, , ,

The Rise of the Gig economy

The Gig Economy is an economic trend that relies on freelancers, independent contractors, and on-demand workers. As more people leave the traditional workplace and as digital technology evolves the gig economy continues to flourish.

It’s not restricted to a particular field or country. In fact, many fields, some which may be surprising, are venturing towards the gig economy trend as the nature of work changes. According to a study by Intuit, 40% of American workers will be independent contractors by the year 2020.

 

gig-economy (1)

 

The Gig economy also goes by the names “freelance” and the “1099” economy.

Freedom & flexibility are two of the major draws that attract freelancers to working for themselves. But while the ability to work on varied projects is a highlight, the uncertainty of unstable income can be scary. Nonetheless, it seems that the pros outweigh the cons because freelancers benefit from being their own bosses and employers gain the privilege of hiring from a pool of top level independent contractors.

Th gig economy was born as an indirect side-effect to recession in 2008 which lead to people finding creative ways to make a living. As independent contractors have to work a variety of short-term projects this it has inspired many to capitalize on the nature of on-demand work.

As a freelancer, the gig economy can be extremely lucrative if you know how to go about things. However, it is essential to stay on top of trends and advances to find success in a competitive marketplace.

The gig economy works wonders for start-ups and small organizations helping them gain stability in often unstable fields.  It eliminates hiring & office costs as well as the burden of benefits (e.g. medical, travel, education) offered to full-time employees. And these savings can be translated into other financial resources and investments.

In short, clients can gain a lot from short-term commitments. According to the statistics of U.S Bureau of Labor, the trend of gig economy has risen by more than 65 percent.  But in the end, the gig economy comes across as a win-win situation for both freelancers and clients. We already discussed freelancer freedom and flexibility but clients enjoy short-term contracts & can hire their ideal freelancers. This makes it extremely convenient to pick the best of the best in the industry for a specific task.

 

Model of the Gig economy:

hf_138617_article

 

The gig economy has grown as a result of a digital revolution and peer-to-peer exchange. Many on-demand services rely on smartphones and capitalize on apps to make business transactions. It’s a drastic change from the traditional economic model because these products exist in the virtual world. For example, Uber and Lyft don’t own a single car, yet they have thousand of drivers under them who can take you to where you need to be. Additionally, Airbnb does not own any property of their own but can take care of most of your accommodation needs. And the list can go on, there are hundreds of startups and other on-demand employers who have found success with this model. 

The gig economy typically consists of two to three players:

  1. Providers
  2. Freelancers/contractors
  3. Clients

 

App based startups that offer online services pose as the providers e.g., Uber, Lyft, Buddytruk, Airbnb. They provide a platform that can be used by freelancers and customers. Freelancers offer their work and clients benefit from these tasks. As a temporary product-service market that lasts short-term, the gig economy is encouraged to diversify. Uber was able to convert its success from $60 million in 2011 to $60 billion in 2016!

Though there is much to be garnered from the gig economy it’s important to pay close attention to what it offers and what it doesn’t, so you can be well prepared for the future.

 

Pros:

Welcome-to-the-gig-economy

  1. You are your own boss:

Flexibility is the main draw of the gig economy. You can decide the pace of your work. You can accept assignments at your convenience and fulfill them according to your schedule. Vacations, breaks and sometimes even deadlines are under your control.

 

  1. You can work with diverse clients

The gig economy doesn’t limit you to a full-time company or a single boss. It allows you to work with diverse clients and gain loads of experience. Variety is one of the best advantages! Each project and client offer their own unique approach to the work, which inspires you to break away from a monotonous routine.

 

  1. You learn something new every day

A variety of projects and clients can encourage active learning. As each project demands something new, you need to stay updated and abreast to the latest trends. Most importantly, in order to acquire the best gigs on the market, you need to learn new skills. You must move with the changing trend.

 

  1. You can maintain work-life balance

     

The gig economy helps foster a healthy work-life balance. Because you work on assignments at your pace, you can dedicate time for other responsibilities. But it does not mean that your work projects don’t need to be completed with urgency, it simply means you can schedule them around your schedule. 

 

shutterstock_353435141-704x454

 

Cons:

  1. Income can be uncertain

Inconsistent work and cash flow are major factors that can dissuade many from the gig economy. Because there is no certainty with respect to projects and income, it can leave you feeling uncertain about the future. This makes it essential to save and manage your finances well.

 

  1. You have to deal with lack of benefits

The gig economy does not offer medical, health insurance, retirement plans or child education benefits. Roughly 55 million American freelance workers and independent contractors do not have retirement savings plans. Hence, as a freelancer, you must keep savings for the future or invest in an individual retirement plan.

 

  1. You have to manage it all

Freelancers have to juggle it all by themselves. If you are tired, overworked or sick you can’t depend on any other coworkers for help. You have to be able to manage all PR, HR & IT duties yourself. Working for yourself can also lead to feelings of isolation or boredom. In order to eliminate these troubles, you must change the ambiance of your workplace. Communicate with people around you, network with fellow freelancers, take breaks and find the time to recharge your batteries.

 

Undoubtedly, the gig economy is here to stay. By staying on top of recent developments, understanding the nature of the work and saving for the lean times, you can certainly enjoy the freelancer life. Here’s to the gig economy!

 

 

Image sources: crainsnewyork.com, rigzone.com, log.kurtosys.com, blog.line2.com, copypress.com, hacked.com
0 replies

Leave a Reply

Want to join the discussion?
Feel free to contribute!

Leave a Reply

Your email address will not be published. Required fields are marked *