HR Management & Compliance, Recruiting, Talent

The Pros and Cons of Utilizing the Gig Economy

Yesterday’s post highlighted some important information and statistics you should know about the gig economy. Today’s post will highlight the benefits and downsides of the gig economy you’ll want to consider, for both employers and gig workers.


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Benefits of the Gig Economy for Employers

As an employer, you can save money when you hire gig workers. You won’t have to pay health benefits or overtime wages. And you won’t have to pay salaried rates. Instead, you can pay workers based on the projects they complete or on the number of hours they work on those projects.
In addition, employers can save a lot of time and money outsourcing one-time projects that need to be completed instead of having their full-time employees take on the extra work.
For example, a one-time website content project can be outsourced to a highly skilled and highly rated website designer. And holiday promotional materials can also be outsourced to freelance marketers and graphic designers, so your marketing team can continue to focus on their everyday marketing tasks.

Downsides of the Gig Economy for Employers

If employers don’t properly vet their freelancers, they could end up with unskilled freelancers who don’t submit high-quality work or who aren’t reliable and always miss deadlines and project goals. Or employers could wind up with too many freelancers focusing on too many tasks and projects simultaneously, which makes things much harder to manage, especially if the freelancers aren’t required to work together.
In addition, some freelancers might ignore contract terms or opt out of contracts before long-term projects are completed, leaving your organization with uncompleted materials and work that you can’t use, especially when projects and contracts include copyrighted materials owned by the freelancer or noncompete information that can’t be leveraged with other entities or new freelancers.

Benefits of the Gig Economy for Workers

Gig workers like freelance and contract-based work because they can typically select their own hours and working conditions, and they also reserve the right to “fire” their clients when they aren’t being treated fairly (such as not receiving payment within predetermined time frames) or when their clients aren’t meeting guidelines and other terms outlined in prenegotiated contracts and other legally binding documents.
They also gain opportunities to learn new things on a rolling basis and can leverage multiple talents at once.
For instance, a freelancer might elect to work on a website project that requires his or her design skills, content writing skills, and coding skills simultaneously. And this means that freelance work is rarely boring or mundane for the gig worker and can cater to what each individual freelancer is skilled at and enjoys doing.

Downsides of the Gig Economy for Workers

Oftentimes, newer gig workers must accept lower rates to land projects and contracts in their respective fields. They also don’t often know their legal rights and obligations. And they might end up completing work that is never paid for when they encounter irresponsible or negligent clients, or clients who end up filing for bankruptcy or suddenly shutting down their operations.
In addition, they must be highly skilled at time management to juggle multiple jobs for multiple clients at once, and financial management, because they need to constantly make sure they get paid on time and that they can pay their own operating costs.
Keep the information outlined above and in yesterday’s post top of mind, as it’s important to understand the ins and outs of the potential impacts the gig economy can have on your organization and its workforce.