Most of us know what the gig economy is and why it’s grown so popular, a natural result of the traditional employment avenues becoming all too unsatisfactory for workers. While Uber is the first name to come to mind when we think about the rise of the gig economy, it isn’t the first or the only one to have triggered the explosion of the industry. Gig economy employment involves temporary or short-term work replacing, or done in addition to, traditional full-time work. Workers either work multiple “gigs” or work one gig according to their availability. While gig economies allow for flexibility and freedom from corporate life, the gig economy challenges are just as innumerable.
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What Is the Gig Economy?
Performers like musicians used to find gigs or shows to perform at, basing their livelihood on the short-term work they could find. Taking inspiration from their workstyle, the gig economy is built on work that does not guarantee full-time, consistent employment but workers can decide their own work hours and provide their services to multiple businesses to whatever degree they want. The rise of gig economy employment has been largely spurned on by people treating it as a side hustle, a part-time source of employment where they can make extra income on the side. A Bankrate study found 53 percent of Gen Zers and 50 percent of millennials earned extra income on their side.
For many, this additional income helps them live a more comfortable life above their means, providing disposable income for those who can manage multiple jobs. However, many workers who turn to side hustles find their income from their full-time jobs to be insufficient for their basic daily needs and are forced to do more to survive—one in three workers according to the study.
McKinsey’s American Opportunity Survey (AOS) found that 36 percent of employed respondents, or 58 million Americans, identified themselves as independent workers. The study found that when asked about what the gig economy is and what potential it holds for them, these independent workers were far more optimistic about the future of the economy and their own economic growth as compared to full-time workers. This is a good sign and while many gig workers are more than satisfied continuing with work in the same way, there are many struggles faced as well.
Companies like DoorDash, Instacart, Postmates, and GrubHub are a few examples of companies that pay workers based on the tasks they complete rather than a regular salary. Workers can log on whenever they’re ready to work and sign out when they’re ready, without having to check in with anyone. Platforms like Fiverr on the other hand allow people to advertise their services and their prices, and those hoping to get certain tasks done can find someone who matches their requirements and set up a transaction with them on the platform itself. From photographers to voice artists, everyone is free to advertise their work.
Gig Economy: Challenges Faced
The challenges of the gig economy are hard to estimate overall because of how fluid and flexible the work is. These challenges may vary between industries and between individuals as well, but there are some clearly defined issues with options for gig economy employment.
Unstable Income
While flexibility is desirable, knowing what the gig economy is will tell you that regular work is an uncertainty. There may be days where orders are low or work is slow, making their daily income dip as a result. Multiple such days can put a serious strain on the worker. Working with a client might take much longer to wrap up, holding up your income for quite a long period as a result. A full-time job brings a sense of stability in that sense, providing certainty that a set amount of money will reach your bank or your wallet at the end of the month. The amount earned through gig economy employment is also often lesser than the amount that can be earned with a daily job.
No Benefits and Support
These days, most companies provide some form of benefits in terms of healthcare, childcare, travel allowance, retirement planning, etc. These benefits make up for jobs that pay lower, improving the quality of life overall as well. Gig economy employment doesn’t necessarily allow for a serious connection with any one particular business, limiting the potential for any additional benefits from work. In times of emergency as well, it is easier to find some form of support from the workplace, whether monetary or otherwise, but there is no support to fall back on, making it a very considerable gig economy challenge.
Growth Opportunities are More Difficult to Come Across
Working independently through contracts and job platforms means that growing in your career is largely left to you. The scale at which work comes in is largely maintained at the same level unless your portfolio is able to fully display the extent of your work and what you can do. Still, working in the gig economy limits your network because you have no workplace to socialize at or seniors and mentors to learn from. This might make it harder to pick up new skills or get comfortable working with others. Stagnation is quite possible at this stage, requiring additional effort to seek out growth opportunities.
Unclear Quality of Work
When it comes to hiring gig workers or independent, part-time employees, it is difficult to estimate how efficiently the worker will be able to do what is necessary. Due to them being new to the organization and its ways, workers might find it harder to get work done exactly in the format that the company is looking for, as compared to someone who works there full-time. This is easily navigable by being very careful about hiring workers and making the project description as clear as possible to ensure the gig workers know exactly what is needed of them. By using reliable platforms and reviewing past workers, hiring gig workers should not be too difficult.
The HR Perspective: Tapping Into the Potential Of the Gig Economy
Despite the gig economy challenges, workers are clearly invested in making the most of this format of work. Especially for those with circumstances that make full-time employment difficult, the gig economy provides a perfect balance between attending to those issues while still making time to earn an income. It also allows workers to work from the comfort of their homes instead of having to travel to work every day. While most only think of delivery workers and drivers when they hear “gig economy,” it extends to all independent workers who take up work on a project-by-project basis. Digital artists, animators, programmers, or anyone who is required only for a specific project can provide their services to companies that match their own styles and preferences rather than having to work with a company they cannot align themselves with.
There are endlessly talented individuals who are involved in gig economy employment opportunities and companies that aren’t making use of their services are losing out on good business. These workers can bring innovative ideas, novel experiences, and quality work to the organization with investments based on the project instead of having the same existing workers force their skill sets to serve every project’s needs. The rise of the gig economy has also allowed for the rise of specialized workers with niche abilities that might suit the specific needs of certain clients. With the large number of workers who are available through this avenue, you might even be able to find more qualified workers than those currently available in the recruitment talent pool.
It can also be a good budgeting tactic to fully understand and embrace what the gig economy is and hire according to needs. A specific job role might not need to be constantly filled at your company and hiring a sound engineer or a subject matter expert on a project-by-project basis can be more sustainable in the long run. It can free your resources up for other investments. Other hiring costs like onboarding and training can also be skipped with workers hired through gig economy employment.
The rise of the gig economy is no mistake—it gives us a clear sign of where the future of work is headed and more and more workers are turning to it. With increasing cases of burnout and a greater number of workers choosing to walk out of traditional workplaces that do not meet their needs, consider the unexplored resources available through the gig economy. As a business that hopes to keep growing in the future, you should have a serious discussion within the company on what the gig economy is and how best you can adapt it to suit the needs of your organization.