The Gig Economy
Making Work ‘Work’ for You
There are countless studies that demonstrate that the nature of work is changing. Work is becoming increasingly precarious, but what does this mean? Does precarious employment imply doom and gloom or is there a silver lining for work that no longer fits traditional or conventional models? Is it a necessary evolution for the increasingly automated economy?
Precarious work is defined as non-standard employment that comes with low rates of compensation and limited stability, and often cannot solely support a household. There is no sense of permanence and workloads can vary from day to day, week to week, and month to month.
Alternative work arrangements in the gig economy come in the forms of contract employment, freelance work, on-call shifts and temporary agencies. From 2005 to 2015, the rate of contract workers grew from 10.1 percent to 15.8 percent of the workforce in the U.S., driven both by the market and by individual choice.
In 2017, there were 16.78 million self-employed individuals in the United States who either worked for themselves, were a productive member of a cooperative or served as an unpaid family employee. Men made up 65 percent of contract workers with 62 percent of contract workers under the age of 45.
According to a poll by NPR/Marist, one in five employed Americans are contract workers, a number that is expected to climb over the next decade. In the next ten years, it is expected that contractors or freelancers will comprise nearly half of the workforce across industries and sectors.
While many people still desire the consistency and security that a full-time 9 to 5 job offers, gone are the days of lifelong employment with a single employer where full benefits and retiring with a full pension is the expectation. Not in the gig economy.
Thanks to technological advancements like the internet, the global market economy can now be brought together to offer flexibility where job growth is taking place. While skill is always a necessary factor in securing work, as well as a strong portfolio, one of the best tools for contract and freelance workers is the internet which makes the pool of international talent accessible on a local level.
Call and video conferencing and cloud-based or digital workplace solutions have connected the global economy, which means that employees no longer have to work traditional hours, nor do they even have to be located in the same building, city or time zone. Many freelancers and contract employees maintain a strong presence online, marketing themselves on social media to ensure they are exposed to potential employers who are seeking out help online. While LinkedIn is a common place for networking to take place, opportunities present themselves on Facebook and other outlets as well.
For many, the freedom associated with the gig economy, contracts or freelance work is second to none. Being able to work flexible hours from the location of your choosing, be it home or the neighbourhood coffee shop, as long as your work is completed on time and to standard, has great appeal. There are countless freelance websites that serve as a platform for temporary employees from all industries and sectors that link prospective employers to the pool of available talent. Freelancers can price their services competitively and can be hired when required, making it a highly competitive market.
When someone works from contract to contract, or on a freelance basis, while they benefit from the flexibility of scheduling, the freedom from a commute to the workplace, and the ability to work from the comfort of home, the inconsistent work, pay, lack of benefits, lack of retirement pension plans, and the stress of constantly needing to secure work is certainly a trade-off.
What should be noted is that more than half of contractors or freelancers don’t receive benefits, including employment insurance and health insurance. Women are especially vulnerable during the child-bearing years as there is no maternity leave or maternity pay to rely on in many cases. Having no benefits like health insurance or retirement savings means there is no time to deal with illness and no time to waste being off work. In these situations, added stress can also be placed on public safety nets where budgets are already strained, such as healthcare and programs for low-income retirees.
The inconsistencies associated with the gig economy can wreak havoc on a person’s psyche, as there can be constant worries related to being able to afford monthly expenses or securing work to be able to meet financial obligations. Budgeting is a very critical skill for those who undertake contracts and freelance gigs. There is also no sense of workplace culture and freelance or contract employees often feel disconnected from their peers. Full-time employees who are always on site gain a sense of cohesion with their peers in the workplace and identify with the company and the brand more easily.
Another reason contract and freelance employees can feel a sense of detachment from a company’s culture is the fact that the achievements and milestones of the full-time employees are regularly recognized, while their contributions are rarely acknowledged. Where there is no room for career advancement, it is hard to remain motivated. Given the structure of employment in the gig economy, contract workers and freelancers may never achieve the same kinds of success as their full-time peers. While they are a necessary part of value production, their value is often overlooked.
There are also challenges for employers when relying on alternative work arrangements with employees. Temporary employees are not loyal to one employer and are constantly staying abreast of opportunities that present themselves in the market.
However, one of the greatest benefits derived from this new flexible work structure for employers is the ability to hire freelance and contract employees to test them out to ensure they are a good fit for the company before hiring them on permanently. This is the only hope for a temporary position to become more secure.
Contract and freelance employees are likely to push themselves to the limit, undertaking as much work as their schedule and their sanity will allow, especially given the inconsistent workloads and thus, pay, month to month. In situations where freelancers overwork themselves, burnout is a very real concern.
It seems the future of the labour market will see a continued increase in contract and freelance work arrangements and the precarious conditions that result for employees. These conditions of work come with benefits and disadvantages and for many, the risk is worth the reward and they are able to provide a comfortable life for themselves.
There is no shortage of opportunity and potential in the gig economy for employers and employees alike, though it may pose a challenge to social institutions and individuals who are unable to provide health insurance and retirement plans for themselves and will require assistance to do so.
It will be interesting to see how these trends will impact the social and economic infrastructure but in the meantime, it seems like a dream for many: setting your own hours, your own work pace and workflow, having flexibility and diversity in projects, often in the comfort of home. The tax write-offs aren’t too bad either.
Contract employees and freelance workers will soon outnumber secure full-time positions and will be a critical part of adapting to an increasingly automated future. The flexibility the gig economy offers enables employers to scale up and down when necessary to remain as competitive and as profitable as possible while ensuring service levels are sustained.
While many industries that required skilled labour are struggling to find experienced and trained employees, the contract and freelance labour market is burgeoning and is changing the nature of work as we know it. The gig economy makes work ‘work’ for the ever-evolving economy and is changing the status quo; it’s just too soon to tell what the implications will be.