Rise of the Gig Economy
Gig economy: The traditional workforce strategy was already experiencing a major shift due to innovations in technology. E-mail, the internet, and telecommunication methods of communication made it easy for message flow. Now, the pandemic has made us reliant on these methods for effective operation strategy of the business with social distancing. There is a rise in the gig economy making people free from the necessity to rely upon traditional hour-based jobs. This increases the scope for a creative and skilled workforce to complete a job whenever or from anywhere he can.
Irrespective of the regular economy trend of contracts and full-time jobs, the gig economy is a market full of freelance jobs. Today freelance jobs extend to driving a vehicle, delivering food, technological support, street performance, etc. The primary difference is an individual commit on a shorter-term or project basis and does not oblige to work for an organization for the long term. One type of group works for 6 months on a project basis and enjoys the rest of the year traveling. While another type of group performs these jobs to supplement their income on top of their regular job. Whatever the case, the gig economy is largely increasing and providing new opportunities for people who would like to have an extra income.
One of the reasons for the upsurge of the gig economy can be the great recession during 2008/2009. During the aftermath of the recession, people started to realize that having only one source of income can be troublesome to them as many people lost their jobs. This also gave rise to the concept of mini-jobs apart from regular jobs to increase income.
This is also a reason for advancements in digital technologies as people were exploring new opportunities. When technologies started making things simpler and the rise of Uber, Airbnb, and freelancer dot com, it became attractive to creative people for offering their services. The outsourcing of jobs and support services to provide quality and 24-hour service is another reason for the incline of the gig economy. On top of that, there is SEO, websites, Application building, data mining, data entry, surveyor, and interviewer for HR as widely available jobs. In Nepal, Pathao, Tootle, Hoop Rides, Filili, etc. are contributing to the gig economy. Whereas, Bhoj, Foodmandu, and Fooddole provide food delivery services.
Why gig economy is in the rise?
Gig economy conveyors allow consumers to be in direct contact with suppliers. For example, Uber drivers get signaled when passengers close by request for a ride. Airbnb allows customers to find a house instead of hotels close to the location they are traveling. There are no large middleware costs associated with the arrangements and it is a win-win situation for all.
Contactless food delivery, medicinal home deliveries, online teaching are some examples that started as an easier solution to people. However, this looks to be a necessity for the post-pandemic period to ensure the safety of generations to come. The delivery workers have put a step forward on the time of their own using preventive measures to deliver food, medicines to the people in need during a lockdown. It has helped people to run their businesses and it is, indeed, a good thing.
According to Forbes, independent of the pace for worldwide acceptance of the gig economy globally, it is projected that by 2030 gig workers will comprise 80% of the workforce.
The gig economy has empowered millions to work at their own time. There are many benefits of the gig economy.
- Depending upon the nature of the project or job commitments, people can find jobs regardless of their skillsets. Most of the jobs have very low barriers or no skillset requirements at all.
- Increases quality of life as adjusting work-life balance becomes easier.
- The flexibility is high with when to work and how long to work.
- There is a choice upon the kind of projects or work to take on.
- Some of the services or jobs do not require any contact but only the communication and internet. This provides an easy way to work from anywhere around the world.
- Passionate and motivated hard workers can generate more income and also explore their knowledge in case of work on projects in their field.
- It is not just an advantage to workers but is an economical investment for companies.
Challenges of the gig economy
- Gig workers are not like full employees, limiting them from retirement benefits, health insurance, appraisals, etc.
- Some gig workers are underpaid more than the minimum wage assurance due to competition in the market to get the job done quickly, which is unethical.
- Sometimes, the companies may delay or stop payments which assure insecurity in the economy.
- As some gig workers accomplish the requirements of multiple projects at a time, the quality of work received by the employer is not guaranteed to be of a higher standard.
- Also, it is a challenge to stop the exploitation of gig workers by organizations whose requirements keep changing.
- The quality of life of gig workers gets exploited as the need or greed for extra income becomes uncontrollable.
- The gig economy also puts some full-time job holder’s employment at risk as organizations get more attracted to gig workers.
- Making policy and procedures for fair, ethical, and transparent working environments.
- It is also a challenge for the organization to get the right match for the jobs they are outsourcing.
The gig economy is a win-win situation for the organization and the workers. Companies do not need to hire for the sake of one-time jobs and drastically reduce costs by advertising to interested candidates. Workers on the other hand are liable for the quality and the completion of the project and do not have to miss their family time. Moreover, they have a choice to work or not with their current employer again in the future for similar jobs.
The platforms providing organizations like Uber, Airbnb, Deliveroo, Fiverr, and amazon provide these services of connecting two parties with minimal service fees and are the most profitable companies in the world. In fact, organizations are interested in providing these services themselves to reduce their costs and increase their service standard.
This shows the importance to start making hierarchical and workflow structures. There needs to be a way for organizations to accurately measure the progress report of the task as gig workers may be working in their free time. This can reduce an issue or conflicts over the completion of a job. The gig economy should work in reducing the complications on the regulation of ; product to market, competition policy, tax, and labor-market policies. Like, the drivers for the ride-hailing app were found entitled to benefits like paid holidays, minimum wage, and pensions in the UK. Likewise, Spain is approving a new law to categorize gig-economy riders as wage laborers.
How to proceed?
Independency, flexibility, and non-monotonous are the words in use by gig workers as the reason for satisfaction in their jobs. Meanwhile, these are the terms that full-time employees bargain for dissatisfaction in their jobs. There is both an advantage and disadvantage to the gig economy. Due to the large growth of this economy, many countries are making policies to keep this economy under control. Not just because of the economic scale; but to prevent gig workers’ exploitation and make fair and ethical working conditions for all.
These policies address hours of engagement, paygrade, withdrawal clause, code of conduct, intellectual property rights, software/hardware support, method of payment, review mechanism, timesheet and compensation, and terms and conditions to ensure the transparent way of project completion.
Recent surveys and studies indicate that the workers with no interest in the gig economy are losing on good resources and opportunities. The requirements of organizations to become more agile and streamlined to outstand their competitors also call for the necessity of the gig economy. It changes the dimensions of the nature of work, employers, employees, and the location of the work. In recent times, it can be certain that this economy is not going to fade away. Nevertheless, the approach for talent acquisition requires amendments.