Gig Economy and Its Stakeholders

Defined as “a labour market characterized by the prevalence of short-term contracts or freelance work as opposed to permanent jobs” the gig economy promotes an environment in which temporary positions are common and organizations contract with independent workers for short-term engagements. The growing pace of digitization is a primary driver of the gig economy. This phenomenon has boosted the rise of mobile workforces that can complete work assignments from any point in the globe. In addition, a growing army of freelancers is allowing companies and corporations to select the best individuals to work on specific projects. In certain cases, this triggers a corresponding decline in the numbers of full-time employees.

  • According to the US Bureau of Labor Statistics, workers in the domains of arts and design, computers and information technology, construction and extraction, media and communications, and transportation and material moving power the gig economy. The report notes that gig workers may not have access to consistent income but enjoy the freedom to work as they please. They also have flexible hours and can choose the types of jobs they wish to engage. The downside also includes a lack of employee-paid benefits and a lack of access to a regular set of co-workers. Further, a research report by McKinsey indicates that an estimated 30% of the working-age population in the United States and the European Union engages in independent work assignments. The World Economic Forum notes, “Nearly 13% of the global working age population is already engaged in own-account work.” An estimated “12 million freelancing knowledge workers serve 5 million clients, including both start-ups and Fortune 500 firms, through Upwork.”
  • Deloitte notes that millennial participation in the gig economy continues to escalate because job creators and commercial organizations are enabling the phenomenon. This stems from the fact that gig workers allow these entities to hire fewer full-time employees and thus reduce payroll expenditure on FTEs. Studies and surveys suggest that an estimated 42% of all self-employed individuals in the US are likely to be Millennials by the year 2020. In addition, the overall numbers of the self-employed may attain the mark of 42 million workers by the year 2020. These may create profound changes in the employment ecosystem that prevails in the modern world. Bankrate conducted a study to find that roughly 15% of Millennials earn an average of $1,000 or more per month by participating in the gig economy. These new forms of employment include temporary home repair or landscaping jobs, selling items in online platforms, tutoring, freelance photography assignments, sharing-economy jobs like Uber, etc.
  • Online marketplaces and the ubiquity of connected mobile devices represent prime enablers of these forms of employment. The report notes that free agents, casual earners, and independent consultants help to cushion national employment numbers, improve labour force participation, and raise the levels of national productivity. Digital marketplaces are a key component of the gig economy because these are easy to join, create transparent platforms for sharing information such as individual profiles and work reviews, and operate robust payments systems and infrastructure.
  • The McKinsey report also notes an estimated 39% of working women participate in the gig economy. It states that roughly 60% of female participants in the gig economy primarily act as supplemental earners. This assessment is underlain by the fact that traditionally women handle “a disproportionate share of household work, childcare, and care for elderly dependents; so flexible independent work helps them juggle these other responsibilities.” The McKinsey survey found that roughly 42% of women in the US and 48% of European women that participate in independent work are also caregivers.
  • Women’s participation in the gig economy is contingent upon certain constraints that attend traditional work structures. “For many women leaving the corporate world, fending for themselves in the gig economy or as entrepreneurs is the only choice, as most corporates do not provide flexibility when a woman needs it the most—during exams or illness of children or caring for ageing parents,” says Lathika Pai, founder of Sonder Connect, an organization that supports women entrepreneurs. However, women that wish to enter the gig economy face certain barriers such as a lack of access to networks and financial capital. “In India, women are only 35% of the gig economy,” says Chandrika Pasricha, founder of Flexing It, a platform that connects organizations to consulting talent.
  • A Survey suggests that on-the-job learning may lessen the gender-earnings gap in the gig economy. This applies to most areas of work performed by independent women workers and contractors. In addition, female role models must work to “challenge preconceptions and tackle the confidence gap.” The gig economy attracts women because it offers flexible hours, control over earnings, personal time, an opportunity to pursue personal interests, zero commuting hours, etc. TechRepublic found that women below the age of 40 comprise roughly 60% of the total women’s participation in the gig economy.

These are some of the observations on the current state of the gig economy, based on data and information available through varying sources. This new form of employment is gaining pace in large sections of the global economy. Thus, informal employment is helping job creators and traditional enterprises to add value to their bottom line without incurring additional expenditure on the formal payroll. In addition, wide-scale participation by skilled individuals is creating additional opportunities for income for those that operate outside formal employment systems.

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