Understanding the gig economy

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With huge shifts in the way we live, work, and play globally, the traditional nine-to-five job with a single organization and being on the payroll is no longer a desired or viable reality. Instead, millions are pursuing a balance of various income streams and work independently on jobs as it suits them.

Recent figures show that over 57 million Americans are freelancing or contracting. That’s about one in three workers. The trend started around 2000 and gained momentum in 2008 during the ‘Great Recession’ as people were forced to look for alternative work. In this piece, we explore global influences on the gig economy, the expected growth of the sector in the future, and strategies you can use to hire independent talent in your own business. Onwards we go.


Getting to know the gig economy 

Research by ADP found that in the US, one in six workers in organizations is a gig worker and in about 40% of companies, one in four workers is a gig worker. Why so popular? Many people take opportunities in the gig economy to pursue a more flexible, autonomous lifestyle and unique types of work. But for others, it’s a lifestyle born from necessity to supplement their income and ensure financial security.

Research by McKinsey & Co found that independent workers generally fit into four segments:

  •  Free agents – those who choose independent work and derive their primary income from it

  • Casual earners – those who use independent work by choice for supplemental income

  • Reluctants – prefers traditional jobs but make their primary income from independent work

  • Financially strapped – does supplemental independent work out of necessity

The workforce can be supplemented by gig workers of all kinds, to help make up skills or supply shortage. Project-based work in the tech and creative industries are most popular within the gig economy (75% of freelancers work in the art and design industry, according to Upwork). Beyond typical creative projects, the gig economy can extend into a variety of sectors such as food services, construction, media, broadcasting, education, and more.

Growth of the gig economy into many different sectors has the potential to impact on the skill levels and career development of permanent workers. Skilled contract workers have the possibility to get more work — even a permanent position if they do well. Wider acceptance of the gig economy is shining light on traditional HR practices and is changing how we look at the world of work. Both employers and employees alike should consider the influence of this evolving industry.


Pursuing job satisfaction

Today people are searching for experiences and growth, the need for stability and permanent 9-5 stability is not so ingrained or important. According to Upwork, 84% of freelancers are living their preferred lifestyle compared to just 54% of those in traditional jobs.

Working in the independent professional workforce offers attractive benefits — the freedom to choose creative projects, a flexible lifestyle, and remote working possibilities — resulting in a growing industry and high levels of job satisfaction. Research by MBO Partners found that independent workers feel increasingly comfortable in the gig economy — with approximately 56% saying they also feel financially secure.


Global impacts on the gig economy

Remote work life

COVID-19 has undeniably impacted the gig industry, as the world was forced to slow down, and businesses converted their workplaces into multitudes of home offices. Many lost their jobs or had their hours cut in the process and were put in a position to find solutions — fast. Finances Online share that in 2020, 23 million new participants joined the pool of gig workers in the US. 75% of those surveyed say they began freelancing to support financial stability during the pandemic.

Leading generation

Millennials are fuelling the expansion of independent work and account for 33% of all freelancers. With flexible hours, greater independence, and creative work on offer, one can see the attraction. Gen Z makes up 16% of the total — but as the newest group entering the workforce, it’s expected to grow into the most entrepreneurial generation ever. Our article at the 9Spokes Open Journal dives deeper into why Gen Zers are becoming business leaders.

Tech advancements

It’s never been easier to pursue and sustain a remote working lifestyle. High-speed internet enables freelancers to apply for jobs outside of their local region and work from just about anywhere. Cloud app technology, data sharing, and video conferencing has made it simple to communicate and collaborate across departments. Not to mention the boom of gig platform giants like Uber, Fiverr and TaskRabbit who make it possible to readily connect people in need of services with people who will provide them.


The gig economy is here to stay

86% of freelancers think the industry has an even brighter future ahead of it, despite the health crisis. Gig workers are a solution to one of today’s top business challenges — finding skilled workers to fill essential positions. Businesses benefit from being able to hire workers for a set period or specific project. With an up-front understanding that the job is temporary, businesses have the freedom to be agile and roll with the changing demands of their workforce.

Every indication is that the independent work industry will continue to grow. If the gig economy evolves at its current rate, more than 50% of the US workforce will participate in it by 2027. With a tight talent market and financial pressures, businesses should look to understand the dynamics of the independent workforce. It’ll help to optimize ongoing workforce strategies, enhance people management practices, and improve business performance overall.


Hiring in the gig economy

Hiring employees for short term roles isn’t new, what’s new is how we go about it. Here we share some simple hiring strategies to explore in your own business:

Attract the right talent

Showcase your brilliant employer brand to attract gig workers and importantly, tap into their desire to do meaningful work. Because freelancers are already on an unconventional career path and aren’t drawn to traditional perks, focus on project goals or the various creative aspects of the role in your job description.

Tap into a broader network

Make the most of your connections. People are more likely to move on information shared by someone they trust. LinkedIn is a great resource for finding qualified and available candidates in your network and casting your search wider. Attending conferences in your business’ sector can also be a great way to meet freelancers.

Create a great culture

The key to success is creating a culture and environment that incentivizes gig workers to come back and take on more work. Gig work focuses on work-life balance, so you need to create a flexible, inclusive environment. Offering flexible hours, and opportunities to mingle with co-workers and collaborate across departments are good places to start.

Offer the right digital tools

Being able to work from anywhere and stay connected through laptops, smartphones, and other mobile devices has enabled gig workers to work from anywhere. Ensure your employees have the right business tools and cloud-based systems to collaborate easily across the board. Having a digital onboarding system, like Bamboo HR makes it simple to integrate and manage new employees.

Utilize gig platforms

With a task force of freelancers, companies can now hire highly specialized and flexible workers independently from around the globe with ease. Explore your options at talent marketplace platforms like Fiverr, Toptal, or GoLance. Project management software like Teamwork or Asana can help you to manage tasks and timelines.