Rise of the Gig Economy
Getting a full-time job with great benefits and job security is a thing of the past for many workers. While we may lament the good old days of working at the same job for years and retiring with a gold watch, for many workers, today’s gig economy calls for a different working style and a diverse workforce that has the skills and talents required at any given time.
Working in Blended Workforces
What is a gig economy? The formal definition is: “A labor market characterized by the prevalence of short-term contracts or freelance work as opposed to permanent jobs.” Since 2012, the gig economy has become a critical way to do business both nationally and globally. During the recession of 2008-09, as jobs were lost, and remaining workers became overburdened, companies turned to freelancers and contractors to fill in the gaps. The success of this venture led companies to use contractors and freelancers on a regular basis, working alongside their own employees. The blended workforce was born.
How many companies are using blended workforces? Ninety-three percent of companies say they use blended workforces to complete projects. This combination of freelancers and regular employees has the added benefit of creating flexible teams that better addresses the needs of each project. A 2016 Future Workplace study exploring the gig economy conducted a national survey of 600 human resource professionals and 959 freelancers. What is one of the biggest reasons for looking at freelancers instead of hiring full-time employees? The Affordable Care Act. Sixty-eight percent said it impacted their decision to hire more contractors, and 74 percent said they would be hiring more freelancers to lower healthcare benefits costs.
Benefit issues aside, 60 percent of companies indicated they plan to hire more contractors than full-time employees, and the trend continues as they will increase the hiring of these temporary workers by 30 percent within the next three years. While the bottom line may be an important factor in making the shift to a blended workforce, there is also the issue of finding specific or niche skills that are needed to complete projects.
Freelancers: Taking Control of Work-Life Balance
Skills that businesses say make freelancers more effective include: Planning and Organization, Teamwork, Problem Solving, Verbal Communication, and Critical Thinking to name a few.
Since 74 percent of freelancer’s state this is their ideal work situation, their number will grow to meet the demands of the gig economy in the future. Companies indicate there are benefits and challenges to working with freelancers over full-time employees. The benefits include:
- Creating a more flexible team (46 percent)
- Immediate work availability (46 percent)
- Access to specific niche skills (45 percent)
On the opposite side, the top concerns with managing freelancers are:
- Availability (41 percent)
- Technical capabilities (35 percent)
- Managing consistent branding (34 percent)
In the digital age, it is no longer necessary to be “at work” to do your job since so much of the work we do today can be done from anywhere in a gig economy. You don’t need that office with a window; you may have a better view and more comfortable chair from your home office or even at the local coffee shop. Tough as being an independent contractor can be, many prefer the lifestyle, especially millennials because it provides the opportunity for variety and better work-life balance.
Whether you like it or not, the gig economy appears to be here to stay. A recent Intuit study predicted 40 percent of workers would be independent contractors by the year 2020. At the Society for Human Resource Management (SHRM) Annual Conference in 2016, Henry G. Jackson, the President, and CEO of SHRM identified the increase in freelance workers as one of the top five employment trends today.
More than ten years ago, college and university career professionals began discussing the need for teaching students to become entrepreneurial in their career searches. Finding that perfect job and staying there until retirement was old school. As the economy continues to change and develop into one that requires increased flexibility, freelance workers will continue to be in- demand for the future. For companies who will be working with this new blended workforce, learning to navigate and manage without direct observation will be replaced with skills in management by objective.
Learn essential skills you need to make you a more marketable freelancer in the rising gig economy with our course Project Management Essentials.