A gig economy is a labour market in which independent contractors and freelancers fill temporary and part-time roles rather than full-time permanent workers. Gig workers get flexibility and freedom at the expense of job security. Many firms save money by foregoing perks like health insurance and paid vacation time. Others provide certain benefits to gig workers but outsource benefit programmes and other administration chores to third-party vendors. The name comes from the music industry, where musicians schedule “gigs,” which are single or short-term engagements at multiple places.
The gig economy is centred on flexible, transitory, or freelance work that frequently include engaging with clients or consumers via an internet platform. Workers, firms, and consumers may profit from the gig economy by making employment more adaptable to the requirements of the moment and the need for flexible lives. At the same time, the gig economy may have drawbacks as conventional economic links between employees, enterprises, and clients deteriorate.
Many individuals work in part-time or temporary jobs, or as independent contractors, in a gig economy. A gig economy results in cheaper, more efficient services for those willing to utilise them, such as Uber or Airbnb. People who do not use technical services like the Internet may miss out on the benefits of the gig economy. Cities have the most sophisticated services and are the most involved in the gig economy. A gig is a broad category that includes a wide range of employment. Contract employees, as opposed to tenure-track or tenured teachers, include adjunct and part-time instructors. Colleges and universities can save money and better match teachers to their academic requirements by hiring more adjunct and visiting lecturers.
Factors Influencing the Gig Economy
Employers also have a broader pool of candidates to pick from because they are not required to choose someone based on their location. Furthermore, computers have advanced to the point that they can either replace people’s former professions or allow individuals to work just as efficiently from home as they did in person.
Economic considerations also play a role in the growth of the gig economy. Employers who cannot afford to recruit full-time staff to accomplish all of the necessary work may frequently hire part-time or temporary personnel to handle busy periods or specialised projects. On the employee side of the equation, people sometimes discover that they must relocate or take numerous occupations in order to finance the lifestyle they desire. It’s also normal for people to change occupations several times over their lives, thus the gig economy might be considered as a large-scale representation of this.
In 2020, the gig economy grew significantly as gig workers provided goods to homebound clients and people who had lost their employment turned to part-time and contract labour for money. Employers will need to prepare for changes in the workplace, particularly the gig economy, after the crisis has passed.
What Is an Example and Advantage of the Gig Economy?
Opportunities in the gig economy are ones that people discover and access through internet platforms that offer such jobs. These are frequently one-time or contract work. Driving for a ride-sharing service, painting someone’s house, freelancing job, coaching, fitness training, and tutoring are examples. There are no further perks, such as health insurance, and the work is swapped for cash.
Benefits: The gig economy offers several advantages for both employees and employers. An employer has access to a diverse pool of talent from which to hire. If the talent turns out to be less than satisfactory, there is no commitment to keep the employee or concerns with letting them leave. Furthermore, in a period when it is difficult to find full-time labour, firms might hire from the gig economy.
Furthermore, hiring gig workers might be less expensive since employers do not have to pay for health insurance or other perks. The perks of the gig economy for employees include the ability to work many jobs, work from anywhere depending on the individual job, independence, and flexibility in their daily routine.
What impact does the gig economy have on the future of work?
For both businesses and job seekers, the gig economy provides a sustainable labour and workplace solution. The gig economy makes it possible for companies to engage adaptable workers for their short-term requirements at a low cost in a workplace that is always changing.
Employing a flexible workforce allows businesses to avoid mass layoffs, save money on benefits and training, and receive the exact amount of labour needed to meet their staffing needs. Similar to this, the gig economy gives independent workers a stable career path with more flexibility, a better work-life balance, and possibilities depending on their skills that they may pursue at any point of their lives. A business should take action to stop this sort of disengagement from happening and should have a conversation with every employee on how to make sure they feel valued and appreciated at work.
There is little question that the gig economy offers businesses an unmatched chance to restructure their personnel. Employers might not be that poorly off by utilising the gig economy and relying more on a contingent workforce. Additionally, this would enable businesses to extend their employees in response to changing demands, particularly for tasks that cannot be done remotely.
Gig Impact on HR
IMPACT ON HR Due to the increase of gig labour, HR will put more effort into discovering solutions that combine organisational effectiveness and the talent lifecycle to analyse and optimise structure and plan for all positions in your company, including those of contingent and regular employees. Additional effects on HR include:
Role definitions being changed. Given the longevity of the gig economy, it’s time to reconsider how labour is accomplished. The options to discover talent become more apparent when you view work as a sequence of activities that may be shared, rather than a single job that must be performed by one person. Freelancers may not perfectly fit into the entirety of a caregiver’s or retail sales associate’s employment.
Modifying established labor laws to include independent contractors. HR will need to take the lead in developing regulations that give these workers the correct benefits, rights, and protections as gig work becomes more closely tied to hourly labour.
Impact assessment of gig workers. Systems that monitor a freelancer’s employee lifecycle are not as common as those for regular workers. Connecting this data to your other workforce systems is crucial if you want to assess the effects that various types of employees have on your company’s operations and identify problems, trends, and growth prospects.
While a gig economy can help businesses find excellent talent, there are some potential legal pitfalls, the greatest of which is worker misclassification. When a company labels a worker as an independent contractor even though they fall under the legal definition of an employee, this is known as worker misclassification. This implies that even if the person appears to be in a typical working arrangement, they do not receive the benefits of permanent employment.
It can be difficult to distinguish between a freelancer and an employee, and the categorization isn’t always clear-cut. According to Entrepreneur, the courts have developed six guidelines for businesses to use when determining whether a person is an employee or an independent contractor. Aside from independent contractors, there are additional categories of contingent workers, such as temporary employees who may be employed directly or through a staffing firm. These categories include statement
statement of work (SOW) employees and independent contractors.
3 Strategies for Finding and Hiring Talented Gig Workers
Maintain the Hiring Pace
For the purpose of employing independent employees, recruiters must expedite the entire hiring process. Yes, the evaluations and interviews are crucial, but be careful not to overdo it. To get a better idea of the gigger’s skill set, you can always check at their portfolio. Only hire them if they meet your needs. You don’t need to spend too much time evaluating gig workers because they aren’t full-time employee.
Have an autonomous business
Typically, contract employees are hustlers or students who want to work on their side projects in their free time. They anticipate their clients’ clients to be accommodating with their project needs because freelancing is frequently only a side gig for them. Simply put, people want the freedom to work when they choose. Recognizing that working remotely allows one to do so at any time and from any location is never too late.
Engage in Training
Employers cannot afford to overlook the reality that recruiting gig workers is an investment in itself, even while full-time employees require the training to gain the abilities to handle any challenges that may arise in the future. So why not make a little bit more of an investment in their training and have greater results as a result? It is crucial to plan training sessions for all employees, interns, trainees, or contract or independent workers.
On the internet, there are various well-known programmes and services, like HireME. Unlike the majority of applicant tracking systems (ATS) on the market today, HireME is completely customised to match the unique demands of your company. Our system may be customised to meet your specific needs, whether you need to monitor important data points pertaining to certain recruiting teams or want to automate job posts on your website.
Wrapping it up
Gig Economy is going well with the need? It’s possible that the workforce may never be the same as it once was. Our relationship with work will probably continue to change to embrace more flexibility as digital technologies continue to grow. The way employees work, who they work for, and how they plan their life are all things they desire more control over.
Therefore, we believe firms will need to learn how to welcome employees as real partners in the gig economy, particularly by accommodating their needs.