Understanding the Gig Economy: Perspective and Knowledge are Power

Understanding the Gig Economy: Perspective and Knowledge are Power

‘Gig working’ is a modern term for part-time work or working as an independent contractor. If there’s a distinction between working as an independent contractor and the new gig economy, it’s that in the gig economy you tend to work on a large number of small contracts (a ‘gig’) rather than one or two large contracts.

While independent contracting has been popular for decades, the recent advances in technology have allowed independent work to thrive, morph, and grow. High-speed internet at home has lowered the necessity of a central office and face-to-face meetings. Cloud-driven technologies like Dropbox and Google Docs have made it easier to access your work from anywhere, making jobs like freelance writing simpler to get into. The ubiquity of mobile devices and 4G internet has allowed new part-time jobs to emerge, such as driving for Uber on a part-time basis.

In the US, more than 35% of the workforce is gig working. This is expected to increase to 43% by 2020.

Working Independently Is Great

There is no doubt a wealth of benefits to the gig economy for workers. You have much more control over your work-life balance, more freedom over when and how you work, no boss telling you what to do, no company culture to conform to, and a greater sense of independence. Many people who begin working for themselves couldn’t conceive of going back to work in a traditional office environment.

Creative people looking to makes ends meet enjoy the gig economy. An artist can supplement his or her main work with a side job such as commissioned work on Fiverr or driving for a ride-sharing company. Whereas in the past when money got tight these people would have to quit their dream and take a ‘sensible’ job, now they can support themselves with gig work until they are better established.

Working Independently Is Tough

However, working in the gig economy and self-employment, in general, is not all wine and roses. It takes a lot of self-discipline, better budgeting, and you lose a number of benefits you may take for granted from an office environment.

Being your own boss is a double-edged sword. You set the deadlines, so if you miss one, you’re to blame. You choose the workload, so when you’re swamped with work or you don’t have enough work to afford an emergency expense, you’re to blame. There’s no complaints department, so you deal with all of your customers yourself. When things go wrong, you’re the one who must apologize and put it right.

You no longer get on-the-job training, so it’s up to you to keep your skills relevant and up to date. In the future, you might want to get back into working in a more traditional role. Landing a new job in a competitive field is tough, and you’ll need to personally keep up with industry trends and ensure you are educating yourself to keep your skills sellable. You’re going to need to prove yourself even more than someone who has had a continual job at a traditional company. Again, the onus is on you. Additionally, even if you have never worked outside of an office setting, you may see and uptick in new employees who are transitioning from freelance back to an office setting. 

Most traditional jobs offer additional benefits like a 401k and healthcare. Step into the gig economy full-time and it’s on you to buy your own healthcare and prepare for your own retirement. Every day you get sick or take time off you get nothing, whereas a traditional job would still pay you for your sick days. This can give you additional stress as you work over weekends, try to work when you’re sick, or work long hours.

Gig Working for Employers

Gig working offers opportunities for employers. Hiring independent contractors means you don’t need to provide benefits like healthcare or pensions. You need smaller premises and don’t need to buy equipment like computers and telephones for the workers. You don’t need to pay for lunch hours or sick days or worry about the minutia of office life. You pay the contractor for their time and the work is done.

However, it’s tough to form a company purely around temporary workers. Few gig workers will get to understand how your business really works and promoting from within becomes more difficult. The core elements of the company culture will be diluted if much of the work is outsourced to independent contractors; ultimately meaning that what your company does that makes it stand out can be lost.

Companies should look at the gig economy as an opportunity but also consider ways to improve the benefits of traditional work in the office, enticing highly talented individuals to work exclusively for them and offer a product better than gig economy workers could create alone. 

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