Swot analysis of gig economy. The “gig economy” or skill-based economy has its roots in history and it’s much older than people think today. The jazz musicians first coined the term in 1915 by referring to their stage performance as the gig.
The gig economy has taken a new turn in 2009. When digital platforms started connecting freelancers with potential clients and employers on a short term and temporary basis. It has been working all along in the background throughout the whole time.
But the pandemic of covid-19 has pushed the gig economy and it would amplify its growth in the coming years. The growing trends are attracting more people towards it and it’s getting stronger over time. The online workers and freelancers are very optimistic about the gig economy.
Today, we’ll discuss the swot analysis of the gig economy. How different trends are impacting their growth and productivity. How the gig economy can use its strengths to capitalize on opportunities and avoid weaknesses and threats.
Here’s the swot analysis of the gig economy;
Strengths of Gig Economy
One of the best things about the gig economy is that it creates a lot of employment opportunities. The recruitment of permanent employees is a difficult step for companies to take. Businesses and companies have no problem with hiring temporary and short term employees.
Whenever they need a specific skill set of people to complete certain tasks, then they keep on hiring them as per their needs. You just have to create an on any of the freelancing platforms and hire the person of your requirements.
Skilled Professional hard to find
When you’re precise about a certain task and skill in a certain category, it would be very difficult for you to find the exact match of your requirements. The digital platforms of the gig economy provide you to hire people without the restriction of the location. They’ll work for you fully remotely and you won’t have to maintain an office work environment for them.
Work with Professionals
Whether we talk about finding a certain professional in a certain category of a certain industry, you can easily find them. Or you can work alongside them. You can attract them by offering them more opportunities.
Improved Financial Performance
According to an estimate, 75% of the recruitment executives consider the gig economy as the work of skilled professionals. 62% of the executives consider that the professionals of the gig economy uplift the financial performance of the company.
It’s true that when a skilled professional of the gig economy work for a company and utilize their skill. They amplify and increase the financial performance of the company.
The gig economy provides flexibility to both freelancers and companies as well. It’s one of the great strengths of the gig economy. The flexibility means the remote work location, working hours of your choice, and however, you choose to work. The employer wants to hire skilled professionals and completion of the work on time. The gig economy provides the employer what he wants and the freelancer would get whatever he earned. It’s a win-win -situation for both parties.
Weaknesses of Gig Economy
No Teamwork and Mentorship
One of the major weaknesses of the gig economy is that it lacks the traditional physical workplace environment. You won’t find supervision, mentorship, social connection, training and development, and teamwork.
According to an estimate, 28% of the work in the gig economy is fully exclusive. 50% of the people in the gig economy work remotely without any connection.
Some fields just don’t fit with the criteria of the gig economy. Therefore, those opportunities would remain unfulfilled due to the market, workplace, or some other factor. In other words, we can say that the gig economy has limited career opportunities for those who fit its criteria.
As we know that the gig economy works based on working fully remotely. When people work in complete isolation over some time, it leads them towards depression, mental fatigue, and anxiety. When we talk about the gig economy of the whole country, then we’ll the working-class people without any support. Therefore, it has sustainability issues in the long term.
No Standard Rules
We have established the fact that people work remotely in the gig economy. They’re from everywhere in different markets with different rules, regulations, policies, and political environment. When we talk about the work, there are two things; skillset and safe practice of the work.
This problem potentially would rise in the future. It’s because the gig economy is growing in a direction where there won’t be any standard rules. It would result in the form of mismatch between the work practice and skill set.
Opportunities for the Gig Economy
Participate and Compete
The thing which is missing in the current economic system is equal opportunity for everyone. The gig economy has removed the restriction of location. Now everyone can participate and compete in it based on one’s skillset and expertise. It’s because of this factor the gig economy has been very influential and it has attracted the attention of a lot of people worldwide.
The freelancers usually have the knowledge and expertise of their field. They can guide the potential client better and provide them viable market assistance into it. It helps them to build a long term relationship with clients. The clients would get a skilled professional without much difficulty.
Artificial Intelligence (AI)
The machine learning and AI (artificial intelligence) is the latest tech addition in the gig economy. It would bring many opportunities along with it. Those opportunities would comprise of maintaining the efficiency of AI power machines. Businesses and companies would hire people that could do AI machine tasks. It’s a unique skill set, and it would push the growth of the gig economy to a great extent.
Threats to the Gig Economy
No Regulations until Recently
As we’re aware of it that freelancers work independently, and there are no rules and regulations for them in the gig economy. Reason businesses and companies hire freelancers are because of many reasons. Like there is a limited cost of hiring them, no training and orientation session, and you don’t have to pay for the health insurance as well.
Legislation & Restrictions
But some states and countries have started regulating the gig economy by classifying the workers and work type. If it continues like this, then we’d see a lot of restrictions in the future. It would define the kind of people from certain markets that have permission and the others don’t. If it happens, then businesses and companies would become very careful to look outside of their box.
If the government imposes restrictions on the recruitment of people from a certain market, it would result in the form of market disequilibrium. It would pose a serious threat both to the skilled professional and the companies. As a result, the growth of the gig economy would slow down to a great extent.
The other reason the government is trying to regularize the gig economy is to introduce taxes for freelancers. It would create a lot of complications because the administrative cost and taxation cost add up together. It would also slow down the growth of the gig economy.
After an in-depth study of the swot analysis of the gig economy, we have to understand the gig economy has got a lot of opportunities for everyone. But the threat of restrictions and legislations are also real.