Evolution or revolution? Why this particular choice of phrase to start our take on the gig economy? Aside from a pleasing catchiness, the truth is that these two concepts are very closely connected when it comes to the changing way in which we work.
Has the gig economy slowly been evolving over the past 30 years? Certainly the idea of freelancing, consulting or contracting is not new, people have been doing it for decades. What is new, is the breadth and mindset with which it’s being adopted both on behalf of individuals and companies as a result of technology, economy and lifestyle.
In their essay, Firm of the Future, James Allen, James Root and Andrew Schwedel hint at an evolutionary change, saying: “younger employees, along with many older ones, also want to work for a company that pursues a higher purpose in addition to profits”, linking it to the current flow of change we’re seeing in business models.
Socio-economic changes also mean that while employees are more acutely aware of wellbeing requirements from their work and life, that has put strain on businesses to bear a heavy level of responsibility in an ageing society. The gig economy rebalances that responsibility between employee and employer, proffering individuals the chance to pursue multiple avenues and take charge of their own higher purpose while allowing businesses the benefit of their wider experience and ideas to achieve their own goals as well.
On the other hand, there’s nothing like a recession to really galvanise collective thinking and spur innovation, and herein lies the revolution. What had been a mere option in the way of working before 2008 is now becoming the most logical way of working and recruiting, because not only does it make financial sense, but it also provides strategic advantages for businesses, and answers many of the work/life balance questions perplexing the 21st century individual and the brand they work for.
So whether you see the gig economy as an inevitable evolution or a revolutionary change, the result is the same; it’s a positive opportunity where businesses can focus with greater precision on the bottom line.
What is the gig economy?
Opinions on the scope, scale and nature of the gig economy vary, with no current agreed classification. It’s sometimes known as the ‘on demand’ economy or the ‘shared economy’.
If we look at the genealogy of the ‘gig’ way of life in the 1920s, the phrase was mostly used by jazz club musicians, which provides a rather nice romantic visual of the concept. More recently however, it was coined at the height of the financial crisis as people cobbled together their own careers by ‘gigging’ on a variety of part time and freelance jobs.
Then came industry disrupting and game changing brands such as Uber and Airbnb. These took the idea of gigging from an interim measure to a way of life and business by offering flexibility, control and merit-based success to the individual whilst providing businesses with minimised overheads and a broad pool of self-motivated workers in a world where retainment is one of the biggest burdens of HR departments.
The result has been a seismic shift in work styles and business models for both the taxi industry and the hotel industry, which continue to evolve, both providing new opportunity for individuals to earn and giving conventional businesses a sharp nudge to reconsider their market position.
The gig economy has been described as a jobs market characterised by short term contracts and freelance work instead of permanent jobs, and it has periodically been viewed as either a working environment that offers flexibility or a form of exploitation, depending on how it’s managed and no doubt depending on your personal profitability from it as well.
However, “over the past 20 years, the number of gig economy workers…has increased by about 27% more than payroll employees” reported CNBC at the end of 2016.” In some industries that growth escalated to as much as a 44% increase. In 2016 the BBC reported a 72% increase in gig workers in the transport and storage sector since 2010, and McKinsey Global Institute found that 20-30% of the working-age population in Europe and the United States “engage in some form of independent work”. In 2017 that escalated and Fast Company reported that “findings from Adobe revealed that as many as one-third of the 1,000 U.S. office workers they polled had a second job and more than half (56%) predicted we would all have multiple jobs in the future.”
McKinsey divided gig workers into the following categories: “free agents, who actively choose independent work and derive their primary income from it; casual earners, who use independent work for supplemental income and do so by choice; reluctants, who make their primary living from independent work but would prefer traditional jobs; and the financially strapped, who do supplemental independent work out of necessity.”
What’s interesting is that the trend that was born of necessity in a labour intensive job market has been adopted by other industries including marketing and finance, compounded by younger members of the workforce who are entering it with different principles and are either starting out as ‘giggers’ or taking a view that they will become giggers within a few years.
An ideology that has gained both credence and critics since recession in 2008, it has now moved up the ranks and found its way into the C-Suite, where it has been legitimising itself as a valid form of employment and recruitment. Its roots remain in the idea of being paid for the specific ‘gigs’ that an individual is recruited for, but the make-up of the gig varies from company to company, project to project, ranging from those who really are in situ for a few days or weeks to a catalogue of ‘permanent temporaries’. Suffice to say that as our collective understanding of, and confidence in the concept grows, so will the innovation with which individuals and businesses use the concept to their advantage at all levels of the organisation.
The gig economy is also making itself a byword for cutting out the middle man. It’s a world of purpose, without space for tail spend, but it’s also a place without smoke and mirrors, making the employee minutes and office square footage work for their place in the budget. A more flexible workforce supported by remote access technology reduces the need for large physical locations, increasingly prohibitive for even the most successful of corporations thanks to the cost of real estate.
In turn, the reduced and flexible office space helps answer the increasing issues of economic and environmental sustainability. As Unilever’s Geoff McDonald has been quoted saying – big business can no longer “afford to turn its back on society”.
The bricks and mortar structure of businesses has been changing for some time. Hot desking, desk camping and remote working are all taking the place of large, expensive offices with a view of the city. For example, hot desking can cut the costs of running an office by up to 30% according to a report on the BBC, all of which we will explore in a later chapter. The changing ratio between permanent (reducing) and temporary (growing) employees is all part of this evolution.
What came before the gig economy and why it no longer works
The main thing is that our mindset has changed. Once upon a time our fathers, cousins and children all found work in the same big corporation and dedicated their lives to it. The successful amongst us rose through the ranks of one organisation, showing loyalty and a spotless reputation to steadily climb the career ladder in an orderly manner.
Today a multiplicity of experience is an asset to one’s career as well as being of benefit to companies. Savvy brands value the experience of people who have absorbed knowledge from a variety of brands to bring fresh perspective and innovative ideas to the boardroom table, bringing nuance rather than prescriptive know-how into the arena.
Short term contracting to garner the benefits of a variety of skills are the order of the day. Or as one Google VP put it on LinkedIn: “build a mosaic of a career. Just like a Monet is better when you stand back and you see all of the different colours form the picture. Up close, it just looks like dots and blurbs and blobs of paint, but the majesty is sort of all of it together.” Who wouldn’t benefit from a touch of Monet in their team?
What has facilitated this new mindset? Well it’s lots of things. Call it a loss of innocence or perhaps we’re all growing up, but in a post recession world where there’s no such thing as a job for life, individuals want to spread their income opportunities and have more balance in their lives – time to enjoy that hard earned cash.
Meanwhile, businesses are finding that tightening budgets means that firms are also not seeking to pay large salaries for more senior and economically onerous roles on a permanent basis. So not only are there less permanent roles for highly qualified individuals, but there’s less people willing to fill those roles in a full time capacity. Brands that fill up with more junior employees however, still need the strategic direction of experienced team members, and, for example, in the case of marketing, a gig CMO is the ideal solution.
Crucially, the commercial market we operate in has also changed. It’s less forgiving and more open to criticism than ever before, and the value of an outside opinion has gone up. This new type of C-suite ‘gigger’, such as a CMO can add real and immediate value as well as long term value to a brand, and act as an intermediary between inward facing brand opinion and fresh external perspective.
Take, for example, Pepsi’s advertising faux pas featuring Kendall Jenner. The ad showed the Keeping Up with the Kardashians star bringing an angry protest to a peaceful resolution by handing a cop a Pepsi. The principle was apparently to show that love and understanding solves all problems. In 2017’s heated political climate however, against the backdrop of some controversial decisions on behalf of the Trump administration, it was seen as a slap in the face to all those marching for highly charged causes.
Call it a moment in time, call it a phase, but the indicators are all pointing in the same direction; the traditional business model doesn’t work any more. While some roles are still best served by permanent employees, the fraction of a company that’s filled by ‘giggers’ is now a legitimate segment that needs considering in its own right. It’s more cost effective (a part time CMO can cost the same as a junior member of staff), brings greater stability through innovation, is more transparent, and is a cornerstone to future proofing your business.
- When considering gig working as part of your business, think of it as a way to help adapt your business to meet the changing demands of the world economy and individual employees.
- Gig workers in the C-Suite can be a helpful outside perspective on your company with a vested interest in ensuring integrity and success of your brand.
- There are less highly qualified people looking for full time roles. Gigging allows businesses to benefit from the experience and knowledge of senior experts but without paying large full time salaries.
©gigCMO First published April 2018
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