For many people, the term gig economy might be something new. In reality, gig economy is actually not as new as many people think, in fact, it represents something that has been around for centuries. The difference being, you might be more familiar with the term independent worker, contract worker or freelance worker.
The gig economy basically offers work which is based on people who choose to work as independent contractors or freelancers by accepting temporary positions or jobs. These temporary positions can be simple tasks which can be accomplished within hours, or they can be positions that last for weeks, months and even years. Compensation will vary depending on the individual/company need and type of work performed as well as any other details regarding the position.
According to research conducted in 2013, over 18 million Americans were considered self-employed or independent contractors. Besides that, these same independent contractors also contributed to additional employment by contract hiring another 2.3 million independent workers for themselves. Researchers predicted that a structural shift was happening in the economy, and by 2018 the independent work force will grow above 24 million. The research also indicated that Americans from each generation are accepting more independent work (Brooks, 2013).
An additional study in 2016 by the Metropolitan Policy Program from the Brookings Institution, discovered that employment from the gig economy was growing quicker and outpacing the traditional payroll employment. But even more interesting, research indicated a significant change in the overall numbers, which may produce a drastic realignment of the current employment situation in America (Wells, 2016).
Does working as an independent contractor make it a career?
Of course not. Independent contractor, freelance work or contract work is basically not a career. Although, if a person does freelance or contract work for a living, it just might be considered a career. What makes this even stronger is the number of people who are choosing independent work over payroll employment. Added to that are the number of people who are forced out of employment due to layoffs and downsizing and looking for alternative means of employment. However, there are even greater reasons why more and more people are choosing to be independent.
Is it out of choice or necessity?
Some people might be under the impression that choosing independent work is only out of necessity to have some type of income coming in. While this might be true in some circumstances, Manyika et al. (2016) found that independent and contract workers have a greater satisfaction for their individual lives as compared to individuals who work out of necessity. The research also suggests that satisfaction is a major contributing force and felt across different countries, age brackets, income levels, and education. Independent workers also realized much higher levels of satisfaction within multiple dimensions of their work and lifestyle, as compared to individuals who work traditional jobs by choice. What this revealed was a larger number of people who valued non-monetary aspects of independent work according to their terms.
What does this mean for business owners?
Well, if you go by the numbers, it’s clear that business owners will have to make some kind of changes within certain areas of their organizations. For example, Dishman (2017) points out several areas where independent and contract workers will have a direct impact on employment. Obviously, HR will immediately see an impact as traditional workers continue on career paths that are slowly being phased out and replaced with contract workers that focus entirely on skills development. Even more traditional roles such as IT, finance, accounting, management, and other executive level positions which have a career path will all be subject to the new gig economy.
Brooks, C. (2013). Independent work force on the rise. Business News Daily. Retrieved from http://www.businessnewsdaily.com/5083-independent-workers-on-rise.html
Dishman, L. (2017). How the gig economy wil change in 2017. Fast Company. Retrieved from https://www.fastcompany.com/3066905/how-the-gig-economy-will-change-in-2017
Manyika, Lund, Bughin, Robinson, Mischke, and Mahajan. (2016). Independent work: Choice, necessity, and the gig economy. Retrieved June 02, 2017, from http://www.mckinsey.com/global-themes/employment-and-growth/independent-work-choice-necessity-and-the-gig-economy
Wells, N. (2016). The gig economy is growing and now we know by how much. CNBC. Retrieved from http://www.cnbc.com/2016/10/13/gig-economy-is-growing-heres-how-much.html