If you work in the business world, you will likely hear the phrase ‘gig economy’ used frequently in recent years. The rise of the gig economy is set to have a big impact on how businesses are operating and how individuals are working for years to come. Understanding the gig economy enables you to better gauge what the working environment of the future will look like.
What is the Gig Economy?
The term gig economy is used to describe the labor market characterized by short-term contracts and freelance work, rather than permanent jobs. Increasingly companies are operating within the gig economy, hiring independent contractors and freelancers rather than hiring full-time employees. This undermines traditional structures as it no longer focuses on full-time employees who are looking to work and develop their careers in one organization.
Understanding the Rise of the Gig Economy
The rise of the gig economy is down to one thing: the rise of technology. Technology makes it easier for workers and businesses to connect, regardless of location. Access to technology has enabled individuals to take more control over the work that they choose to do. For example, delivery drivers can now choose when they work, what they are paid, and the truck loads they want to take, thanks to sites like https://www.shiply.com/us/truck-loads. Creatives no longer rely on agents to win the big contracts as they can use platforms like Behance to connect directly with customers.
However, technology is not only increasing the possibilities for workers but businesses too. Digital technology and communications tech mean that companies are no longer restricted to geographical constraints when looking for staff. This means that business owners can find the talent they want at the price they desire much more quickly.
The influence of technology seems to have combined with other recent events to solidify the gig economy’s rise, namely, the COVID-19 pandemic. The pandemic transformed the way that many businesses operated and showed the value of a remote working model. As many businesses look set to continue with a remote working model full time, the need for a consistent on-site workforce is further reduced. This again increases the benefits for businesses in the gig economy.
What Effect is the Gig Economy Having?
The gig economy is increasing the possibilities for both workers and businesses. This is because individuals can regain some control over the work they are doing and, therefore, more effectively steer their professional progression.
The gig economy has enabled businesses to run more efficiently and often reduce operational costs. As more businesses are able to access talent and expertise when they need it, businesses can experience increased flexibility. While the rise of the gig economy does offer distinct benefits, it is not without its downsides.
The gig economy increases the amount of competition for work, which means that workers are often paid less than they might otherwise be for work. In addition, the flexibility of the gig economy means that it can be difficult for some individuals to retain financial stability. The gig economy can also directly affect individuals who are working full time in a business. Specifically, traditional career progression is being affected as it is easier and more cost-effective for a business to hire gig workers rather than train internal staff.
The rise of the gig economy is set to have a big impact on how people work and how businesses operate. Staff must be able to protect and respect all workers to ensure that the increase in working possibilities is positive for all parties involved.