Economy

What Is “The Gig Economy”?

Dean Myerow

In case you are still not aware, we are in the “gig economy”. In this “economy”, self-employed or independent contractors get hired for short-term tasks or jobs popularly known as “gigs” – hence the term gig economy. Working as a freelancer is not something new. It has been around for a long time. However, it is been popularized greatly in the past few years thanks to the ever-changing technology and the internet. Many people are joining the freelancing space today. Freelancing marketplaces where freelancers can be hired are increasing by the day. Companies like Fiverr, Freelancer.com, Uber, Upwork, and AirBnB are now household names. Those are some of the popular companies that have made it easier, better, safer and faster to hire or be hired for your services in the gig economy.

But, is the gig economy only creating opportunities for self-employed, independent contractors? Of course not. Even some of the well-known “traditional” companies on the Fortune 500 are either hiring freelancers or allowing their employees to work from home. A few other successful companies are having 50% – 90% of their staff working from home.

So, why the gradual (but massive) shift toward the gig economy? There are many reasons. The first, and possibly biggest reason is the freedom that comes with it. Freedom in this sense means not being restricted by one employer but also freedom to work from anywhere you may be rather than commuting daily.

Secondly, it saves an enormous amount of time. It is estimated that workers spend one-eighth to one-sixth of their days commuting to work. That time is wasted when it could have been utilized at work.

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It is much cheaper than hiring full-time in-house employees. This is due to the fact that freelancers are usually paid by their results. Hiring freelancers grants employers access to a huge pool of human resource that have a proven record of experience and not just well crafted Resumes. You get to assess the freelancer based on his portfolio or potential and not on their eloquence and charisma.

Obviously, there are many reasons for the up rise of the gig economy. However, if you are thinking that the gig economy is going to run out of steam soon, you may have to think again. The freelance space is growing by the hour, and it is evident that it has come to stay and conquer the human resource market.

Here are some statistics about freelancing in the US in 2016 by Ben Matthews (https://benrmatthews.com/freelance-statistics/):

  • There are 53 million people doing freelance work in the US – 34% of the national workforce
  • People who freelance contribute an estimated $715 billion in freelance earnings to our economy
  • Twice as many freelancers have seen an increase in demand in the past year as have seen a decrease – 32% experienced an increase versus 15% who have seen a decrease
  • 80% of non-freelancers say they would be willing to do work outside their primary job to make more money
  • Earning extra money (but not financial necessity) and schedule flexibility are the top drivers of freelancing
  • Finding work and, correspondingly, income stability are the top barriers to doing more freelancing work
  • 69% of freelancers said technology has made it easier to find freelance work
  • 77% of freelancers say the best days are yet ahead for freelancing
  • 65% said freelancing as a career path is more respected today than it was three years ago
  • 36% of moonlighters who have a primary job have thought about quitting to work completely independently

What do the above numbers really mean to you, an employer? A whole lot. In summary, your staff are gradually getting “tired” with the traditional “office” work. What struck me, personally, is the fact that per the speed of the gig economy coupled with advancement in technology, we should expect the numbers above to increase.

But, there is a huge opportunity in this for you, an employer in the United States, to use the gig economy to your advantage. Instead of employers “fighting” the gig economy, I believe they should embrace it for all the reasons above  – especially to save time and cut the cost of doing business. Freelancing allows employers to hire the best for less while paying only for individual jobs. This is the future of work in the United States, and companies are taking advantage of the gig economy’s power to change the face of the job market.

Dean Myerow
I am more complex than it appears. I am a Fox News watching Libertarian conservative that deeply values the idea of capitalism, Laissez Faire economics, and strong military. And on the other hand, my favorite book is Jack Kerouac’s On the Road, and my favorite music is the Grateful Dead. So reconciling, my conservative values with my counterculture roots is interesting . I enjoy taking long walks on Fort Lauderdale Beach with my Goldendoodles, Otis and Brady, when I am not actively working as a bond portfolio manager at Las Olas Wealth Management of Nat Alliance Securities LLC. I am a terrible golfer, who prefers the tennis court any day of the week. I am the lucky father of three teenagers and happily married for over 20 years.

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