Think of the 90’s when 9-5 jobs were still very much in vogue and traditional career paths were attractive to the workforce. In those days, finding “employment” through a smartphone or an app was inconceivable.
Times have changed. Fast forward to 2020 and we have taken the ubiquity of smartphones for granted. In today’s hyper-connected world, these devices along with several other technological factors such as automation, AI, digital transformation, and a new generation of workers have fueled the growth of the gig economy which is poised to flourish into a multi-trillion-dollar market in the near future. Whether it is about booking a cab, ordering a meal, renting an apartment, getting handyman services, or just getting your dog walked, there’s a market for everything on demand, which consumers have gotten used to. In the US itself, it’s estimated that almost 57 million people participate in the gig economy every year, by leveraging apps such as Airbnb, Lyft, Uber, Wag and, Etsy. Now, that makes up 36% of the entire US workforce.
Clearly, for the new generation of workers, gigs are no longer just something to dabble in while they look for better opportunities. While app-based gigs are still the indisputable drivers of this trend, there’s a silent revolution in the gig workforce that is happening within the enterprise as well.
Research reveals that gig workers make up more than 20% of the workforce at nearly 60% of the enterprises in the US and UK. Additionally, over 60% of organizations expect their share of contract or gig workers to quadruple over the next five years. Considering these figures, it becomes extremely critical for business leaders and employees to understand the implications of the gig economy. That way they will be in a better place to navigate the changing business landscape with informed decision-making.
The Gig Ecosystem – Flexible, Scalable, Profitable
The rapidly growing gig economy doesn’t come as simply a response to changing economic conditions. Rather, several factors coincide to create a scenario where a highly skilled individual chooses to work independently for multiple employers across multiple projects.
Firstly, as millennials become a majority in the top layer of business management and Gen Z gets inducted into the workforce, the conventional attitude towards work is changing. The liberty to freelance is becoming a lucrative proposition because it allows employees to focus on multiple other things than just work. Most importantly, it provides an opportunity to the workforce to maintain a healthy work-life balance which reduces the risk of burnout and fosters productivity. Today, more people than ever are aware of the negative health effects of overwork and stress, and there is an increased focus on wellness. Working multiple ‘gigs’ gives employees more control over how they manage and prioritize their time.
The gig economy also provides employees with the freedom to choose the time and place of work. It comes as no surprise that 43% of employees consider a flexible schedule as the most compelling reason to work independently.
Additionally, the gig economy allows an employee to work on multiple projects for multiple companies simultaneously. This not only helps expand an employee’s skillsets while letting him/her explore new opportunities, but also reduces the risk of job loss or loss of income. In most cases, this also results in higher earnings for gig workers than their FTE counterparts.
In fast emerging workspaces, more workers choosing to supplement their incomes with gigs unlocks a range of benefits for the enterprises. Given the connectivity that technology fosters for communication and remote collaboration, companies are no longer required to have all their staff physically present under one roof.
In such circumstances, gig workers who are largely considered economy hires, are fast becoming a priority for companies that wish to cut down on overhead costs. Research reveals that 43% of companies using contingent workers save a whopping 20% on just labor costs. These savings often come from lower overhead expenses such as medical benefits and other work-related perks.
The gig economy also allows enterprises to access global talent and quickly scale their workforce based on current requirements. It provides them with an opportunity to hire experts for specific services which results in reduced go-to-market time for specialized products or solutions. According to new research from Upwork, 40% of businesses preferred hiring gig or contract-based workers because they can be scaled according to business needs. They are also in demand because 39% of organizations feel that the gig economy makes it easier to find skills that match their exact needs.
Creating a Win-Win Situation
It is estimated that within the next three years, half of the economy will comprise of gig workers. By 2030, this number is poised to go well past 80%. Clearly, as freelancers become a majority in the enterprise workforce, the very nature and definition of work is changing. Organizations looking to make the gig economy financially rewarding for themselves, need to take the following proactive steps:
- Embrace newer ways of worker engagement and management
- Nurture a culture that’s inclusive of worker mobility
- Scale the workforce according to the change
- Foster collaboration and transparency
- Harness technology for seamless operations
Technology is the common thread that will play a vital role in helping organizations achieve these goals. For instance, consider the potential of an enterprise digital platform that creates a common playground for organizations and freelancers to communicate, collaborate & create. Such a platform will become the fulcrum of the gig ecosystem by
- Allowing companies to seamlessly connect with the required resources, in-house or external.
- Presenting employees with vast options to choose from assorted gigs based on their current skills, future aspirations and desired experiences.
All of this powered by inherent, ambient AI built into that platform that can match requirements with aspirations, recommend people and establish credible trust between the involved stakeholders. In the hunt for talent, technology can be leveraged to make traditional considerations like geography, time zones, and language, redundant. The right platforms will allow both workers and employers to benefit from a symbiotic relationship where communication is seamless, efficiency is maximized, and the right talent meets the right opportunity every time.