The gig economy has reshaped the way we define work in today’s talent landscape. ‘Gig’ is a slang word used for a task that is to be performed for a short duration. It is interesting to note that the term ‘gig’ was used traditionally by musicians for defining a performance engagement. Gig economy is a free market system where workers are hired on a temporary basis for doing short-term independent work.
The gig workers typically include freelancers, project-based hires, contractors working on independent basis, and part-time workers. The gig applications and other digital technological tools have emerged as dynamic and transformative platforms to connect gig workers with their clients from anywhere in the world. Some popular companies where such gig arrangements are witnessed include Uber, DoorDash, and Airbnb.
The Rising Gig Economy
There are a number of factors that have contributed to the growth of gig economy out of which the two most important ones are:
- Rising mobility in the workforce.
- Remote work done through digital platforms.
The output of gig economy includes flexible and efficient services, providing consumers with a fast and convenient alternative to conventional regular services. The gig work is becoming increasingly popular, particularly among younger populace given the fact that the operations are being done mostly over the internet. About one-third of the U.S. population performs some type of the gig work and this number is expected to increase more and more, not only in U.S. but across the globe as many companies, nowadays, hire independent contractors to save time and money.
McKinsey, a global management consulting firm, conducted American Opportunity Survey (AOS) in 2022, the results of which revealed that 36 percent of employed U.S. workers were working on an independent basis and you would be amazed to know that this number has increased by around 40% from the year 2016. The Global Workplace Analytics predicts that around 70 percent of the workers will be working remotely by 2025.
A consistent growth is observed in gig economy each passing day. The revenue earned in 2020 by some of the most popular gig economy companies is shown below:
Source: Corporate Finance Institute research
Gig Work and Talent Globalization
The scope of gig work is no longer limited to basic work but has diversified across various sectors. The conventional sectors such as healthcare, education and finance have supported gig work, allowing independent workers possessing a specific skill set perform on-demand services. This diversification has increased more in the last few years, creating opportunities for businesses to give rise to a more connected global talent market. With the rising gig economy, the geographical boundaries are becoming less relevant. Companies can source workers from a global pool, and freelancers can apply to gig jobs from anywhere in the world, thereby giving rise to 24/7 ready-to-go-to workforce. This dramatic shift in the way work is done has the potential to develop an inclusive gig economy that values quality workforce more than the geographical boundaries. Isn’t this a worthy development?
