How “the gig economy” influences the labour market

Over the last few years, the gig economy (translated as “economy on demand”) has become a fairly well known segment of the labour market, expanding considerably since the pandemic began due to the widespread adoption of remote work. 

Moreover, the current situation has fundamentally changed the traditional „9 to 5” program, leading many workers to pursue various “gigs” to supplement their wages or even to make this form of work the main source of income.

For example, it seems that around 11% of the EU workforce (24 million people) have used specific platforms to find gig jobs at least once. While 3 million people do this to obtain their main income, 9 million persons treat these jobs as a secondary source, and almost 7 million to earn an occasional income.

Thus, as the world begins to fully embrace this new way of working, which will be even more popular after the pandemic ends, companies must take into account this inevitable change and find new ways to support workers and to ensure the long-term development of the gig economy.

What does the gig economy mean anyway?

Etymologically speaking, the term “gig” is a slang word for a job that lasts a specified period, being typically used by musicians. Briefly said, we are talking about a limited-term contract. 

Therefore, this type of economy actually involves the possibility to offer customers the desired services, at a certain moment and for a predefined period. Moreover, one extremely popular sector that has developed from this type of work is the sharing economy (for example, the services of Airbnb, Uber, Lime etc.).

The notion of gig economy refers nowadays to an online market where demand meets supply – where service providers/freelancers meet with potential future customers. Examples of gig employees in the workforce could include work arrangements such as freelancers, independent contractors, project-based workers, and temporary hires.

As per current stats, about 35% of the US workforce were contributing to the gig economy in 2020, up from 14-20% in 2014. Moreover, these figures are expected to go beyond recent reports, and some will say that self-employers will represent more than half of the American workforce by 2027.

Flexibility at work – a necessary benefit

Obviously, flexibility is the main advantage offered by the gig economy, both in terms of working hours and the available roles that workers can receive.

In this regard, pre-pandemic, about 70% of gig workers said that one of the reasons they chose to try the new form of work is that it gave them more flexibility and, often, more money, compared to a full-time job.

Gig work allows people to focus on the key aspects of their lives, and at the same time to carry out their work tasks when and where it suits them.

The way this trend could influence “traditional work” is not yet clearly defined, but companies will have to adapt to this, offering more flexibility even to full-time employees who have become accustomed to such arrangements during the pandemic.

Workers’ rights is not an option 

The global health crisis we are living through has placed even greater emphasis on the rights, benefits, and the protection that companies offer to their workers, also known as social contributions.

While the majority of those who opt for “gig” jobs choose a more flexible lifestyle, with no full-time employment in mind, questions are being raised about the benefits and protection that companies should offer to all workers, including project-based ones. Therefore, the long-term viability of the analysed work concept is debatable if these protections are not provided. 

The gig economy has become an integral part of the global workforce, a trend that has been accelerated mainly because of remote work. Nowadays, millions of employees decide to pursue a working arrangement that is better suited to their lifestyle compared with, in most cases, what a full-time job can offer.

The gig economy brings many benefits to both parties involved. Workers have the opportunity to choose projects that best align with their interests and goals and to obtain financial gain from several sources. Companies also prefer this type of economy because it meets the requirements of seasonal projects, eliminates recruitment costs, and allows organizations to remain competitive.