PART 1 of 2.
When I was in High School and College, I worked many temporary jobs through staffing agencies. Then early in my professional career, I worked as a recruiter for a national employment agency in Washington, DC.
Throughout my career in Corporate America I worked with placement agencies and recruiters. Now as a career coach, I have spent the past 6 years working with thousands of job seekers.
So I am extremely familiar with our 21st Century “Gig” economy, which is also referred to as the sharing, collaborative, peer-to-peer, on-demand, or gift economy. But what is the “gig” economy?
Independent workers/freelancers select temporary jobs (projects) to work from anywhere, and employers get to select best workers for specific projects. To understand the transforming role of work in America, it will help to understand why our American workforce is becoming a truly alternative workforce and gig employment is growing exponentially?
Financial pressure is being constantly exerted on organization to reduce costs (staff) and the entrance of the Millennial generation, will represent 4 of 5 workers by 2020. Companies realize significant headcount reductions by using freelancers by saving on office space, benefits, and employee training.
Temporary positions are common and organizations contract with independent workers for short term engagement projects. Our economy is becoming project work driven to meet peak production periods. Workers must become mini-businesses to find work (clients.)
The attraction of flexible work arrangements.
The argument most often made for workers benefiting from the option of working gigs is as follows: you are afforded greater work-life balance as people can choose what they want to do, how long they choose to do it, and when/where they choose to work.
But there are many drawbacks of committing to work on gigs in lieu of full-time employment. For starters, there is absolutely no economic security, no predictability to work or guarantee of employment, and no power of workers to receive a fair share of profit. A workforce with no safety net, assurances, or power when taken to the extreme.
Key drivers fueling the gig economy growth.
There are a number of factors that have driven the rise of the gig economy, namely:
Post World War II Japanese kaizen, 6-Sigma, lean manufacturing driven by constant process improvement, automation, and…
A commensurate American (car) manufacturing reaction to Japanese and German import threats leading to significant worker cost containment/reduction in the 1980s by leveraging employee outsourcing, off-shoring by sourcing cheaper labor from third world markets.
The digital age has facilitated a mobile workforce. Smartphone and mobile technology, that enables workers to work from anywhere any time.
A shifting cultural and business climate.
Automation of work flow processes including robotics have led to a significant reduction in the requirement for actual employees.
There’s an app for that: constant increases in technology solutions automate workflows, leading to a reduction in the need for workers.
A proliferating independent workforce:
From a JobVite annual survey, 19% of American adults who responded said they held gig-type jobs.
Approximately 54 million Americans claimed to have participated in some type of independent work in 2015.
1 in 3 Americans can be classified as a freelancer. Further, approximately 1 in 12 US households – 10 million people rely on independent work for more than half of their income.
The proliferation in alternative work is not a strictly American phenomenon. Half of the UK’s working population will be self-employed in the next 5 years, and the European Union saw a 45% increase in the number of independent workers from 2012-2013.
A study conducted by Intuit found that by 2020, 40% of American workers will be independent contractors.
A poll by Time, Burston Marsteller, and the Aspen Institute found that 45 million Americans have offered goods and services in this new work model. More than 1/3 made 40% of their income in this new contract economy.
To wit…sharing/gig economy firms are popping up everywhere. AirBNB, Uber, Lfyte, Fiverr, TaskRabbitt, Upwork, Zirtual, Parcel, Hello Alfred, Love Home Swap, Etsy, One Fine Stay, Amazon’s Mechanical Turk…gig economy players are everywhere.
Part 2 to follow…