Insights Blog

Sharing our perspective on the world of talent and hiring.

What is The Gig Economy? 

What gig economy means

The term “Gig” was originally coined in the 1920s by jazz musicians as slang for engagement and now more broadly refers to having paid work.

The gig economy, also known as the freelance or on-demand economy, is a significant force reshaping the employment landscape and is characterized by short-term, flexible, and project-based work.

Why the gig economy developed

The gig economy has been fueled by technological advancements and a shift in societal attitudes towards work with individuals wanting the opportunity to work independently. It often leverages technology platforms and apps to connect with clients or customers.

The flexibility of the gig economy empowers people to have more than one income, sometimes referred to as a side-hustle. This diversification and adaptability to the market place means there is some insulation to risk than from having a single employer in difficult economic times.

Gig workers are:

Gig workers, also called freelancers, contingent workers or independent workers, consists of:

  • app-based workers (ride share and delivery)
  • creatives selling their work online (arts and crafts on marketplace websites)
  • professional contractors (technical, engineering and marketing professionals that choose contracts with defined durations).

There are three basic reasons for contracts:

  • Resource augmentation to address short-term needs (e.g., maternity leaves);
  • Managed projects which are term or project based; and
  • Managed services (e.g., contact centres).

Gig workers enjoy the flexibility of having control of their working arrangements and tend to be entrepreneurial.

Challenges

While people have never had so much freedom as to how and where they work, the move from full-time employment also means that gig workers don’t have the same protections or benefits as full-time employees. Reports and media tend to group these workers although they have very different jobs, skills, and pay ranges. This can make it hard to get detailed data on various segments.

Why the gig economy is important

“Ballooning by 30% during the pandemic, the gig workforce is now on track to surpass the full-time workforce in size by 2027.” – Forbes

“Hiring contingent workers allows HR leaders to access a larger pool of talent without the additional costs of recruiting, benefits, and training. This strategy has made gig workers an appealing alternative to traditional staffing.” – Gartner

Gig working remains a favored strategy for the C-suite, with six in 10 executives expecting that gig workers will substantially replace full-time employees at their company by 2024 (in Japan, nearly nine in 10 executives make this prediction). – Rise of the relatable organization Global Talent Trends 2022–2023 Study – Mercer

The average company reports that contingent labor (defined as independent workers and other forms of non-employee labor) makes up 28% of their workforce and that the proportion was expected to grow to 38% by the end of 2027. Deloitte and MIT’s Workforce Ecosystem study series found that 82% of organizations are taking steps to improve how they integrate and manage independent workers as part of their workforces, with 1 in 5 (22%) being far along in this process. – MBO Partners

For employers, it offers an exciting prospect to bolster their talent base and increase their agility through on-demand labour. – The Gig Economy is Here to Stay – Deloitte 

The gig economy keeps growing.Technology will continue to challenge our ways of working, and that trend will continue. Also, some workers prefer these new ways of working. As an employer, if you aren’t considering the gig economy at all, are you missing out on available talent? And, as employers, if we do engage in the gig economy, how can we do so with the right social impact to generate positive and sustainable work for all? – Stephen Harrington, Partner, Human Capital, Deloitte Canada

There is no question that the gig economy is growing and that there are talented people working in different ways. Don’t miss out on the talent you need, consider contingent professionals.

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