Gig Economy: What It Is and Future Trends

gig economy

Define “Gig Economy”

The gig economy stems from the word gig, which can be defined as “an engagement for a musician or group playing jazz music.” The gig economy has been called several names, whether it be the “sharing economy” or the “collaborative economy”. According to Investopedia, the gig economy is “temporary, flexible jobs where companies tend toward hiring independent contractors and freelancers instead of full-time employees”. Examples of notable companies that are in the gig economy include Uber, Airbnb, DoorDash, and Postmates. In 2017, Intuit CEO Brad Smith in an earning calls stated that the gig economy employed 34% of the workforce. It is expected that by the year 2020, the percentage would increase to 43% of the workforce.

The increase of the gig economy is due to a growth in people who are willing to work part time. Many people want to supplement their full-time job with passions of their own while still making money. This leads to cheaper, and more efficient services for the end user, if they are willing to tap into the gig economy. The explosion of services such as Airbnb and Uber serve as great examples of services that have innovated in their industry and have come out ahead than their traditional counterparts.

What Falls Under the Term “Gig”?

The jobs that fall under the word “gig” can be quite varied. A gig does not necessarily have to be under a tech company. There are many freelancers that are part of the gig economy as well as delivery drivers, house cleaners, tradespeople and photographers. Especially with the rise of technology, many people who are in the gig economy can work from home. In the digital age, work is becoming increasingly mobile, making the office setting slowly becoming less relevant for completing a job. With the current reality of people switching jobs every few years, the gig economy stems from this reality.

The gig economy works in both ways in that freelancers can choose projects they are passionate about and companies can choose the best option available for specific projects. Businesses can save money on employee benefits, office space, and training for people hired through the gig economy. As people in the gig economy are not legally a part of the company, they cannot claim benefits, sick pay or vacation time. There have even been some reported cases of gig economy workers that do not even receive minimum wage. In the eyes of the law, businesses are contracting out work to people in the gig economy. As a result, this loophole bypasses many of the working laws set in place today. The risk that comes with hiring employees is now offloaded from the business to the individual.

One benefit of the working gigs is the work-life balance for the people who are working the gigs. Since the freelancer picks and chooses what jobs he or she wants to work, this provides a great amount of flexibility in their schedule. As mentioned in a previous blog, a healthy work-life balance is one of the keys to success. Being constantly under stress can cause anyone to be demoralized and will eventually lead to burnout and negative emotions.

Freelancing Isn’t Easy!

Freelancers in a gig economy have to constantly be searching for their next gig. A common problem in the freelancing world is how to keep productivity high. For some, having the absolute freedom of choosing their work-life balance is too much to handle. Freelancers can often get into a state of laziness and plateau with their work and their motivation. Another problem with freelancing is the danger of social isolation. In the typical office setting, you have co-workers around you to interact with. In addition to interacting with co-workers, finding mentors and people to look up to can be crucial to the professional development of a person. These mentors and older figures help shape the younger generation of employees under them and can push someone from a good to great employee. With freelancing, it is harder to find these types of people who are willing and readily available to help.

The Gig Economy and the Security Industry

One big industry that the gig economy employs is the security guard business. Many security guards work for multiple companies, searching for their next gig. If you are a business owner, it can be difficult to keep track of all the guards and their availabilities. With Celayix’s program suite, you no longer have to worry about these issues. With Schedule Xpress, reduce your scheduling effort as much as 95% with an easy to use, advanced scheduling tool for building, managing, and communicating schedules with your employees. There is even a built in geofencing feature so that guards cannot check-in to a site when they are at home. In addition to geofencing, business owners can utilize Celayix AI to automatically build an optimized schedule. With the smartest rules-based system in employee scheduling software, you can focus on what really matters.

The Gig Economy and the Hospitality Industry

Another sector of the gig economy is hospitality. With the increasing number of events being hosted, hotels have an ever-growing need for employees who can help out at events to counteract the increase in demand. With Team Xpress, schedulers can ask their employees to confirm their schedules as well as to acknowledge any shift changes. Since many employees could be working at multiple locations, knowing each person’s availability is crucial. In Team Xpress, employees can state their availability which will then be sent to the scheduler. The scheduler can then assign shifts based on employee’s preferences. In addition to these features, Team Xpress includes an in-app messaging feature. Your schedulers can contact employees quickly, eliminating the need to use other communication methods.

Trends in the Gig Economy

What does the gig economy have in store for the future? What can we foresee happening in the future?

The Use of Freelancers

With the rise of outsourcing, many larger companies will start to use freelancers. Many firms already outsource parts of their company such as HR, marketing, and payroll. With the rise of the gig economy, major firms will start using freelancers to help with specific problems or tasks that require an expert. With the increasing use of freelancers, training costs and on-boarding time can be reduced. This economy will only continue to grow, with reports projecting contract workers in the US could make up more than half the workforce by 2027. The gig economy is here to stay and companies will take full advantage of it.

No More Offices

Office space is expensive and often difficult to rent. With the explosion of technology that can be used to communicate between employees, is there a need for the office? Productivity applications such as Dropbox, Google Drive, Slack, and Zoom are just a few apps that can integrate with your company’s workflow seamlessly. Employees can work from wherever they please, whether that be in a coffee shop or at home. With no restrictions on location, remote companies can target top talent from all over the world.

With remote companies, a few challenges present itself. First, spreading the corporate culture can be quite difficult if people are not meeting face to face. Employees may be less invested into your company’s culture. Another challenge of a remote company is the different time zones, especially if your company attracts international talent. People may all have the same working hours from 9-5, but due to time zones many employees can start work when the other ends. This can cause discord in the communication channels and meetings can be hard to book with everyone present. Despite these challenges, with the rising cost of real estate in metropolitan areas, remote companies might become a staple in the workplace.

Conclusions on the Gig Economy

The gig economy is here to stay. The new generation of the workforce consisting of millennials and Gen Z is leading the charge. Many people in this digital age are now choosing freelancing instead of the traditional jobs. Due to the rise of technology, many millennials and Gen Z members have dismissed the idea that having a traditional job will equate to a successful life. These generations have taken a favor to non conventional ideas of working such as being a freelancer or a digital nomad. In this digital age, being connected with others has never been easier than before. In the years coming we will see the rise of many companies who utilize the gig economy like Uber and Airbnb. Perhaps in the future, the “gig economy” will become “the economy”. The world is changing around us and so should we.