5 Things You Need to Know About the Gig Economy

From hospitality and event management, to retail and construction, to food and beverage industries, staffing solutions are evolving to meet the requirements of a new breed of employees.  Whether you call them gigsters, temporary workers, contingent workers, freelancers or independent contractors, the gig economy meets the needs of both employees and employers.

Whether by need or choice, many employees are taking advantage of the gig economy to cobble together a livelihood from a variety of income sources called gigs. On the flip side, HR leaders use gigsters to scale up or down their workforce according to seasonality, workflow, project and customer demands.

As a business leader, you should familiarize yourself with the increasingly popular gig economy and the potential benefits you could reap if you jump on board. Here’s what you need to know:

1. What is the Gig Economy?

A teacher works part-time as a barista and earns an extra $500 a month. A stay-at-home mom works as a virtual assistant for $25.00 an hour. A college student works part-time weekends shoveling snow. What do these people have in common? They’re all examples of workers who are part of the gig economy workforce.

According to Gallup, they define a gig work arrangement to include independent contractors, online platform workers, contract firm workers, on-call workers and temporary workers.

2. How Popular is the Gig Economy?

Pretty popular, we’d say. According to Gallup’s recent survey (2018) they estimate that 29% of all U.S. workers’ primary job is part of the gig economy. This includes 24% full-time workers and 49% part-time workers. They also report that a total of 36% of workers in the U.S. have participated in some form of gig work in 2018. This figure is up 25% from the last study done in 2005 by the Bureau of Labor Statistics.

3. Why is Gig Work Trending?

Part of the gig economy’s broad appeal is that it benefits both employees and employers. Forbes writes that gigs provide millennials the coveted work-life balance they’re seeking, whereas Boomers see gigging as a way to gain freedom while making ends meet.

For employers, using nontraditional hires in the workforce means they can quickly add new employees or scale back to match the fluctuating demands of the market. This is especially important for certain industries such as:

• Retailers and hospitality - This segment (which is 20 percent of U.S. positions, according to the Bureau of Labor Statistics) is a perfect candidate for the gig-economy due to the natural ebbs and flows of the industry. Extra staff during holidays and/or prime seasons can make or break a business.
• Event management companies - Flexibility to hire staff for one-time or recurring high-profile events means that tasks such as setting up, serving and clean-up can be easily arranged. This is even more important when events are held nationally or world-wide. Companies can cut down on travel expenses when hiring locals instead of sending a permanent staff around the globe.
• Construction industry - Labor costs are usually the highest line item when it comes to the cost of a project. Having the ability to use workers only when needed can significantly lower these costs and keep project managers on task and within budget.
  
  

4. Will the Gig Economy Grow?

You bet. A study by Intuit predicts that by the year 2020, 40% of American workers will be a part of the gig economy. They also report that free agent employment will continue to accelerate with more than 80 percent of large corporations planning to increase the flexible workforce.

Why so much? One of the driving forces of the gig economy’s growth is the integral part technology plays to provide quick and easy access to hundreds of job listings. With the amount of available apps at gigster’s fingertips, the search for available gigs will continue to get easier and easier.

5. How Does the Gig Economy Benefit Employers?

There are many benefits for employers when hiring contingent workers, including:

• Saving money - With temporary workers, businesses no longer need to worry about expenditures like unemployment, benefits and worker’s compensation. This allows businesses to save a lot of money which can contribute to their economic growth.
• Creating a more engaged workforce - With the gig economy, traditional roles between employee and employer are transformed. Workers who have the freedom to choose when and what they want to work on, through project-based work, tend to be happier and more accommodating.
• Avoiding bad hires - Companies can now fill open spots with highly-skilled freelancers or independent contractors. This affords managers the opportunity to part ways without fiscal repercussions if the contractor doesn’t meet expectations.

Gigging provides a flexible way for everyone: Gen Zers, Millennials, Gen Xers and Baby Boomers can fulfill their end goal of bringing in additional income. As a business leader, it may be your ticket to finding the perfect candidate for the job without the hassle of high wages, costly benefits or scheduling.