After thousands of people lost their jobs during the COVID-19 outbreak, the media began paying more attention to the gig economy. All of this happened because people needed a new way to pay money that didn’t require them to be in an office all day.
Many people have found success in the gig economy and want to continue working in this field as a “side hustle” even after the pandemic has passed. As a result, some people have been able to make a shift in their professional lives that they had not considered before.
With that said, today we are here to discuss the rise of the gig economy: opportunities and challenges.
What Exactly Is the Gig Economy?
Simply put, the gig economy is a free market in which businesses and freelancers enter mutually advantageous, temporary employment agreements. This type of business economy allows businesses to meet client demands for services while reducing the overhead associated with full-time staffing. On the other hand, it allows freelancers to generate revenue without having to commit to a long-term contract or job.
Furthermore, it makes working from home a much more viable option. The gig economy works well when a company has to bring in specialists for a specific project but doesn’t want to hire someone full-time to do so.
Additionally, the gig economy has made it possible for companies to find workers anywhere in the world. This means that there is infinitely more talent to choose from. However, freelancers also have a lot more freedom to promote their expertise, charge whatever they see fit, choose their own schedules, and live wherever they want.
In fact, these days, more and more freelancers are moving to big cities like NYC, even if they don’t have anything lined up. Moving to places like NYC without a job is unprecedented and indicates a significant shift in career development.
The Opportunities of the Gig Economy
Participation in the gig economy has many advantages for both businesses and workers. In this section, we will discuss a few of the advantages that businesses and freelancers have.
One of the biggest advantages of working in the gig economy is the potential to cut down on expenditures. In many cases, companies can save money on office space costs by hiring remote workers.
This is especially true in large cities, where office rent can significantly reduce a company’s profit. Additionally, companies can save money by outsourcing work to independent contractors since they do not need the same investment in infrastructure that full-time employees do.
2. A Larger Labor Force
The gig economy offers a means via which businesses and independent contractors may find one another. This streamlines the employment process by cutting out the need to coordinate with an intermediary of any kind.
3. Much More Flexibility
In today’s competitive job market, workers value flexibility much more than in the past. This is what has made the “gig economy” thrive.
Those seeking a means to supplement their income will likely be drawn to a profession that allows them to choose their own hours.
To put it another way, when workers are given more leeway in how they go about their work, they feel more empowered, which in turn increases their productivity.
4. More Independence for Freelancers
Freelancers in the gig economy are not required to work in offices; rather, they work in their own spaces.
As we’ve mentioned, freelancers are often free to choose their own schedules when working from home. A worker may have a deadline for a job, but it is up to them to decide the hours and the manner in which they will do the job.
The Challenges of the Gig Economy
The gig economy has many positive effects, but it also has certain drawbacks that may be difficult to deal with. The following are some of the challenges that businesses and freelancers alike face in the gig economy.
1. A Lack of Employee Loyalty
Because freelancers are not full-time employees, it is understandable that they would not be “loyal” to their clients. This can be an issue for a company that requires their employee’s full trust and asks for it in return.
Additionally, it is much harder to vet freelance employees. This means that freelancers may not put in the same amount of effort as full-time employees.
On the other hand, there are also gig economy businesses that have poor reputations because they don’t treat their freelancers well. That being said, what the lack of loyalty ultimately causes is disputation and distrust within the workforce.
2. The Problem of Ethics
During the rise of the gig economy, many companies have been called out for questionable business practices on occasion. Their jobs are temporary, pay little, and lack benefits.
And while a seasoned freelancer knows how to avoid such companies, a novice freelancer may fall victim to them.
3. Lack of Benefits
Businesses that participate in the “gig economy” often do not provide their employees with any benefits. The reason for this is that contractors that operate independently of a company are not technically employees.
This means that companies don’t have any legal obligation to pay for any benefits. This is not to say that businesses are unethical for failing to provide benefits. Due to the nature of the gig economy, it is simply impossible to provide benefits.
Working as a freelancer requires a high degree of autonomy. While working from home may be a huge benefit for some people, for other for others, it can foster feelings of alienation. As a result, this can have a detrimental impact on both output and mental health.
Now that you have an understanding of the rise of the gig economy, the opportunities, and the challenges, you can make an informed decision about how to move forward in your own career. The gig economy is here to stay, and it is growing in popularity year after year. We’ll have to wait and see how things progress.