If you’re like most HR managers, over the past few years you’ve noticed a change in the kind of talent that has been coming in through the normal channels. Your team may even be falling short on hiring goals because great talent simply isn’t looking for full-time jobs through normal channels anymore.
What is the gig economy?
The gig economy, or freelance economy, is a term used to describe the type of work that people do on a freelance basis. Workers are often hired on an as-needed and short-term basis to complete specific projects or achieve a desired objective.
Oxford Languages describes the gig economy as, “a labor market characterized by the prevalence of short-term contracts or freelance work as opposed to permanent jobs.” The key element to the gig economy is that these are not your typical full-time, or even part-time hires.
The gig economy is evolving.
A poignant question at the heart of the gig economy revolution was posed in a recent Forbes article: “Are we selling labor or outcomes?”
This question addresses why structural changes are emerging and evolving in labor markets. Do we need people to work jobs and do labor? Or do we need people to get certain tasks done for us? Are these two things different? We are barely on the brink of discovering answers to these questions, and the answer is emerging through individuals making choices about how they want to work and companies making choices about how they want to hire.
The gig economy is becoming more popular as many people are choosing this lifestyle — and it’s not just millennials. Many companies have embraced the gig economy by hiring contractors instead of full-time employees so they can save money and avoid paying for benefits like health insurance, 401k contributions, etc.
This digital transformation and evolution has given credence to new business models like Uber, Doordash, Handy, and more, in addition to providing freedom and flexibility to many highly-skilled workers who have a new-found leverage in the labor marketplace.
Freedom and flexibility are driving the gig economy.
Some of the world’s top talent have opted for freelance work over full-time work. In many cases, they have chosen freelance work because it allows them to travel and explore new opportunities.
Studies show freelancers can get more satisfaction from their freelance career than full-time employees since they can do what they want, when they want — provided the work gets done. In exchange for more freedom, many people willingly choose to work at deliverables and outcomes rather than clocking in and out to get paid.
A survey done by financial services provider, Payoneer, found that “flexible hours and the freedom to work from home were the top reasons for freelancers’ high satisfaction,” and showed a job satisfaction rating of 4.1 out of 5.
What has caused the shift into the gig economy?
There have been a lot of changes over the past 20 years in how people are working. There are three main reasons.
- The rise of the internet and digital technologies has made it easier for people to work remotely.
- A shift in demographics, from baby boomers to millennials.
- An increase in unemployment rates during economic downturns.
The transformation began when technology made it easier for companies to hire freelancers and businesses were able to expand globally with less overhead. This led to more competition and gave top talent more say in how they wanted to work.
While millennials aren’t the only group working as full-time independent contractors, they are the largest out of Gen X, Millennials, and Boomers. In 2019, Millennials surpassed Boomers due to Boomers starting to age out of the workforce.
The gig economy has been steadily growing since the early 2000s, in part due to the 2008 financial crisis. The unemployment rate was at an all-time high and many people were turning to freelancing jobs or side gigs as a way of making money.
There’s been a shift in how people work and live their lives.
The COVID-19 pandemic transformed not just work — but our lives. In 2020, with the global pandemic and work-from-home becoming a mandatory state, we saw an increase in demand for gig workers. We even saw companies like Twitter opting to make work-from-home a forever option.
A recent Forbes article on the effects of the pandemic on the gig economy describes that “traditional employers may need to adapt and offer increased flexibility to full-time employees who have become accustomed to more flexible gig work arrangements during the pandemic.”
Is the gig economy going anywhere?
With technology continuing to advance at an exponential rate, the gig economy isn’t going anywhere. There will likely be more and more people who choose this type of work in the coming years. In fact, there are those who predict that by 2023 more than half of the U.S. workforce will be freelance workers.
Freelancers are now the norm.
Freelancers are more common than ever before. Many individuals are turning to freelance work as a “side hustle” in order to supplement their income or break into new industries, but most freelancers have made this type of work their primary source of income.
It’s time to embrace the future of work. If you’re looking to hire top-tier freelance workers, check out our recent article about our favorite freelancer platforms where you can find quality talent.
When it comes to hiring the quality talent you find, your workers will be ready to get to work in minutes with GreenLight’s intuitive, automated onboarding. Our mission at GreenLight is to remove all the friction caused by working with flexible talent. Our infrastructure solution is designed for the Freelance Economy — all you have to do is find the right person for the job, and we’ll take care of the rest.
Schedule a demo with our team today so you can start mining the gold of the gig economy.