March 2023 update: This article was originally written in July 2019 using the data available at that time. In February 2023, new data from Credit Summit showed that the gig economy is growing more rapidly than expected. The reasons are many, not least of which are the lessons learnt during the pandemic. It appears that many more people realise they can work more flexibly, balancing their work-home lives and are opting out of mainstream work and pursuing independent contractor status.
The key takeaways from the new research can be found here: Credit Summit Gig Economy Statistics. In brief:
- It is anticipated that 73.3 million Americans, or 46.25% of the American workforce, are freelancers in an expanding gig economy.
- The data science and analytics sector experienced the largest year-over-year increase in freelancer expenditure from 2019 to 2020, at 115%.
- In December 2021, 4.2 million people voluntarily left their jobs.
- The main reasons behind choosing to work remotely are flexibility (49%) and being able to take care of the family (74%)
- Only 9% of independent contractors prefer a traditional job, compared to 79% who prefer freelancing.
Original article:
The gig economy is growing fast, with millions of flexible workers worldwide taking on regular ‘gigs’ and businesses keen to get on board with a modern and cost-effective way of accessing flexible talent.
What exactly is the gig economy?
The gig economy describes a modern and flexible labour market which utilises freelance, contract and short-term or temporary workers as business demands dictate and allow – rather than the permanent and more static jobs of old. Workers take on ‘gigs’ – such as projects or individual work items – as independent contractors rather than as employees. Prominent examples are taxi drivers, couriers and copywriters, but project managers and even senior executives work in this flexible way.
Sometimes it is called the sharing economy (often associated with digital platforms such as Airbnb), the collaborative economy (particularly in creative or knowledge-based fields) and the platform economy (such as on copywriting platforms like Copify.)
Some statistics worth knowing:
- Over 25% of the workforce are engaged as ‘contingent’ workers in some capacity (source: https://www.gigeconomydata.org/basics/how-many-gig-workers-are-there)
- There are 55 million gig workers in the US (BLS statistics) and 5 million in the UK. (sources: https://www.forbes.com/sites/quora/2019/01/08/what-are-the-pros-and-cons-of-the-gig-economy/#6089f2ee1388, https://www.bbc.co.uk/news/business-37605643)
- Over 10% of workers use the gig economy as their main income source.
The benefits of gig workers to SMEs
Small to Medium-sized Enterprises (SMEs) can greatly benefit from the gig economy to control costs and boost profits. For example:
- Entrepreneurs can flourish, accessing the talent that they need on an immediate, flexible basis
- Scale-ups can grow without the risk of taking on permanent staff.
- Larger businesses can grow and access talent and expertise on an ‘as needed’ basis.
- Businesses can outsource tasks such as payroll, copywriting, website management and customer services whilst staying lean and efficient.
- Firms of all sizes can flex their workforce resources up and down immediately, creating a talented base of flexible workers they can call upon when needed.
- Employers can access this talent without administering and delivering expensive employee remuneration schemes and benefits.
- Technology, such as digital gig platforms, expedites the process and makes finding the right talent for a job smoother and cheaper.
Which organisations are using the gig worker model?
Some big-name companies using the flexible gig worker model of employment are Uber, Airbnb, Fiverr, Upwork, Copify and 99Design. In the UK, companies using it include Ocado, Amazon, Deliveroo, Argos, Addison Lee and DPD.
The benefits for gig workers
Flexibility
Gigs are ideal for workers seeking work-life balance or access to income sources without commitment. Workers building CVs or following passion projects also favours the gig economy. Often creatives, these individuals can pay the bills with flexible gigs whilst developing their interests. Even better, with most gigs carried out online, it’s possible to work anywhere worldwide, hence the number of gig workers funding travel or relocation dreams.
Autonomy
Disciplined individuals can reap the rewards of being their boss and work the hours and jobs they want.
Interesting work
Individuals with expertise, specialist skills or relevant experience can get interesting work at good rates – with the option to structure and manage their own working lives. Individuals with leadership, creativity, the management or strong technical expertise can find meaningful, flexible and rewarding work.
Workers with an entrepreneurial bent will also benefit from the ‘hustle’ of the gig economy – finding multiple opportunities to develop their income streams and enjoying the autonomy of a self-directed career.
Variety
Although typically associated with millennials, gig work also benefits baby boomers and older workers who never had such flexible and digitised work options available in previous years. This can be a boon to older workers who may not want to be tied to a permanent job or are keen to flex their skills into new fields.
Isn’t this just a zero-hour contract?
The negatives of zero-hours contracts have been well documented. However, the fact remains that zero-hours contracts also offer benefits to workers and employers when used in the right way.
For businesses, particularly SMEs, zero-hours contracts offer the opportunity to have a flexible workforce ready and on hand to take on working hours when available. In an age where access to skilled talent is paramount to success, zero-hours contracts allow businesses to scale up when demand is high and avoid over-burdening the wage bill with excess worker resources when demand is low. Similarly, cover can be arranged when permanent staff are absent.
For workers, there is the flexibility that comes with this type of arrangement – and, when combined with gigs, these workers can choose to take on other paid jobs when zero-hours contract work isn’t available. For many, it can also provide a welcome foot in the door to a firm or a career path, especially when building up experience and a CV.
Gig working is undoubtedly here to stay and to grow in prominence. Critics may also find it interesting to note that 70% of traditionally-employed workers aren’t satisfied or engaged in their jobs. Other studies show similar levels of dissatisfaction and stress. The gig economy offers an alternative work model that provides an alternative or a supplementary route to income-generating work. For employers, it offers myriad benefits, from better cost management to flexible access to talent in a digital world. The benefits certainly add up for businesses and workers prepared to flex with the modern world.
