to go hand in hand. Employers are not limited by location or proximity while hiring the independent worker. This increases their reach and allows them to reach out to a bigger pool of talent when it comes to hiring.
- Employers can also find suitable hires for specific projects (short-term or long-term) in less time as the location is not a constraint.
- Due to time or financial limitations, sometimes employers cannot find the right kind of talent they need. The gig economy allows them to overcome this issue.
- A flexible workforce reduces the financial burden on companies while generating the quality of output desired. Companies do not have to spend on office space, training, equipment and benefits for the independent workers.
- The gig economy is beneficial from the viewpoint of maintaining a work-life balance for the independent workers. Many people strongly consider this when they take up projects.
- The independent workers can choose with whom to work and the kind of projects they want to work on.
Types of Independent Workers
According to the McKinsey Global Institute, independent workers can be classified into four categories:
- Free agents – They diligently opt for independent work, and this is the primary source of their income.
- Casual earners – They consciously decide to choose independent work for additional income.
- Reluctants – Their independent work is their primary source of income, but they prefer regular and traditional jobs.
- Financially strapped – They are involved in additional independent work as it is a necessity for them.
Why Are Independent Jobs Gaining Popularity?
- They do not require long-term commitment as the jobs are mostly done on project-basis. The independent workers know for how long and what they are signing into.
- The independent workers have the freedom to work on their terms. They do not have to follow a schedule or company culture while working. This freedom of work also helps in relieving them from stress.
- These are flexible jobs. They can work at the time and place they choose, and with whom they want.
- They make their own decisions about how to work and manage their hours. They can choose what suits their personal requirements the best.
- These jobs create a work-life balance for them which they aspire for. They get time to focus on their hobbies or passion along with the work.
- The jobs are clear, and there is more transparency between the employer and part-time hire.
Top Paying Gig Economy Jobs
These were the top-paying gig economy jobs in 2019.
- Deep learning jobs
- Blockchain jobs
- Robotics jobs
- Penetration testing jobs
- Amazon Web Services Lambda jobs
- Virtual and augmented reality jobs
- React.js jobs
- Final Cut Pro X jobs
- Instagram marketing jobs
- Ethical hacking jobs
- Photography jobs
The growth of independent work has tangible economic benefits such as offering employment opportunities to the unemployed and boosting creativity. Digital platforms can play an important role here by providing scale, faster matches, and efficient coordination thus enabling trust.
Some challenges need to be addressed for the right development for independent workers. Issues like training, benefits and income-security need to be solved.