From dog walking to software development, the gig economy has taken over traditional business transactions. Due to a combination of available technology, uncertain economic conditions, and changing views on traditional employment, the gig economy is here for the long haul.
Especially popular among the millennial generation, the gig economy is a newly mainstream model for getting work done. Definitions can vary, but the term “gig economy” refers to practice of having workers take small, short-term jobs with a limited scope in lieu of a traditional nine-to-five job with one employer.
Many people find gig economy work through online platforms where freelancers can list their services after passing a screening process. This process varies, depending on the work involved, but it could include completing a background check, a portfolio review, or a driving record check.
While gig work is less formal than traditional employment, there are checks and balances in place to make sure that freelancers can provide quality work. Platforms like Upwork have a thorough review process in place that gives each freelancer a rating, a summary of the type of work done, and a note about if the deadline was met.
Workers can use websites or apps to put together a non-traditional workweek based on how much they want to work during a given time period. People can do gig economy jobs remotely or from a shared office space in Chicago, rather than in a traditional office setting.
What kind of work happens in the gig economy?
Gig-based workers complete all kinds of tasks. One of the most common gig economy jobs is driving for ride-hailing platforms like Lyft and Uber. Delivery work is also popular, with online grocery shopping and delivery services available in most major cities.
Dog walking, pet sitting, house sitting, and babysitting gigs are also popular. The gig economy also includes plenty of more specialized work such as graphic design, web development, programming, technical writing, and software development. As more task platforms pop up on the horizon, more jobs may become better suited to gig-based work.
Why does the gig economy exist?
A variety of factors play into the recent explosion of the gig economy. First, attitudes about traditional employment have shifted over the last decade. Many people know someone who suffered dire consequences as a result of corporate shakeups and downsizing sprees, after devoting years of dedicated work to that particular company.
Many people’s views of the employer-employee relationship has evolved over the past generation. Lifelong jobs are no longer the norm. The concept of mutual loyalty is not as strong as it once was among employees and employers. Millennials are especially likely to have witnessed a parent’s struggles with uncertain employment due to offshoring or downsizing. A common response to all this has been a desire to be more self-sufficient.
Many employers also enjoy the flexibility and lack of commitment that comes with using gig workers. In addition, improvements in web-based capabilities has led to an increase in platforms that facilitate the gig economy. App development has gotten more accessible and less expensive, and creative startup companies have provided dozens of convenient platforms for workers to find people who need work done. In the gig economy, workers can take jobs simply by clicking a button on a smartphone.
Pros and cons for gig workers
The gig economy has its pros and cons for employers and for workers. Many workers love the flexibility of gig work. This type of employment allows freelancers to adjust their workload so they can work when they want to. Gig workers can take a few days off for an impromptu trip to the coast without having to go through an employer’s approval process.
Likewise, gig-based freelancers can decide to pick up more jobs to earn some extra fun money. Many gig workers also enjoy variety, with the opportunity to work with different people on a range of projects, instead of focusing solely on one type of product or service for years at a regular job.
Not only that, but gig workers can also jump from vocation to vocation with ease, giving them even more ways to add variety to their work time. For example, gig workers can make a living by walking dogs, driving people around town, and designing websites. If one income stream falls out of favor, maybe because of an unruly Great Dane, they can simply decide to focus more attention on another activity without suffering serious financial consequences.
By having multiple streams of income, gig workers can decrease the financial risk of having one stream of work dry up. Traditionally, workers have had all their eggs in one basket with one employer, so getting fired or experiencing layoffs can be financially devastating.
The gig economy also gives workers the feeling of being their own bosses. With that comes the freedom of making their own schedules, setting their own goals, and deciding when to work or take time off. The downside can be the time spent looking for work. Sometimes it takes almost as much time finding appropriate tasks and completing additional interview sessions as it does to complete the task itself.
In addition, the popularity of gig economy income streams have made some platforms extremely popular, resulting in downward pressure on fees earned per job. Many U.S.-based gig workers, including writers, programmers, and web designers, are in direct competition with overseas professionals who can charge lower rates for the same job.
Another downside for gig workers is the fact that unlike traditional jobs, there are no benefits that come with the gig economy. Health insurance, retirement savings, and income taxes are the responsibilities of each worker. Freelancers must also have good time management skills and be comfortable working without supervision. Gig economy workers may also miss the camaraderie of a traditional job.
Pros and cons for employers
Employers benefit from the gig economy in several ways. Most importantly, they can run their businesses with lower expenses by not having as many full-time workers. With ongoing expenses reduced, business can be more profitable, leading to more opportunities for growth.
Many times, gig workers are brought in to complete tasks that aren’t needed on a regular basis. The ease of adding specialized workers allows businesses more flexibility in their strategies, since they don’t have to be concerned about the long-term feasibility of adding an extra position. It’s hassle-free to get a task done without the commitment.
It’s easy to find freelancers on sites like Upwork when a short-term project comes up, but there’s a risk of ending up with a worker who misses the mark. Since many employers bring on gig workers more casually and without the extensive vetting that would occur with a full-time employee, an occasional misfire isn’t unusual. With the short-term nature of most gig-based project, however, it’s usually easy to remedy the situation. It’s also a lot easier to start over with a new gig worker than it is to fire an employee who just wasn’t a good fit for the company. Even with thorough vetting, sometimes new employees don’t work out, but it may take some time to realize that.
Reviews and ratings systems on freelancer sites can prevent many bad situations. Once a job is complete, the business owner or manager has an opportunity to rate the experience with the freelancer via a series of questions, a star rating system, and comments.
Utilizing the gig economy
Workers can continue to utilize the gig economy to provide a multi-faceted approach to earning a living. The gig economy provides a different kind of stability than a traditional nine-to-five job because it gives workers a diversified income stream instead of having one employer that can cause a major disruption with one boardroom decision.
Employers can use the gig economy to have access to a steady stream of top talent without having to add new job titles to the payroll. When the needs of the business shift, employers are free to add or drop workers as needed to keep up with new demands. Employers also have the ability to select from a wider talent pool, since remote working is common in the gig economy. This is advantageous for employers since they can work with world-class designers, developers, writers, or programmers on an as-needed basis.
The fast-growing gig economy is an exciting work model that enables businesses and workers to be more flexible and financially stable.