Gig Economy and the Future of the Workforce
The contingent workforce just got a whole lot more contingent. The world is heavily influenced by technology and, as it always has, the structure of businesses and employment respond accordingly. By now, you have probably heard of app-based companies like Uber, Lyft and Postmates. The companies provide courier and transportation services 24/7 with the click of a button (or touch of a smartphone) but that’s just the tip of the “gig economy” iceberg.
Nearly 35% of today’s total workforce is comprised of non-employee workers, which includes temps, freelancers, contractors and statement of work-based labor. As a result, 95% of businesses now view this new workforce as a key element to developing and running a successful business, which means big changes for hiring trends in the coming year. (CIO.com)
In the past, supply and demand reigned supreme, allowing companies the metrics necessary to ensure stock was always available, but not wasted. Because consumers had to shop in stores or receive delivery during open hours, an additional dimension was necessary to ensure proper staffing and hours. With “on-demand” consumer resources, all that foot work isn’t necessary. The app is the aggregator, placing the responsibility of supply and demand on the supplier and demander.
Following no scheduling guidelines, the employee is actually considered an independent contractor. Of course, independent contractors, usually synonymous with freelancers, are no new employment invention. However, what is making headlines, is just how much traction this approach to income is making. One poll found that 22% of American adults (45 million people) have already participated in this type of service structure. These increasingly popular platforms are shifting the way we classify our occupations, creating the beginnings of what experts are calling the Gig Economy.
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What is the gig economy?
The gig economy refers to the new approach to business structure, employment and consumerism. Previously, it was more common for workers to have a set schedule, monthly take home salary and the glorious office job. Within this new economy, the structure of business has transformed to be practically structureless, allowing employees to set their own hours, availability and deliverables. “Gigging” is loosening the bindings on work expectations and today’s people are responding positively. More than 90 million people, or 44% of U.S. adults have participated in such transactions, whether they be the lender, driver, host or borrower, rider, guest.
The Growth of Gigging
In 2014, 53 million Americans reported doing freelance or contract work, which is 34% of the entire workforce. Further, it’s estimated that “non-employee” work contributes $715 billion in earnings to our economy. The instability and pressure to find work has always been the top challenge, but most freelancers are looking to the future with hope, saying technology is easing the struggle to find work. Not to mention, the profession itself is gaining more respect as well. In fact, 95% of businesses now see non-employee work as a key element in developing and managing a successful business. One company estimated that by 2017, only 41% of the workforce will be considered a traditional worker, leaving the remaining workforce to be contingent or non-employee status.
Employing People in the Gig Economy
As hirers, managers and employers, the gig economy is raising some interesting points. While you probably won’t be dealing with the complexities of defining your employees like Uber, the increase in gig popularity does offer some unique opportunities to otherwise traditionally structured companies. Because freelancing has become so much more appealing as a career path, hiring a contingent workforce is far more acceptable than in years past.
Embracing the trend means companies are capable of hiring people without the complications that come with permanent workers like benefit packages and the pressure to “hire right.” And it’s not all about saving money either. Contingent workers bring diversity, new thought and fresh eyes to a company who may have looked the same for years.
Tweet This: The benefits of hiring contingent workers vs permanent employees:
Of course, hiring non-employees does come with its challenges. For one, they are just that: non-employees. All the freedom an employer has in letting the worker go is matched by the worker’s freedom to leave whenever. Additionally, a contingent worker will not understand the ins and outs of your company quite like the employees who work within your building every day, week after week. To answer this, many companies are working both types of worker into their hiring plans, creating a hybrid recruitment strategy.
The economy is shifting, but that doesn’t mean employers should stress. Vector Talent provides temporary staffing services using honed methodologies to offer “talent on demand” which accommodates the changing resources of the fluctuating business environment. Learn more about TalentFLEX, temporary staffing solutions that work!
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