Business

Why GIG Economy May not be the Workforce of the Future

GIG Economy

Gig Mechanism

The last few years, has seen a big change, in the way, the world has started to live. Thanks to the effect of technology, there has been a complete change, in the way, people have started to think and approach life. Gone are those days, where employment in general, used to be a long term plan, for every individual. In the sense, the earlier thinking of individuals would be that, once you join a particular job, in all prospects, you would continue there for a long while, unless of course you find a better opportunity. The Entrepreneurs or employers would also think on those grounds of retaining employees on a permanent basis. But that has changed drastically over the years.  Thanks to the Gig Revolution!

What is Gig Economy?

Employers all over have started to get used to the Gig Mechanism. The Gig Mechanism gives the flexibility to the employers, to hire employees, on a temporary basis, for e.g. like independent contractors and free lancers, instead of full time employees. The impact of Gig economy has been so big that even major western countries like the USA and UK, are considering this model, as a serious option. Over 40% of companies in the western countries have moved towards the Gig economy.

What has actually contributed to the global bloom of Gig economy? This article throws more light on the reasons and its significance.

Gig Economy – How it benefits the customer?

Apart from giving the customers, more flexibility and options to choose from, the Gig economy had made a big difference to the way, they have started thinking about their business. Why Gig economy has become the need of the hour for more businesses. Here are some reasons which can be thought about.

  1. It has given more freedom and flexibility to work. Employees can plan their work schedules, without really being restricted to the regular 8 hour work shift. They can also have the freedom to decide whether to consider working on weekend or not, depending upon the need and how much time they have to put in.
  2. Gig economy has also allowed employees to learn new skills which might help their profession,
  3. With part time employment and freelancing, becoming more of a preferred mode of employment, the gig innovation has generated employment on a very large scale.
  4. Some of the prominent companies which have successfully adopted the Gig mechanism and have succeeded in a big way are Uber, Air BnB and Upworks.
  5. The Gig Mechanism has also helped in finding out new talents, from most of the employees and by and large, it has worked to the advantage of the employers too.
  6. A large number of businesses have also been able to utilize external talent since the arrival of the gig economy. There are many such odd jobs, available within any organization, for which hiring an external employee would be very costly. In such cases, businesses can hire a freelancer online and get its tasks completed.

How Gig Economy has grown over the years

Recent studies indicate that there has been a steady growth in accepting the Gig model of economy. The studies indicate that close to nearly 16% of America’s workforce, have preferred alternative sources of income. Here’s a brief look at the statistics.

The survey conducted by a popular News Magazine shows about 9.3% of the US workforce, choosing the gig model in the year 1995. This grew upto 10.1% in the year 2015 and then there was a phenomenal growth of upto 15.8% i.e. close to 16%, by the year 2015! This shows that this business model is set to scale greater heights, in the years to come.

Uberisation of workforce is the next big wave

  1. The Digital world continues to see changes at a rapid pace and the next big question is how to achieve a proper work life balance? Here’s where adopting the Gig economy has worked wonders for companies.
  2. Uberisation can be understood as a trend, which has made it possible for companies to reduce costs and overheads, hire talent only when necessary, customise the workforce according to the projects on hand and build a highly energetic and motivated team.
  3. This also shows the way to individuals who want to work on a contractual, consultant based opportunity or as a freelancer.
  4. It also them to select projects they want to work on and on the terms they desire.
  5. However, trend towards the gig economy, might have its share of challenges as the hiring authorities would have to deal with employees who are not directly attached to the company and would be on short term rather than full time employees who are bound by the companies operational policies.

Factors that contribute to a Gig economy

  1. With the biggest democracy in the world, America, showing the rest of the world, the way, in establishing a gig economy, there is every possibility the number of companies, adopting this mechanism, will increase.
  2. We have also seen a continued preference, by employees to work from home or remotely, and it is becoming a commonly practiced phenomenon, across the globe. This gives a boost to independent contracting work, as a bulk of  those jobs don’t require, the freelancer to come in to the office, to work.
  3. The biggest contribution of Gig economy, one would say, is that the employers can pick and choose, their workforce, based on the necessities of the business and not on employee experience.
  4. With Robotics and Automation, also on a remarkable high, most of the jobs, have been replaced, by these technologies, once where human contribution was the most.  Employers have also been benefitted, as most of them, startups in particular, would not be able to afford, full time employees, in the beginning.
  5. Economising Business would be at the back of their mind and the evolution of Gig economy, goes a mile, in helping them, achieve that.
  6. Economic reasons also factor in to the development of a gig economy.
  7. From an employee’s perspective, people often find, they need to move around or take multiple positions to afford the lifestyle they want.
  8. People also tend to change careers many times throughout their lives, so the gig economy is the reflection of this occurring on a large scale.

Technology and Gig Economy

  1. The digitization process is sure to continue long and strong with key processes being automated.
  2. Technology too is seen to provide companies with a robust methodology with the implementation of the gig mechanism where the companies can think of remaining more agile and swift footed.
  3. Technology is also slated to help evaluate and analyse the effects of Gig economy. With a multi-faceted workforce, slated to enter the employment ecosystem, there sure is a need for large volumes of data to be collected and analysed.
  4. Sure, there are going to be ways then, to get into the insights of workers, as this business model takes off.

Availability of Gigs – Could be a slight challenge

  1. As much as a Gig mechanism can be seen as a revelation, it has its own share of challenges. As Gig economy sees the potential for freelancers and part time employees, there is always a question mark, over their consistent availability. This is mainly because; these employees would be handling multiple projects from different employees and work on priority basis. This can prove to be a slight disadvantage for those companies, who would want them, across a complete project schedule.

Conclusion

  1. The benefits offered by the gig economy, range from flexibility and variety to large scale employment and cost advantages, for small and large scale business establishments. However, this is just one side of the coin.
  2. For the gig workers life is not as easy as it seems. The gig economy has provided employment to a very large number of people on a global scale but not every gig worker is happy and satisfied. It is because not all of them are highly skilled workers who have all the necessary skills to win in a highly competitive environment. A large number of them do it out of choice and are satisfied. For them the gig economy has brought higher autonomy and flexibility which is good in most cases but several benefits that were available to the traditional employees are not available to the gig workers.
  3. The gig workers are in short term relationships with the employers and therefore do not have a definite career. While the highly skilled workers may find better security because of high demand and low availability, the less skilled workers may often find it difficult to obtain suitable gigs and consistent employment. A gig worker does not always make a planned move or does not have a stable career as the traditional worker.
  4. However, having spoken in depth about the advantages of Gigs, there are certain issues which would still interest the companies. The fact that gig economy, entitling   to more of a need based selection of workforce can also raise questions over timely delivery, without compromising on quality. This is where, DeveloperOnRent, a company which continues to work meticulously to address this issue, has come out with a  robust business model which allows companies to hire regular developers, who are dedicated and flexible to work either onsite or offsite, as per the company’s requirements. This way the companies can expect to close the project at a quick pace, without compromising on quality, since they have the flexibility, to have a qualified and dedicated developer, at their service, all the time.
  5. Though the gig economy can help companies, pick and choose resources, based on need, the DeveloperOnRent model, which is more inclined towards taking a complete ownership of a client requirement and being 100% accountable to it, than a freelance model, will be of more benefit.

About the author

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Mohamed Sathik Ali S

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