Understanding the Gig Economy, Everything You Need to Know

The way people work has drastically changed, especially with the rapid developments in technology today. In recent years, there has been a trend toward ‘gig’ work, and many forces are behind this rise in short-term jobs. So what is the gig economy exactly?

While the gig economy may be a term that has only gained traction in recent years, it’s not a new concept. The gig economy is based on temporary and flexible jobs. Also, it often involves connecting with customers online. With a smartphone or any device and good internet connectivity, you can work just about anytime and anywhere and anytime.

Origins of the “Gig Economy”

Interestingly, the term ‘gig economy’ finds its roots in music. The term “gig” was first used to refer to the individual performances of jazz musicians. It has become a term associated with all musicians, and now, even non-musicians.

However, this idea of self-contained projects can be applied to the work arrangement of freelancers, project-based professionals, part-time hires, and independent contractors. Instead of having a traditional full-time job, professionals who are part of the gig economy take on short-term and temporary projects for one or more employers.

Gig Economy Definition

The gig economy is a global market system where short-term and flexible jobs are commonplace, and companies hire independent workers and freelancers for temporary engagements.

The term “gig economy” may be new, but this idea is already used by 78 percent of Americans to refer to non-traditional work arrangements.

The gig economy covers many areas of economic activity. The work can range from writing a freelance article to driving an Uber vehicle. Part-time teachers are even part of this economy since they are under a set contract that is different from tenured professors. This system is an effective way that universities can save money and provide academic programs for their students.

How Does It Work?

In the gig economy, a worker completes small tasks in any industry. These tasks could be anything from writing an article to editing videos to getting groceries. They can opt to work by project or set a number of hours to complete a specific task. Once they finish their shift or complete their job, they can then move to their next gig, which could be another task from the same company or something entirely new from another company.

Usually, these projects and time shifts are very flexible. A professional may have an office job from 9 to 5 and a separate gig from 5-8 at night. A gig worker can also work several gigs that comprise a full-time job but on a more flexible schedule.

One of the misconceptions of the gig economy is that all employers are big companies. However, this is not the case. There are tons of companies like Uber and Airbnb that seek gig workers not to employ them but to connect them to clients.

Online platforms, such as Bunny Studio, allow freelancers to share their skill sets with potential employers. The gig economy enables businesses to hire people with special skills from all over the world. Through digital platforms, companies can benefit from tapping into specialized talent pools and low HR costs, there are many candidates to choose from.

The Rise of the Gig Economy

Technological developments have created new opportunities for workers and businesses alike. For instance, professionals can take on any job remotely using any digital platform. And in so doing, they are also more mobile compared to traditional office work.

Many people have shifted from traditional work to gig work, whether it’s because of career burnout, a toxic workplace, or the need for greater workplace autonomy. For many who have low incomes, the main reason why they need side hustles is to cover increased housing costs and living expenses.

A prominent advantage is that the location of workers does not limit their ability to take on projects from all over the world. Freelancers can get hired for a job in North American even if they live in Asia.

This is also a big benefit for employers who want to hire the most talented professionals for their projects, as they can access talent from anywhere.

The result of this setup is a more affordable and efficient service for all parties involved. If you are someone considering gig work, there are many benefits to keep in mind.

Promotes a start-up culture

Any budding entrepreneur knows how challenging and costly hiring full-time employees can be. Generally, start-ups can benefit more from hiring professionals on an assignment basis than bringing on full-time employees. The gig economy perfectly aligns with the flexibility desired by new start-ups in meeting their staffing needs.

Variety in work

The gig economy offers endless variety, from the kind of work you do to the type of people you meet online. ‘Never having the same day twice’ can sometimes be a motivating factor for many gig workers.

The variety of talent available through gig work ensures that companies can find talent that meets their needs.

The increasing number of freelance platforms

The growth of freelancing platforms, both local and international, enhance the employment opportunities in the gig economy. These platforms are the bridge that connects companies and freelancers. Greater choice leads to better work terms and opportunities to find work arrangements that work best for employers and employees. It allows brands to tap into quality talent at an affordable price and gives freelancers the luxury to work on their terms.

Who Can Be a Gig Worker?

It’s nearly impossible to pin down the exact number of gig workers around the world since it covers various work arrangements such as freelancers, contract workers, and temporary workers. This diversity and ambiguity make it difficult to quantify the size of the gig economy.

In 2017, 10.6 million people, or 6.9 percent of all US workers, participated in the gig economy. That number has increased dramatically due to disruptions in the workplace arising from social distancing requirements. There is no single profile for workers in the gig economy, but there is a difference in the kinds of gigs that people generally take on.

Currently, the OECD estimates that the gig economy comprises 1-3% of total employment. The fastest-growing segment of the gig economy belongs to the knowledge-intensive and creative industries. For instance, a marketing firm can hire a video editor that could help them with a make-up commercial, or a new restaurant can hire an experienced chef to help them make a new vegan menu.

Why Do Companies Prefer Gig Workers? 

Over 40 percent of companies expect gig workers to become a critical part of their workforce. And the easy access to remote workers suggests that this expectation will become a reality.

While there are many advantages for employees that take part in the gig economy, it also offers valuable advantages for brand owners. This is evident in the fact that transactions in the gig economy are predicted to reach 455 billion USD by 2023.

Every business owner knows how valuable office space can be. Thankfully, freelancers can work from anywhere, and this can reduce or even eliminate the need for office space and utilities. The ability to hire workers from anywhere with the required skills and experience can reduce the need for training and supervision. Not only that, but there’s also no need to spend company resources on transportation subsidies, healthcare programs, or paid sick leave.

Current Challenges with the Gig Economy

There are current challenges that need to be overcome to maximize the potential of the gig economy.

• The biggest issue is the lack of worker’s benefits. Unlike a full-time employee, a gig worker will often not receive medical insurance and other benefits.
• If you are labeled as an independent worker, a hiring entity won’t have to pay you the minimum wage. Also, you probably won’t be entitled to benefits or overtime pay.
• Freelancing might disrupt your work-life balance, especially when you are not good at managing your time.
• Since there is a pool of employees to choose from, it makes it harder for full-time employees to grow and develop their careers.
• Job security is also an issue. It is a continuous worry for gig workers to have enough work to maintain a stable income. Inconsistent work can become a significant problem, especially if you don’t have a full-time job.
• If you take on too many gig jobs, it may result in burnout.
• Maintaining good relationships between employers and clients long-term can be challenging.

Industries That Hire Remote Freelancers and Gig Economy Jobs

There are many industries that provide many opportunities to get involved in the gig economy.

The Future Is the Gig Economy

The gig economy continues to rise in size and importance as independent work is quickly developing and online platforms create wide-ranging marketplaces to help connect workers and buyers of services.

This opportunity can give employment to many people who are inactive and unemployed but want to work. Additionally, it also allows businesses to look for workers with specialized skillsets for short-term engagements.

The gig economy will continue to grow. How can it work best for you and your goals? We can help you realize your potential and find the freelancers you need to rock your next creative project.