HR Management & Compliance, Recruiting

Understanding the Gig Economy and How It Impacts Your Company

Ready or not, the gig economy is already here. And there is no longer any doubt that it will impact your organization’s workplace culture in one way or the other over the coming years. Keep reading to learn more.

gig economy

Source: NicoElNino / iStock / Getty

What Exactly Is the Gig Economy?

The term “gig economy” refers to a labor market that is characterized by the prevalence of short-term contracts or freelance work as opposed to permanent full-time jobs. Workers in a gig economy seek out “gigs” which are usually contract-based or project-based to earn their income, as opposed to traditional salaried roles and full-time employment with one organization.
The gig economy really started to take off during the Great Recession of 2008, when college graduates couldn’t find full-time employment because of hiring freezes and scarce opportunities, as well as the growth of Internet-based commerce, e-mail, and cloud-based platforms during this same period.

Stats About the Gig Economy You Should Keep in Mind

As you work to accommodate the changes and environments inspired by the gig economy, here are statistics you’ll want to keep in mind.

  • 57% of businesses are saving costs by using free agent talent and freelancers.
  • 92% of Millennials want to work remotely, and companies can benefit by saying yes to offering more gigs.
  • 42% of both large- and mid-size companies use contingent workers or freelancers to meet seasonal demands.
  • 36% of businesses use gig workers for the timing benefits.

(Source: Forbes®)

Who Participates in the Gig Economy for Work?

Although the Bureau of Labor Statistics has acknowledged challenges in counting the exact number of independent contractors and contingent workers in the American workforce, Intuit estimates that “gig” workers represent 34% of the workforce and will grow to be 43% by 2020.
And while those percentages include mainly Millennials (those who were generally born after 1980 but before the 2000s), they are also beginning to include a larger number of Baby Boomers (those who were born between 1946 and 1964). Why?
Because Millennials now make up a majority of the overall workforce according to Pew Research, and Baby Boomers are beginning to look for more flexible work options and supplemental income as they begin to retire and start leaving the workforce altogether.

What Industries or Types of Businesses Should Participate in the Gig Economy?

Because retailers tend to hire a large number of seasonal and part-time employees, they can greatly benefit from hiring freelancers and contract-based workers leading up to and during holiday seasons.
In addition, globally based businesses that have multiple offices in multiple time zones can also benefit from gig workers who are already accustomed to working remotely with different time zones. And small- and medium-sized businesses that can’t afford to hire a lot of full-time employees can also greatly benefit from hiring freelancers and contractors for larger projects and outsourced tasks.
In tomorrow’s post, we highlight more information you need to know about the gig economy and how it can impact your workplace and workforce.