The gig economy is an interesting shift occurring in today’s workforce. The term itself might be new to some, however the concept is not foreign at all. Many Americans have considered themselves independent contractors, consultants, freelancers, or temps at one time in their career. In years past, these titles were used to describe a smaller group of workers who have found themselves in a short-term position – often as a result of unemployment or career transition. What’s new: today these terms have become a preference for many within workforce.
What is a “gig economy”? A gig economy or workforce takes place when hiring temporary or freelance workers is more common within organizations. In a gig economy, companies will hire contracted workers instead of full-time employees for short-term assignments. In a recent survey conducted by EY.com of employers in the U.S., one in two organizations indicated that they have increased their use of gig workers in the last five years.
Why has this become a growing trend for U.S. workers?
A study by Intuit predicts that by 2020, 40% of American workers would be independent contractors. Workers such as an independent contractor or freelancer will gravitate toward gig opportunities due to improved work-life balance. According to TechTarget, there are a number of reasons why we are seeing this growth in the gig workforce. Number one is technology. Flexibility is important to today’s workforce and technology allows workers to be mobile and allows them to perform their jobs from anywhere in the world in some cases. Other factors that drive individuals toward gig work verses full-time employment are:
A. The Great Recession: The economic downturn in 2008 pushed many Americans into choosing flexibility rather than structure. During the recession many lost promising full-time careers and learned to adjust. Gig workers do not conform to the belief that a 9-5, 60-hour work week is mandatory for their livelihood.
B. They embrace freedom: People who choose the gig economy are not interested in a desk or cubicle dwelling. They prefer to work gig-to-gig and use the down time, between jobs to pursue other interests.
C. Obama Care: One of the many perks to full-time employment are medical benefits. Today, gig workers have the option to choose coverage made available by the Affordable Care Act.
How do companies benefit from gig workers?
This trend offers perks to organizations as well. Companies contract gig workers for specific projects and simply end ties when the projects are complete. Strategic HR Inc. says that one of the benefits employers have is an agile workforce. By utilizing an on demand workforce, employers are able to quickly increase or reduce headcount in response to changing demand. This approach can result in considerable savings to employers’ bottom line. Organizations can avoid costly resources such as employer paid benefits. Many gig workers are merely displaced professionals – by choice, who are subject matter experts. If effective hiring is achieved, time and resources spent on training is minimized. The need for office space is also reduced as many work remotely.
Preparing for a changing workforce
As the trend continues, companies will need to find ways to creatively support and utilize gig workers. They will also need to promote engagement and find ways to attract and maintain the interest of future workers. Ensuring compliance should also be evaluated on a regular basis. As the trend evolves, we will likely see adjustments made to state and federal laws.
Building a relationship or making connections with a reliable staffing firm, such as ASE’s Talent Acquisition team, is a great way to find gig workers.
Sources: EY.com; money.cnn.com; TechTarget.com; monster.com