Entrepreneurs

How the Rise of the Gig Economy Influences the Workforce

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Today, many working professionals leave behind the security of their 9-to-5 work for the flexibility offered by the gig economy. You have witnessed the rising numbers of people joining freelance or doing gig work in the past decade. Working at your preferred time and place are enticing incentives for the gig economy. 

Contrary to popular belief, the gig economy is nothing new. This working concept has existed since businesses started hiring temporary or seasonal workers. Today, the gig economy refers to the segment of the workforce involved in freelance, contractual or part-time employment instead of the traditional 9-to-5 jobs. Examples of gig workers include freelance writers, online tutors, digital marketing specialists, web developers, cybersecurity specialists and many more. 

The rise of the gig economy

Gig jobs might not be a new concept, but it has become popular among the younger generation over the years. The pandemic further amplified its popularity since the current health crisis disrupted many businesses and altered the course of many companies.

You can trace the rise of the gig economy to the global financial crisis in 2007 and 2008. It greatly affected many traditional businesses, which resulted in either their decline or completely altering the nature of their business. Consequently, many people turned to freelance or contract work to survive the financial crisis, which is happening again amidst the pandemic.

However, even before the pandemic, many Americans are already shifting to the gig economy. In 2017, an estimated 55 million Americans were part of the gig economy, or 36% of the workforce. A CNBC report in February 2020 stated that the number of gig workers surged by 15% since 2010. That is about six million more workers involved in the gig economy than in 2010. 

Related: Gig Economy Platforms Are Creating A New Class of Entrepreneurs

The growth of the gig economy

You might be wondering why numerous workers are shifting from traditional work to the gig economy. In my opinion, two factors significantly influence the growth of the gig economy.

One is the workers’ shift of preference. A 9-to-5 job is no longer the dream job of many workers, especially the younger generation. Traditional employment has lost its luster. More individuals are looking for work that offers flexibility, allowing them to select their schedule. They no longer want to be stuck at an office desk for at least eight hours a day. That is why more and more workers are enticed to join the gig economy. 

The dream job for many individuals today is working on their laptops while traveling the world. Digital nomads are individuals who use new technologies to do their work in a nomadic fashion. About 36% of them are doing freelance work for multiple companies. Since they are remote workers, they do their work not in office spaces, but instead in coffee shops, public libraries, in front of the beach or recreational vehicles. They can usually spend several months in one location then move to another one.

The second is the internet. You could assume that the rise of the gig economy is connected to the rise of the internet. New digital technologies did not only alter the business landscape, but also reshaped how people do their work. The internet made it possible to do your work and earn a living anywhere without requiring you to report physically to work. About 50 years ago, such a scenario was unimaginable, but the pandemic highlighted that work is no longer tied to office spaces. People can perform their work remotely.

A recent online survey of working professionals revealed that about 30% of them would opt to quit their job if they must return to the office in the post-pandemic scenario. The survey also revealed that flexibility on where to work would become an integral part of any employment deal. Companies not inclined to make such offerings could make them unattractive to prospective employees and experience difficulties in employee retention.

Related: How is Gig Economy Transforming the Workforce?

The gig economy and the workforce

Many companies need to recognize that the future of work will revolve more around the gig economy. It is not only a trend in the United States, but it is also happening in other parts of the world.

The growth of the gig economy will significantly benefit many workers today by offering new work opportunities and multiple sources of income since gig workers can work on several gigs simultaneously. Gig workers can invest more time acquiring new skills than traditional workers because they can take low-intensity jobs while learning additional skills. On the other hand, the drawback would be a lower retirement benefit than those in traditional employment.

The gig economy also allows companies to get workers who specialize in niche skills such as IT and marketing. Hiring highly experienced workers with niche skills would be costly for companies. That is why it would be advantageous for many businesses to acquire the services of freelancers with niche skills because companies can get the same skills with a lower overhead cost.

The gig economy can help workers and businesses stay afloat even during recessions. Workers can take multiple gigs at any point, while companies can save more from lower overhead costs.

Like jazz musicians who earn their living through gigs, workers in the gig economy must continue to hone their craft. They should know that they need to keep practicing and perfecting their craft to achieve sustained success. They need to remain relevant in their field as the future of work will revolve around the gig economy.

Related: 10 of the Highest-Paying Gig Economy Jobs of 2019

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