For some time now, the workplace has been evolving. Due to the COVID pandemic, one can witness a drastic shift towards remote work and self-employment. The gig economy has quickly grown. So why did this happen?
According to research, nearly 60 million Americans have been independent contractors in 2021.
This number represents nearly a third of the US workforce. Now, 2022 has turned out to be the best year for freelancers, which means a shift in the way people work and how businesses operate.
- What is gig economy?
- Why did companies turn towards freelancers?
- Why are people moving towards the freelance lifestyle?
What is gig economy?
You may have heard about articles talking about the "gig economy," but it is not as complicated as it is made out to be. It implies that a diverse group of people with various professional backgrounds are making money within the economy, mostly through contract or freelance work.
In the gig economy, workers work with specific clients and get compensated on mutually agreed terms after completing tasks, or "gigs," for those clients. These jobs vary from a five-minute survey to month-long projects that span a consistent task like accounting, visualization, graphic design, or content writing. They have their next project lined up once their current one is finished, regardless of how long the gig lasts.
History of Gig Economy
Some HR professionals assert that jazz musicians expressed their job as a "gig" in 1915. In 1940, the first employment agency opened its doors to budding professionals who were accustomed to doing menial jobs. The jobs spanned typists, accountants, and other desk jobs. The gig economy has now flourished tremendously in the last two decades.
Flexible work schedules were not so common in the 90s or even in the 2000s. The number of positions has increased in the last decade, with a huge number of non-permanent staff being hired. They spanned contractors, temporary employees, and on-call workers as part of the US workforce. Since 1995, Craigslist has offered gigs before other sites joined the party.
Upwork, in recent years, has encouraged and enabled independent contractors to use the internet to find all kinds of gigs and full-time jobs. Even companies have pitched their services to new clients since 1999. Around 2008, when the Great Recession struck, people relied on the portal to choose temporary gigs instead of stable employment, which was nowhere to be found. The gig economy started as it veered towards flexible locations and work-at-home jobs.
The origins of the gig economy in India
The gig economy is a widespread phenomenon in India. The expansion of online platforms and the rise of the sharing economy have fueled the gig economy. Similarly, Gig4U has established itself in the gig economy. Team gig4u has developed a gig economy platform that has the potential to transform the way small businesses and independent freelancers collaborate.
In India, the gig economy has a long and varied history. The gig economy has its roots in ancient times, when artists and crafters sold their wares at marketplaces and fairs. During the medieval period, the jagirdari system saw landlords and rulers award individuals land and resources in exchange for their services.
This approach was carried on during the colonial period, when the British East India Company recruited soldiers, laborers, and professionals from all over India. Following independence, the gig economy expanded, with many individuals working as day wage laborers, hawkers, and small traders.
The opening of the economy in the 1990s resulted in a surge in the creation of the gig economy, with a slew of new enterprises and possibilities arising. With so many individuals now working in "gig" industries like e-commerce, food delivery, and others, the "gig economy" has become an essential part of India's economy.
How does the gig economy work?
The gig economy consists of specific tasks like giving class lectures, performing housekeeping, or developing software. One may work on a project-to-project basis or for some stipulated number of hours. They move on to the next gig time and again, completing the first one. Some even work on multiple gigs, allocating specific hours to every project. Employees frequently perform various tasks or work in various shifts for different clients. The total compensation may resemble that of full-time employment.
In the gig economy, businesses act as a bridge between contractors and clients. It primarily relies on technological platforms to connect workers looking for flexible work schedules with the umpteen tasks that are assigned by various businesses that need them. Workers in the gig economy can also get jobs with established companies that have changed how they hire.
What does the gig economy offer?
The big experiment with remote work over the past year has worked out well. Because of this, more people are choosing gig work over regular jobs, which forces businesses to respond and change.
A temporary employee is less expensive than a full-time worker. Additionally, it enables HR teams to manage an international talent pool that spans highly qualified professionals instead of paying a huge salary to get someone locally on board.
During the pandemic, many businesses upgraded and evolved their operations to support a largely remote workforce, and they are now set up to support a remote network of temporary employees. Instant messaging apps and other technologies enable collaboration from different places, further supporting the flexibility of hiring gig workers. Businesses have no reason to pass up the chance to hire affordable, experienced, and online gig workers.
Why did companies turn towards freelancers?
Following the pandemic, economies worldwide have been afflicted by "The Great Resignation." Significantly more people were leaving their jobs voluntarily to change employers, go independent, or because they could not find another job.
Some potential reasons for the switches and resignations include:
- Lack of job certainty
- Lack of work-life balance
- Lack of remote working opportunities post pandemic
- Better benefits offered by self-employment
- Attachment to companies offering better CSR and company culture
- Evaluated priorities for betting living standards and work flexibility
Early in the pandemic, job losses abounded, driving the unemployment rate to record levels. Then, as the economy started to recover, job hiring surged considerably. Companies now have open positions but not enough experienced candidates to fill them as an increasing number of experienced professionals choose to work independently.
Why are people moving towards the freelance lifestyle?
In recent years, there has been tremendous growth in the number of people moving into freelancing. Once more, the pandemic accelerated the transition for professionals to choose freelance careers after their jobs were lost. But for many, the transition to remote work provided a glimpse of how work might be different in the future. The standard 9 to 5 job was beginning to be tedious for many people, and freelancing provided them with the freedom to live their lives better.
A laptop and an internet connection would allow many people to work remotely. Even with the move toward hybrid working, not many industries can offer this flexibility.
Working in a way consistent with their values was another benefit of freelancing, as they could work with people however, they saw fit, and also feel free to select or reject their clients based on their sense of morality and ethical principles.
How to prepare for work in a digital era
1. Upskilling is essential
Only about 20% of people believe they have received training and support for digital skills. While people need to take charge of developing their abilities and skills, having employees who are at ease using technology and possess a broad range of skills to apply to the task at hand benefits businesses as well. It is worth investing in a digitally literate workforce now because it is likely to significantly impact outcomes for many organizations in the future. There are several crucial areas to concentrate on for digital skills for both employers and employees.
2. The use of collaborative workplace platforms
Since the beginning of the pandemic, digital platforms have established themselves as an essential component to the success of many businesses. Even after the lockdown has been lifted, compliance with these tools remains crucial.
3. Understanding internal applications and systems
Simple examples include the email system or CMS tools for marketing teams. The element of security is crucial in getting ready for work in the digital age, from using anti-virus software to knowing how to send documents securely and recognizing the signs of a security breach.
4. Data handling
As technology advances, it will continue to alter how we work, interact, shop, and communicate. Consequently, in the workplace of the future, many will widely accept the notion that data has become more valuable than gold. Knowing how to collect and store data, as well as the laws governing its handling, such as the GDPR, are critical skills to inculcate.
5. Digital design and content creation
The ability to effectively communicate vision, data, and information will necessitate the use of all internal and external content. This fact will increasingly fall outside the purview of a single team and become a skill required of all employees.
6. Inequality issues
90% of jobs will require digital skills in the future, and because automation will affect a wide range of roles, employees will need to work with technology and adjust as it changes. If this doesn't happen, there could be problems with inequality as some already-disadvantaged groups become even less likely to get jobs because they don't have the right skills.
Upskilling will be a critical step in preparing for the future of work in the digital age. Everyone and every group need to understand this now so that inequality and lack of access don't happen in the future.
Due to the widespread adoption of technology and cloud computing, the nature of work will continue to change in 2022. Today, many see a freelance career as an appealing option. Professional freelancers can command high pay rates and have more freedom and control than they would have in a traditional employment setting.
Another clue that this is how things should go is how companies react to the shift toward freelancing. Businesses are trying to find a similar balance between work and life by changing their company cultures and ways of working and by hiring freelancers as part of their plan.
Freelancers can entirely run their business remotely with access to the right technology as more and more freelancing platforms enter the market.