Gig Economy, also referred to as “crowdsourcing”, the “sharing economy” and the “collaborative economy”, is where the individuals can market their skill sets (in both unskilled labour market and as skilled professionals) and sell their services online on different platforms or companies. In this GD Topic by MBAUniverse.com read all about Gig Economy Statistics, understand reasons for its massive rise, Pros and Cons, and Impact of Covid 19.
With the downsizing trends of talented professionals, the rise of the digital age where the workforce is increasingly becoming mobile and can work from anywhere, and the effect of globalization to create more opportunities, the Gig economy is gaining significant attention in the current generation of the professionals. Today’s economy has created opportunities in the global marketplace for contractors working independently to expand their customers both nationally and internationally and for the businesses to tap the global market beyond the local marketplace to utilize required professional services. With the Gig economy more efficient services are provided at a cheaper rate, for e.g.: Uber or Airbnb.
Examples of the Gig economy
As quoted in the Randstad, and also based on the leading newspaper, ‘The New Yorker’, the gig economy is very much prevalent in many organizations, especially in these techno-savvy times. These companies, such as, Upwork, Thumbtack, 99 Designs, Airtasker, etc. are all based on the system of ratings and secure payment systems routed through online web applications.
In this era of the modern technology of internet and concepts like big data, the push towards gig economy has never felt greater. With just a proper running internet connection, transactions of buying and selling can happen online. The following cloud-based platforms, either in the form of websites or apps or both, have brought together the independent worker and the prospective business client:
Examples of a Gig economy applications:
- Uber: It is a prime example as a representative of the gig economy, especially considering the Uber Driver Partners’ app. Here, anyone, according to their own availability, route and convenience, may choose to start an earning by connecting their own personal vehicles.
- HopSkipDrive: A great startup idea that provides an easy commute for children whose parents are busy and may not have the time to drop them to their schools, or coaching classes. They have diligently verified drivers, aged 23 and above, and with a proven track record of childcare experience. A good earning opportunity for drivers with complete comprehensive insurance cover, and also a trusted platform for parents
- ParkingPanda: In these crunch times times with traffic at an all time high, and ever increasing, parking space is a luxury. Making this luxury, also an earning opportunity for space providers, this app brings the owners and the space seekers together. Anyone may post online, the availability of their parking space according to their own convenience and gain profits through a customer who needs the space.
- AirBnb: What the Uber Driver Partners’ app is in the space of transport, Airbnb is, in the area of housing property. Any type of housing property owners may post online their property’s availability for any probable rental agreement, lasting from about a few hours to even days or months. There is also a provision of referral bonus for providers and customers.
- Lyft: Very similar to Uber, this company also connects its driver partners to riders and also has a PrimeTime pricing feature to help the drivers earn extra during the peak hour traffic timings. It claims an earning of upto $35 per hour for a driver, thus trying to outperform Uber, whose claims are about $30 in comparison.
- Amazon Flex: Using this application, we may earn around $20 per hour by delivering the amazon packages. The feature that allows people to plan our own schedule throughout the week, is extremely flexible.
- Some more freelance apps like UpWork, Fiverr, Peopleperhour, Malt, Thumbtack (home and domestic care), 99 Designs (logos and graphic designs).
As is widely accepted, such platforms behave as any provider’s personal brand image, and also his professional mark of identity. Good jobs and services are rewarded heavily, through good reviews from customers, and hence increased ratings of the worker on the platform.
History of Gig Economy
According to some HR experts, the word “Gig” was first used by Jazz musicians which meant Job, in 1915. The first temp agency was opened in the year 1940, which provided jobs to typists and other clerically trained staff on a temporary basis. Gig economy started to take off in in the late 90s and early 90s along with the digital era. During the 1990s, 10% of the US workforce was employed as contractors, temps and on-call workers, as the demand for more flexible work patterns and non-permanent staff intensified. In the year 1995 Craigslist was introduced, which provided local San Francisco-based online classifieds different jobs, items wanted and for sale, gigs, services, resumes, housing, and more. This was followed by the launch of Upwork in 1999, which allowed freelancers to use the internet to find new projects and clients. Gig economy gained significance around 2008 when the Great Recession hit due to which people had less secure and limited location-based work, and found themselves unable to find stable work.
How does the Gig work?
It consists of tasks (anything like delivering a lecture, housekeeping service or working on software development) that the worker completes. Person can opt to work for specified hours or on a project basis. Once either of these is completed, he moves onto the next gig. When workers tend to work on a variety of tasks or different shifts for various clients or companies, their aggregate earnings may resemble that of full-time employment.
In the Gig Economy, the company is not the employer of the worker rather a connector between the contractors and the clients. The gig economy mostly operates on technology platforms that aim to connect workers looking for flexible work arrangements with the companies who need them in a centralized location, such as an app or website. However, Gig economy workers can also work for more traditional companies, which have changed how their staffing system operates.
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Why is the Gig economy growing?
A number of reasons contribute to the growth of the Gig economy. The workers seem to prefer freelancing over full-time employment due to its the flexibility and independence. It has created better opportunities of finding more work across the globe and made work more adaptable to the changing needs and demands for flexible lifestyles. With Gig, freelancers can make lifestyle choices that a conventional job would not allow. They can choose when and where to work and at the same time determine how much they will charge for their services.
Companies are benefitting from having a flexible workforce; they are spending less money on training or recruitment, need not pay for any medical coverage, and can more easily replace their workforce if needed. Contracted workers are more cost-effective for businesses and employers are benefitted with a wider range of applicant pool to choose from, also, they don’t necessarily need to hire one based on one’s proximity.
Gig economy by Numbers:
- 36% of the entire US workforce, is a contributor, based on their primary or secondary jobs.
- 29% of US workers have an alternate work arrangement, thus contributing towards the the size of the US gig economy.
- 63% of full-time employees have expressed their desire to start working independently, if given the opportunity.
- Almost 40% of the US workforce now earns atleast 40% of their total income through gig work.
- More than 75% of gig workers have explicitly stated that they wouldn’t leave their current freelance work for a full-time opportunity.
- 55% of the US gig workers also do have a secondary full-time employment.
- Close to 37% of full-time freelancers, independent gig workers and consultants are relatively young, and are aged 21 to 38 years.
- Over the span of the next five years, more than 50% of the US adult workforce will either be working or would have worked as an independent gig worker.
- More than 90% of Americans, in general, are open to the idea of freelancing and independent working.
- 10.According to Forbes magazine, the gig economy is expanding three times faster than the US workforce as a whole.
India has emerged as the 5th largest country for flexi-staffing after US, China, Brazil and Japan. India ranks 7th in the talent pool of graduates in science and engineering. Further, India is witnessing a rise in the need for supplemental income due to high unemployment amongst the urban youth, increasing cost of living, growing aspirations of students and changing mindsets of women engaged in homemaking.
Major Industries that hire Gig workers
Here are career categories that hire for freelance and gig economy jobs that you can do remotely.
- Computer & IT: The Computer & IT category covers a broad range of jobs. You can find postings in everything from Digital Marketing to internet security.
- Writing: Writers produce a variety of written materials for various audiences. This can range from corporate reports for the executive suite to blog posts and web content. Gig jobs include: Content Writer, Project Manager; Resume Writer; Senior UX Copywriter.
- Accounting and Finance: Careers in accounting and finance include all things money-related. Jobs can include handling accounts payables and receivables, tax return preparation, or financial forecasting.
- Project Management: Project managers coordinate projects from start to finish. This can include working with internal and external vendors, managing the budget, and dealing with delays.
- Administrative: Administrative professionals provide support for executives, including handling incoming and outgoing communications, managing projects, and scheduling travel.
- Education and Training: As an educator or trainer, you’ll help teach people new skills. You can work as a corporate trainer, part-time professor, coach, tutor, or instructor.
The Pros and Cons of Gig Work
Like any job, there are pros and cons to participating in the gig economy.
Pros of Gig Work
- Flexibility: The most obvious gig work pro is flexibility. As a gig worker, you get to choose when and where you work, which clients you take on (and which ones you don’t), and even set your rates in some situations. You can choose to work only weekends, only nights, or only one hour a week if you like.
- Test Drive Something New: Gig work is something some people do for additional income. But for other people, it’s a way to test-drive a new career. For example, if you love pets and have thought about becoming a pet sitter, gig work as a dog walker or pet sitter is a great way to dip your toes in the water and see how much you love—or hate—doing it.
- Being a gig worker allows you to explore a passion and see if it’s something more than a passing fancy, without losing your primary source of income.
- Save time and money, while making businesses more agile: In a gig economy, companies may lessen their costs linked to resources like money and time. Money is easily saved by hiring experts not for longer permanent durations, but for shorter project based timelines. This also saves on the lots of privileges that any permanent expert enjoys as perks of a high paying job, ones like paid vacations and insurance. This especially is useful for jobs requiring more technical expertise where the concerned person is hired for a shorter duration.
Also, permanent staff selection procedures are much more time and resource consuming. The digital app based platforms can easily be used to hire experts for all kinds of jobs as and when required, even without geographical constraints. These kinds of features, especially come into use for jobs where work-from-home can be used as an added feature. This may be advantageous, especially in critical pandemic times like these when the entire world is plagued with COVID-19. This improved any firm’s agility and better responsiveness to the market’s rather unpredictable scenarios.
Cons of Gig Work
1. Lack of Benefits: Once you’re in business for yourself, you’re in business for yourself. And that means it’s up to you to provide the benefits. Yes, you can choose when you work and when you don’t work, but the reality is, you don’t get paid if you don’t work. And, as a gig worker, you likely won’t have health insurance or other benefits, either.
2. Inconsistent Income: With most gig jobs, you’re paid by the project or task. The problem is, you may not have control over how many tasks you’re able to complete in a day or a week. If no one wants a ride, needs something assembled, or wants you to deliver something, you won’t make any money.
3. Burnout: Working multiple jobs or at odd hours isn’t for everybody. Some people find that as flexible as the work is, gig work becomes tiring and stressful after a while.
4. Loneliness: As they say, habits go away slow. Even the random complaint from a boss or a colleague is sometimes missed by the lonely individual worker, in a gig economy. This may especially be true for the ones with issues such as long distances or even long working hours to contend with, like the delivery personnel or drivers.
Also, people involved in writing, editing, designing or web development or similar desk jobs, may start to have limited access to real life human interactions. Though, as their number increases, so will the number of co-work spaces increase eventually. It’s places like these which can then be utilised for trying to lessen the loneliness wherever possible.
5. Need for more discipline and resilience: Individual workers in a gig economy may enjoy a lot of freedom, but this freedom may also create a sense of indiscipline sometimes. As they say, with great power comes great responsibility, so the workers shall have to show even more grit to complete projects on time, assure the clients of quality delivery, while also showing more resilience to probable rejections, or even greater scrutiny from the clients.
Impact of COVID-19 on Gig Economy
With all major economies going into recession and slowdown, COVID 19 has greatly hit the job market. However, in case of gig workers some are struggling to find work while others are seeing job opportunities increase. Delivery drivers or those who pick up food orders for online platforms such as Big Basket and Zomato have seen demand skyrocket as consumers obeying calls for quarantining have ordered food and supplies to their homes rather than venturing to physical stores.
A challenge that gig-economy workers may face is that they are typically not registered with government and regulatory agencies, making it difficult to ensure that government help will reach them.
Global forces will continue to make the gig economy relevant. If individuals and organizations want to consider proactive strategies to beat the global competition, they cannot afford to ignore the freelance workforce. In fact, the gig economy has succeeded to gain momentum internationally to be a critical factor in the very near future.
The defining characteristic of gig economy businesses is that they offer online applications to connect individuals seeking services with those providing services, and do not consider themselves to be service providers. These offerings can themselves can be entirely online or offline