Pros and Cons in a Gig Economy
The gig economy has been rapidly growing since the 2008 financial crises. According to IE University, “It’s predicted that by 2021, these gig jobs will actually outnumber traditional nine-to-five, office-based jobs. And by 2027, up to 60% of the workforce will consist of freelance professionals.” It is now 2021 and the pandemic has highlighted the benefits of working at home to many 9-5ers. Traditional employees on salary are now enjoying the benefits and freedom that working at home provides. In an article on Forbes, it states,
“Given that the pandemic has forced many offices and schools to close their physical doors, working parents have been forced to become both remote employees and homeschool teachers during the day. Without the option of having someone watch their children, many parents… have had to leave their 9-5 jobs to care for their families and have taken on gig jobs…How this trend could impact full-time work remains to be seen, but traditional employers may need to adapt and offer increased flexibility to full-time employees who have become accustomed to more flexible gig work arrangements during the pandemic.”
While some say the gig economy has increased in size and competition, others believe the gig economy has suffered. An article by fortunly.com states, “According to survey data published by Statista, 52% of gig economy workers lost their jobs because of the COVID-19 pandemic, while 26% of workers saw their working hours reduced.” The article goes on to say, “More than one-third of US workers (36%) participate in the gig economy, either through their primary or secondary jobs.” And gaging the extent of the gig size in the economy is difficult because organizing all the jobs that fit into the description is very broad. According to an article put out by the U.S. Bureau of Labor Statistics, “You may have heard a lot of buzz about growth in the gig economy. But government data sources have difficulty counting how many gig workers there are.” And the article goes one to say, “Gig workers are spread among diverse occupation groups and are not easily identified in surveys of employment and earnings. But they are similar in the way they earn money.” Let’s look at some pros and cons of the gig economy in 2021.
- For Employers: Increased Choice and Reduced Cost
Referring back to the article from IE University, it goes on to say, “For employers, the trend towards a gig economy also has a lot of substantial benefits—mainly increased choice and reduced costs. As platforms became more sophisticated and supply and demand better connected, businesses were able to find the best people for their jobs, regardless of where they were in the world. What’s more, they were able to hire people just for the job they needed. They didn’t have to hire people and pay them when they weren’t working, resulting in unnecessary expenses.”
- Explore A Passion
“Being a gig worker allows you to explore a passion and see if it’s something more than a passing fancy, without losing your primary source of income.” –Flexjobs.com For someone who is considering leaving their career field, or is experiencing burnout, the gig economy is a great option.
The flexibility of having a freelance job, or project-based contract is attractive to a lot of people. Not only do you choose when you work, but what you work on, and for how long. You can choose where you want to work too, whether it be in a specific city or remote. The options are pretty much limitless as more and more jobs are being moved to online and global.
- Lack of benefits
“Once you’re in business for yourself, you’re in business for yourself. And that means it’s up to you to provide the benefits. Yes, you can choose when you work and when you don’t work, but the reality is, you don’t get paid if you don’t work. And, as a gig worker, you likely won’t have health insurance or other benefits, either.” –Flexjobs.com
- Lack of Consistency
Whether you are looking for a consistent income or work hours, you might not be able to achieve that consistency. “Landing enough work to provide a stable income from gigs alone isn’t always easy, or even possible. As a result, many gig workers find gigs adequate for part-time work but not a full-time career. Workers may struggle with looking for jobs, not knowing what—if anything—will come next. “Sometimes you’re not making any money because you’re not getting any work,” says Baseman. “That part’s not really in your control.” And even after you complete a gig, you may face periods of no income if there are delays in getting paid.” – U. S. Bureau of Labor Statistics
“Although demand for gig workers has accelerated since the start of the pandemic, competition for gig jobs has also increased. Workers who participate in the gig economy as their sole source of income must now compete with one another, as well as previously full-time employees who have been forced into gig work. Additionally, as more and more Americans turn to the gig economy, workers face challenges in securing the benefits they once enjoyed. While this may be a cost advantage for some businesses that rely on gig talent, workers themselves will have to strengthen their personal brand and expand their skill set to secure the most viable opportunities.”-Forbes
In conclusion, the gig economy is here to stay, and we are likely looking at its increase in our economy. While it isn’t for everyone, it certainly is a competitive option for many different people for a variety of reasons. If you’re entertaining the idea to join in on the gig economy, make sure to weigh the advantages to the challenges. Call to discuss your options with Jeff at JL Nixon Consulting.