Whether we work in the Gig Economy or buy from it, the chances are many of us will have first become consciously aware of it in a small part of our day to day; perhaps when booking a room on holiday via Airbnb or a taxi arriving in three minutes’ time with Uber.
While that little icon on your iPhone may mean a cheap and speedy cab fare for you however, for Uber CEO Travis Kalanick it represents the fastest growing startup in history, valued at $60billion after five years in business and spawning a massive change in the earning opportunities of taxi drivers. Is this an illustration of the power of the gig economy? Or is Kalanick the Harry Potter of the app world; a lottery winner amongst a sea of players?
Throughout the industrial era, there have arguably been two areas of employment: the public sector and the private sector. We have talked about the world in which entire families would find themselves working for the same firm with multi-generational loyalty, told from youth that to rise through the ranks of a large business and cash out at the end with a good pension and a medal for reliability, was to be secure, only to have that illusion shattered by fast changing industry trends and a series of economic recessions.
Now we find ourselves in a rapidly and continually evolving world of the gig worker, where the parameters continue to be defined and the opportunities are being uncovered daily. We are living out Bobby Kennedy’s dream (although perhaps not in the context that he meant it) and living in a world that instead of asking ‘why?’ asks ‘why not?’ when it comes to changing the model in which we work, but who’s involved and how many people are actually turning theory into practice?
How many people work in the Gig Economy?
“The “gig economy” is triumphing over everything else,” wrote the Telegraph newspaper, citing the likelihood that the number of self-employed workers could overtake the number employed in the public sector, perhaps before we finish writing this page. Figures quoted go as far back as 1975, when a reported 8.7% of the workforce in the UK worked for themselves, merely rising to 12% in 2008 but then growing rapidly to 16% by January 2016, from which it has continued to escalate. “[the gig economy] shows no sign of slowing down,” they conclude, “and it is going to impact the economy and the political system far more than most people yet realise.”
Meanwhile, in America the U.S. Bureau of Labor Statistics (BLS) estimated that the trend in gig working had grown by more than 65% between 2009 and 2017, and a study conducted by Intuit predicted that by 2020 40% of American workers would be independent contractors.
What proof is there that it’s going to continue to grow?
Of course, just because the numbers have grown across one decade doesn’t mean the trend is going to continue moving forwards, so what are the indicators that suggest this is a phenomenon that’s here to stay? Faith Popcorn, CEO and founder of Faith Popcorn’s BrainReserve, highlighted the importance of millennial mentality alongside technical progress to Fast Company, saying that for this, the largest cohort in the workforce, “the idea of one career seems increasingly untenable”, citing the economy they inherited alongside the rise in automation and AI. Then there’s the decline in permanent candidate availability because people with the right skills want different things from their careers and to work in a different way: “Finding people to do the jobs on offer is rapidly becoming employers’ biggest headache, and many are reporting an increasing number of white-collar jobs as hard to fill, including in the IT and financial sectors,” said REC Chief Executive Kevin Green.
Consolidating those thoughts, a study by Ernst & Young businesses showed that businesses are gravitating towards the gig economy because of economic advantages, the greater access of cloud computing and other technologies, the availability of the right talent, and a changing way in which businesses are managed.
In their survey, 49% of large organisations (100,000 employees or more), said they increased their use of gig workers in the last five years, 40% expected to increase their use of contingent workers in the next five years, and a quarter expected 30% or more of their workforce to be contingent workers by 2020. The same survey showed a very high rate of employee satisfaction amongst gig workers, with 73% reporting positively on the arrangements they had with clients and with 66% believing the benefits of contingent working outweighed the downsides compared to just 6% who believe the opposite.
Crucially, this survey shows the changing ethos of the Gig Economy. What may have started as a cost effective solution for start ups and an opportunity for individuals to earn extra cash in a job poor, post recession market, has show itself to be an interesting model for managing businesses.
Tony Steadman, Principal, People Advisory Services, Ernst & Young LLP said: “the survey responses suggest that organisations are welcoming gig workers as a part of their growth and change management strategies. This Gig Economy looks very different than the traditional picture of seasonal workers or workers who provide common services to consumers.” This is evidence that the Gig Economy is an entirely different beast to what has gone before in the way businesses use contractors, consultants and freelancers, and as it develops it has the capacity to be shaped and moulded by those who wish to be a part of it.
This is a particularly interesting point, because we have all heard the criticisms levied at the Gig Economy. Since it started gaining popularity in 2008, questions have arisen about its ethical nature, whether companies are exploiting workers with a lack of certainty and employee rights for example. However, it seems that these are only natural questions which, far from highlighting weaknesses in the concept, are evidence that it is being taken seriously and is refining its parameters to be a longstanding, legitimate way of working and recruiting.
Which industries and skillsets make up the gig economy?
What started in the service sector with taxis and tourism is now a model that applies across almost all areas of industry. We’re seeing the Gig Economy morph into something that’s applicable and utilised across all job levels and industry types from copywriters to CMOs. Data to show exactly which sectors have the biggest proportions of gig workers are hard to quantify, but the Bureau of Labour Statistics in the States has said that between “2003 and 2013, all industry sectors experienced growth in non-employer businesses.” While the earliest incarnation of the Gig Economy has largely leant itself to on demand services, it is assertions like that in EY’s survey that indicate growth in the Gig Economy across all sectors whether it be finance, marketing, tourism, engineering, or anything else. In short, there doesn’t seem to be a cap on the possibilities for gig working be that in terms of industry sector or rank and file; it is up to individuals and businesses to make it work for them.
- For those coming into the job market, there is a different mindset about careers; many will envisage having multiple careers over their lifetime – how is your organisation preparing to accommodate a changing mindset?
- People want different things from their jobs, including a greater work life balance, they are no longer satisfied simply with financial remuneration. How are you and your HR policies going to accommodate that?
- The Gig Economy now spans all business sectors – consider which parts of your business might really benefit from a gig approach and use it strategically.
©gigCMO First published April 2018
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