The gig economy is a new term in town and it is attracting the attention of a lot of people. Many people are really curious about it. But it is an old concept and many people called it with different names over time. Like temporary work, agile workforce, freelance economy, and other names.
Some people consider it as a side business other than your regular job. You would also come across a lot of people that have left their highly paid jobs for the gig job because it isn’t stressful. Some people have become very successful at their gig economy work after leaving their job. Today we’ll discuss the gig economy, how the economy works, its pros and cons.
Table of Contents
What is the Gig Economy?
The gig economy is synonymously used for the free market. It’s a place where organizations and people hire temporary workers, freelancers, and skilled professionals on contracts for a short time. Linguistically speaking, people use work gig in slang for short term and temporary job.
Several factors are pushing towards the gig economy, and they’re playing a very important role.
For instance, the digital platforms and mobility of the workforce and they prefer to work remotely because it saves a lot of cost for both parties. It has created an environment where freelance can work on a project from everywhere without any location restriction. The employer would hire the best person for the job.
Factors like technology, digitalization, and the internet have reduced the total number of jobs. A single software has unemployed dozens of people and working efficiently. Other factors like there’s a plethora of financial and economic pressure on businesses to hire flexible workforce. Most importantly, millennials keep on changing their jobs throughout their lives. That’s why the gig economy is very important for them.
The gig economy is here because of the many changing businesses and cultural environment like the barter economy, sharing economy, and the gift economy. The socio-cultural effect has been changing consistently. The pandemic of covid-19 has also created a new culture, and it has also got a great influence.
Who is a Gig Worker?
If a project is profitable, then it would attract the attention of gig workers. He would create his schedule; select his working hours, and the completion date of the work. Now the question is who the gig worker is. A gig worker has the following characteristics, and they’re as follows;
Usually, the most successful gig workers have specific skills like writing, video editing, graphic designing, etc. They charge according to their skillset and the quality of work they produce. If a person doesn’t have a specific skill set, then he has no other choice but to accept the work at a minimum price.
The smart gig workers establish their own small business (LLC) and then move on to become a more legitimate firm. It means that they separate their business from the work. For instance, a separate business name and bank account from their asset. It helps them to save their assets in case of bankruptcy and legal issues.
A gig worker can’t become a successful earner without his clients. It could be individuals or a company and you charge them based on the work and order.
Gig workers work with various clients over time. Even their clients change from project to project. Business insurance helps them to cover their business and professional liabilities.
How Gig Economy Works
As we have established the fact that the gig economy comprises of short term work of small tasks. Those small tasks could be writing a code, typing a file, writing an article, getting the groceries, or fixing a picture. The gig worker takes the work as the whole project with a specific amount of money or he would like to be paid per hour. After completing the work, the freelancer works on the other project either with the same client or a completely different client.
The gig workers usually have two jobs, one is a traditional 9 to 5 job and the second is a part-time gig job. Their working schedule is flexible. Some freelancers also work on multiple projects at the same and make their gig work a full-time job. When they make it a full-time job, they have the flexibility to choose their hours.
In the traditional concept of economy, a company or an organization is the employer and providing jobs. But it’s not true in the economy. Some of the top companies in the gig economy are Uber, MechanicalTurk, TaskRabbit, and Instacart doesn’t employ anyone. Instead, they provide a platform both for the workers and employers to join and connect.
In the following lines, you can read the advantages and disadvantages of the Gig Economy for both the gig workers and companies provide the gig jobs.
Pros of the Gig Economy
Pros for Gig Workers
Variety of Work. The interesting about the gig economy for freelancers is that they don’t have to perform the same job every day. Every project they work on is different and every client is different. There’s a variety for gig workers in the gig economy.
Flexibility. The gig workers have the flexibility to work on the project or not, it’s their choice. They can work however they like. They can set their schedule and timing whenever it’s convenient for them. Ordinary employees don’t have the flexibility of choosing their schedule and timing. They have to perform the task whatever the boss tells them to do, whether they like it or not.
Independence. The gig workers have complete autonomy over the work and life. They don’t look at other people to do their job. They have the mind of solving problems by themselves, instead of asking other people for help. Every time they fix something, it boosts their morale and spirit. When it becomes their nature to solve different types of puzzles every day, it makes them independent.
Pay of Your Choice. Ordinary jobbers and employees work on a monthly salary basis. They can only ask for the raise, and they can’t demand it. The boss would increase it if he likes it, otherwise, you have to accept whatever they’re offering you.
The gig workers have the flexibility to charge price whatever they like. If they want to earn more money, then they have to work extra hard by taking on multiple projects. It’s in the hands of gig workers to raise their earning.
Pros for Gig Businesses
Divers Pool of Talent. Gig businesses and companies have the option to think outside of the box. They don’t have to pay extra money for it. They usually work online. That’s why they don’t have the location restriction, and they can hire people from anywhere across the world.
On the other hand, traditional businesses have a geographic restriction on recruitment. If they recruit people from other countries, then they have to incur a lot of costs.
Low cost. When it comes to the recruitment of people in traditional businesses, then it’s a very lengthy process for them and it costs a lot to the company. Even the establishment of the business itself costs a lot of money. It’s not only just a one-time investment, but there are also many variable expenses like rent, bills, and maintenance and you have to pay for it monthly.
The gig businesses have the lowest possible cost. There’s no recruitment cost, no establishment cost, and no rent, bill, insurance, health benefits, and other expenses. All you need is a computer to perform various tasks without incurring any expenses.
Scaling Capabilities. Freelance companies can scale their businesses much quicker than traditional methods. They don’t need a marketing department, office space, and equipment to plan and launch the campaign. They can do it with a single computer and word of mouth marketing on social media.
Cons of the Gig Economy
Cons for Gig Workers
No Health/Insurance/other Benefits. Traditional businesses provide you health insurance and other benefits. The freelancing work won’t provide you anything. You’ll keep on earning money as long as you work. Once you stop working, there’s no money at all, no retirement/pension or anything.
High Taxes. Freelance workers pay approximately 25 to 30% of their total earnings to taxes. It’s a huge amount if you compare it with the taxation of traditional businesses.
Isolation & Mental Health. The gig workers spent their whole life working in complete isolation. The lack of social connection and loneliness raises a serious concern about their mental health.
Stress. The stress level is also high in freelancing work because you have to meet deadlines every day. If you’re working on multiple projects, then the stress level would be even higher.
Cons for Gig Businesses
Tough Regulations & Contracts. The rules and regulations and the contractual agreements of the gig businesses are very tough and they usually vary from country to country. The government and the system provide safety to the gig workers in the gig economy. There’s a lot of paperwork for the gig businesses.
Not Reliable Workforce. It’s very difficult to find a reliable person in the freelancing business. You just can’t on them to deliver you the work on time. Sometimes they do, and the other times they won’t.
Examples of Gig Economy Jobs and Industries
Below is the list of gig economy companies where I also mentioned the related industries and types of gig jobs.
|Company||Industry||Based In||Gig Jobs|
|Airbnb||Accommodation||United Stated||Home owners can monetize their property|
|Amazon Flex||Delivery||United States||Licensed drivers|
|Care.com||Caregiving||United States||Certified caregivers|
|Etsy||Retail||United States||Handicrafts professionals & artists|
|Fiverr||Creative Services||Israel||Marketplace freelance services|
|UpCounsel||Legal Services||United States||Marketplace for legal services|
|Wag||Home Services||United States||Dog walking services|
Gig Economy Future
After a careful study of the gig economy, how it works, its pros and cons, and different types of jobs available to the gig workers in different industries. We have realized that the circumstances are pushing us to the gig economy. It’s completely possible under technological development and internet access worldwide.