The gig economy has become a popular catchphrase, especially during the pandemic. It has drastically changed people’s outlook on remote work and the future of their careers. With companies adopting massive changes in their workforce and work systems, its impact is undeniable. If you are curious about the past, present, and future of remote work, we’ve done the research so you can find out more about the gig economy in numbers.
But first, what is the gig economy? In essence, it involves hiring freelancers, contractors, and other professionals for temporary work instead of hiring traditional full-time workers. This is not only exclusive to the US but in all countries across the globe.
The statistics about the gig economy are proof that times have truly changed. People no longer have to work a 9-to-5 job to realize a sustainable income. Now, it’s common for professionals to work temporary jobs to support their families and their lifestyle.
Gig Economy During and After COVID-19
The increase in gig workers has been affected by the COVID-19 pandemic, as well as the rise of platforms such as Uber, Airbnb, and many more.
Before COVID-19 hit, 70 percent of those who work gig jobs reported that they chose gig work for improved flexibility and, at times, provided a higher income compared to a full-time job.
Although flexibility is an appealing advantage of gig work, it is likely that for millions of workers that shifted to gig work out of necessity and not by choice. Following the outbreak of the pandemic, many offices, schools, and establishments shut down as disruptions in everyday life made this inevitable.
According to 92 percent of workers, the pandemic spurred their interest in participating in the gig economy. This highlights how our current work environment is quickly transforming traditional work processes, and the way work gets done today.
And as a result, there is now a massive shift underway in the workforce. Since the onset of the pandemic, over 2 million Americans have started freelancing, and almost half of gig workers rely on the gig economy for a primary source of income.
Gig Economy in Numbers: How Big Is It?
According to Forbes, more than one-third of workers in the US are currently part of the gig economy. That’s around 57 million people. While it’s hard to pinpoint the exact number of those who do freelance gigs as their major source of income, they clearly make up a big part of the country’s workforce.
The current number of gig workers is a big jump from the 14 million gig workers in 2014. The industry contributes a staggering $1 trillion to the country’s annual economy. And it is expected to keep growing. It is predicted that by 2023, more than half of workers in the country will be engaging in gig work.
Workers Love the Flexibility of the Gig Economy
One of the upsides of being a gig worker is you can enjoy flexibility, whether it comes to the type of job you can take on or your working hours.
According to research, the gig economy in numbers signals that workers are satisfied with their new lifestyle and career. Around 75.7 percent of gig workers are not considering quitting their gig for full-time jobs. Not only that, but the same study also mentioned that people who depend on gig work do not have alternative employment because they do not need nor want one. This shows that gig work is not a temporary form of employment for many workers. Rather, it represents a better lifestyle and work-life integration.
Increased Productivity for Workers
A study by Constellation Research that involved several hundred IT projects found that those that were staffed with gig workers were around 30 percent more productive. There were also fewer customer complaints. This highlights the fact that working in the gig economy isn’t about working in your pajamas at home. Rather, it is about getting more work done on your own terms.
Women as Gig Workers
Without having the option to hire someone to watch their kids during the pandemic, a lot of parents, especially women, have had to resign from their traditional jobs to care for their children. According to the Labor Department, around 865,000 women resigned from their jobs in September 2020. This number is four times more than the men who left the workforce. A quarter of professionals who left their traditional jobs felt like they needed more flexibility to care for a relative, child, or parent.
Many people may think that there are fewer women in the gig economy due to companies like Uber having male-dominant workers. However, when transportation is not considered in the sector, women make up a bigger percentage of income-earners in the gig economy, particularly in digital platforms. For instance, in Etsy, 86 percent of sellers are women.
In a recent survey that involved more than 2,000 women who were mostly caregivers, 96 percent said that flexibility was their greatest motivator and the best advantage of freelance work.
Pay for Gig Workers
One of the most important pieces of data involved in the gig economy in numbers is the earnings of professionals. The average freelancer rate is $20 per hour, which is higher than the $18.80 per hour average in the US. The hourly rate is even higher for those who offer skilled services at $28 per hour.
Considering this data, US gig workers are earning more compared to the general population, and this is a big factor in why there is a strong presence of gig workers in the country.
Despite this, it’s important to note that gig workers are understandably more anxious about their financial security compared to people who have traditional jobs.
Gig Economy in Leading Sectors
It seems that IT is one of the most promising industries when it comes to hiring gig workers. For instance, in 2020, the demand for IT analysts rose by 43 percent. For data engineers, it’s 31 percent. The demand for project managers also increased by 23 percent.
Aside from the IT sector, there is also growth in the web and design sector which represented 30 percent of global freelancer incomes, according to Payoneer. Next is programming at 19 percent. Content writing and translation made up 8 percent and 7 percent, respectively.
Hiring Gig Workers Is Great for Companies
In 2018, Buffer found that 35 percent of companies have employees that work remotely. This area of the gig economy in numbers signals that brands recognize the advantages of hiring gig workers.
Access to top talent
Companies that are not hiring gig workers are missing out on tapping into top-notch talent. But why is this the case? Companies who hire gig workers also benefit from having a more educated staff, as gig workers are highly educated.
Save money and resources
In a study by Kelly OCG, around 57 percent of brands save money by hiring independent workers. Not only that, but 43 percent of companies that use gig workers save at least 20 percent in their labor costs. The money brands pay to their full-time employees for vacation pay and insurance is significant and can even represent up to 30 percent of an employee’s total compensation. When brands hire gig workers, they can eliminate these costs.
Hiring gig workers can also cut infrastructure costs since there is no need to have a large office space, computer servers, and other office necessities. Some businesses can even eliminate their need to have an office altogether.
That is not all. Brands can also benefit from having an easier and less costly onboarding process. Annual onboarding costs for 100 employees can reach $40,000, and it can take as long as a month to bring new workers up to speed. By using gig workers, the onboarding process will be a lot faster. This is even a great method to test working relationships with talented professionals. Instead of hiring in a traditional way, companies can simply give out assignments to different gig workers. Then they can assess the potential fit of these workers. Though many trials will not work out, successes virtually eliminate the onboarding costs and time.
Hiring gig workers can be an amazing solution to companies who need additional help during specific seasons or projects. Around 42 percent of companies consider using gig workers when their workload increases. Those hired for such jobs know the terms of their job. And a lack of long-term job security is part of the package. A lot of gig workers even prefer the variety of taking on new jobs every few months or weeks.
The Future of Gig Economy
According to Mastercard, the global gig economy is expected to reach $401.4 billion in 2022 and $455.2 billion in 2023. A huge chunk of the value of the gig economy comes from transportation-based services, which represent 90 percent of the entire gig economy. This should come as no surprise. There is currently a rapid growth of services from new platforms inspired by the growth of Uber and Lyft.
Considering that the gig economy is largely fueled by Millennials and Gen Z, the trend will continue to rise in the future. These digital natives aged 18 to 38 represent 56 percent of the gig economy. For comparison, Baby Boomers make up 16 percent, and Gen X professionals make up 28 percent.
It is expected that in the coming years, millennials will make up 75 percent of the global workforce, and considering the number of millennials that are already part of the gig economy, it signals another boost for the industry as a whole.
The Rise of Gig Economy Is Inevitable
In today’s digital era, companies and professionals realize how the gig economy can make their life better. The gig economy is not new. But it is clear it will play an integral role in the future of work.