Understanding Gig Economy

Up until recently in many places of the world, it was a badge of pride to have your parents and relatives retire from the company that they first joined as youngsters. Working for decades together in one company had its own advantages- for one, it meant the company survived and another, your work was valued, and you were not laid off.

Cut to today when changing jobs is the norm and is considered by many as a mark of your growth.

Barring a few who choose to make their careers and steadily move to the top in a company, several workers today prefer to move out for many reasons. It could be because they feel saturated in a company, because there is no scope for the top position, no learning opportunities or simply because changing jobs is the only way they can see a considerable hike in their salary.

But over the past few years, a new kind of workforce has emerged the world over.

These professionals do not prefer to work for one company at a time and rather freelance at many companies.

They also come on board one company for a particular project and leave once the work is over.

Take the cab hailing services, for example. 

The business model of companies like Uber is entirely based on gig workers and not permanent employees. Interestingly, if the Gen-x were tech literate and thrived on teamwork, the subsequent generations, the Gen Y and Gen Z looks at work to live, not the other way round. Their preference and priorities are different from the earlier generations. They also want to upskill themselves, opt for change to grow, look for work life balance and can manage to work from any place, not just the office. 

The pandemic provided just the right time for gig workers to prove their worth and more and more got added to this tribe in the past two years. 

Who are Gig workers

They choose to work from remote locations many times, are not permanent employees, freelance or focus on completing one task on a project and are considered temporary in official lingo. 

It’s a free economy wherein companies and workers enter into a short-term work assignments for specific work specifying the duration and nature for which their services will be required and the monetary compensation for the same. 

An Intuit report of 2020 says that 20-30% of the workforce in the US alone comprises of ‘giggers’. An estimate pitches the global gig economy to have reached 347 Billion in 2021. 

Why are Gigs preferred

Short duration work or gigs are the preferred way of work for people for several reasons. Some of them include: 

  1. The advent of technology in the 2000s meant that a person need not be physically present at the office for work to get done. With a computer and internet access, work can be done from any place in the world. 
  2. Gig work saves the hassle of long commutes for people who love to stay home and not migrate to the crowded cities
  3. It gives them the flexibility to choose their work and pace and stop when they don’t want to.
  4. Several people who have experienced burn out in their regular jobs prefer gig work that allows them to enjoy other aspects of life caring for babies or elderly, pursuing a hobby or even higher education.
  5. A large number of youngsters today like to direct their own lives and not be at the mercy of those who run the company. They are self motivated and know how to utilize their skills
  6. Opportunity to work in diverse sectors and industries with exposure to new practices and understanding of enhancing skills. 

How Can Companies Benefit from Gig Economy 

Companies stand to gain more from gig workers because: 

  1. They can fix the gaps between permanent employees and the skills needed for new kind of work without hiring additionally
  2. They don’t have to pay the welfare benefits that are mandatory for regular employees
  3. Hire when needed or contingency hiring allows getting the best talent on board only for the duration of the project.
  4. Regular HR functions like employee engagement, appraisals can be eliminated
  5. Working online means your work can be done 24/7 with people working from across the globe in several time zones
  6. Focus on a single project and hence adhering to tight deadlines is possible

As with the pluses, there are also the drawbacks for companies. Work culture which develops over long time does not come into picture. Transfer of knowledge to other co-workers in nearly impossible and use of their own devices from their place means exposure to cyber-security risks. 

Despite all this, gig workers are having a field day and more and more people are joining this workforce as consultants, freelancers, independent contractors or temporary staff. 

It is especially viable for skilled personnel in finance, technology, media, ed-tech or super specialty skills. Weighed against the benefits that this flexible work offers, it looks very attractive for people to work when they want. 

Obviously, this arrangement has been a boon for women, with the US economy alone comprising of 55% women in its gig workforce. In the past two years of the pandemic, a wave of resignations has swept the world and more and more people are opting to work on their own terms from places of their choice. 

The pandemic has brought the focus back on mental health and work life balance and made people prioritize their lives. 

Naysayers argue that they lose out on job security and the benefits of having a permanent job, including health benefits provided by the employers along with a host of perks. But their counter argument is that they also get to enjoy life better on their own terms. 

The past few years have proven that job security is a thing of the past. It will only be our skill and relevance that will take us forward and not our commitment to a regular job. 

 

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