Everything you need to know about the Gig Economy
The future of work is being shaped by a powerful force, i.e work and workforce models designed to drive efficiency are quickly giving way to an on-demand model. With the hyperspecialization of work today, coupled with the shorter duration of project assignments and increasing industry competition, the ability to scale at will is necessary to be competitive.
While we have been witnessing a change to the gig economy for the last decade globally (and in bits and pieces locally), it has begun to accelerate rapidly, possibly to the tipping point due to the unprecedented times forced upon us and many industries due to the COVID-19 pandemic.
With this, we've seen the rapid rise of the gig economy.
What is the gig economy you ask? A gig economy is a labour market characterised by the prevalence of short-term contracts or freelance work as opposed to permanent jobs. The gig economy gets its name from each piece of work being akin to an individual 'gig' – although, it has previously been called the "sharing economy" — mostly in reference to platforms such as Airbnb — and the "collaborative economy". However, at its core are app-based platforms that ring out work one "gig" at a time, such as making deliveries, driving passengers or cleaning homes — leading some to prefer the term "platform economy".
Who is a gigster?
Gig workers are independent contractors, online platform workers, contract firm workers, on-call workers and temporary workers. Gig workers enter into formal agreements with on-demand companies to provide services to the company's clients.
Are all gig economy rolls tech-based? Not all gig economy roles are based around a technology platform. Gig economy workers can also work for more traditional companies that have evolved how their staffing system operates.
drivers for clothing shops, for example, also work on a piece-by-piece delivery basis, though their employer does not have the tech startup origins often associated with this type of work. So the tuk-tuk driver down the road who chooses his own hours and when to work can also be considered a gigster as he works on a piece by piece or hire by hire model.
Are gigsters primarily freelancers? The gig economy is based on flexible, temporary, or freelance jobs, often involving connecting with clients or customers through an online platform. With platforms such as Fiverr, Upwork, Truelancer, Guru, etc we've received access to a lot of freelancers that are cheaper and faster than working with most high-end agencies. However, when you really think about it - any boutique marketing and communications agencies (for example) too works within the gig economy and thrives! With the appeal to consumers and changes in many consumer industries, the gig economy has forced larger agencies to change and reconsider their costs and approach to work; placing boutique agencies in a far more positive light - as they offer more efficiency and lower cost.
The Gig Economy in the US
According to Accenture, it’s predicted that 43% of the United States workforce (60 million people) will be contingent by 2020, which is roughly four [04] times the number of contingent workers in 2015 (15.5 million).
The Gig Economy in the UK
The Chartered Institute for Professional Development estimates that there are 1.3 million Britons employed in the gig economy.
Gigster employee rights?
Whilst being part of the gig economy may seem interesting, cool and like you can set your own hours, it still has its fair share of issues. Not only do workers lack protection and fair pay, but the roles aren't as flexible as they seem, as workers are incentivised or pressured to work only when a company may need them.
In addition, workers do not receive benefits such as holiday or sick pay, and reports suggest some aren't making minimum wage - which is legally possible as gigsters are considered contractors — rather than employees.
Growth in Sri Lanka An article in The Economy Next states that "the most ubiquitous gig services in Sri Lanka are taxi app and food delivery platforms of Uber and PickMe. Elsewhere in Asia, all sorts of services are on offer, from booking a homestay, finding a handyman to learning a language. The gig economy’s potential is only just getting tapped.
Adding to this we've seen a large portion of the population, particularly in the commercial districts and densely populated neighbourhoods getting into their own version of the gig economy.
Whether you consider them cloud kitchens, home cooks/ bakers or housewives using their skills to get a foothold in the market - we're seeing a rise in the food industry.
What we should be mindful of
The gig economy just like any other career path or workforce format needs to be entered into after serious consideration.
With so many gigsters providing services and products via platforms such as facebook, Instagram, twitter and whstapp (let alone Uber, Ubereats and PickMe) - where does quality in product and safety play a roll?
How do you filter through the millions of gigsters at your beck and call?
How does this affect taxation - particularly withholding tax and income tax?
Does the government need to consider regulation for these gigsters?
When should you make the shift from gigster to business owner/ entrepreneur, or should you make the shift at all?
Are you truly able to use your skills to make being a gigster a lucrative career path? Or is this temporary until you find a 9-5 with a guaranteed salary?