Long before COVID-19, gig work already existed. Platforms like Upwork, Uber, and TaskRabbit offered people flexible income streams and opportunities through creative tasks, ridesharing, on-demand labor, and other types of work. But when the pandemic hit, the gig economy seemingly exploded onto the global stage overnight. Online freelancing, food delivery, remote work—you name it!
This shift into non-employee work points to a new growing economy that could revolutionize how we think about work. Looking into the future, gig-based work promises more change. Will it be a positive change or disrupt the world economy? Probably both.
What Is the Gig Economy?
First, a quick definition. When we say “gig economy” or “gig work,” we mean any type of work done by someone who is not an employee of the company. So, this includes work gained through apps (Uber, Door Dash), online platforms (Upwork, Fiverr), freelance or contract work done onsite or remotely, and any other types of independent work.
Will the Gig Economy Continue to Grow?
Yes, and it’s happening right before our eyes. The gig-based economy has been growing at unprecedented rates and is expected to grow even more.
According to Zippia, the gig economy has grown 15x faster than the traditional job market.¹ Between 2020 and 2021, the number of independent workers in the US increased by 34 percent, with 44 percent currently depending on their gig jobs as their primary source of income. Projections indicate that the number of freelancers in the US will reach 86.5 million by 2027. The gig revolution is in full swing!
What’s Fueling This Growth?
The gig-based economy is booming for several reasons, including:
Flexibility
Forget the old 9-5 grind. You’re in charge of your work schedule in this new world of independent work. You get to pick when and where you want to work, choosing the options that best fit your personal and professional needs.
Extra Income
When the economic waters get choppy, many people turn to gig work to increase or supplement their income. Regardless of the economy, many creatives like to take on freelance or side projects for variety, to gain new skills, or to build their portfolios. Creatives love a side hustle!
Independence
In the gig-based economy, you’re the boss. You get to call the shots and take control of your work life. You choose the work or projects that you prefer based on timing, schedule, pay, requirements, or whatever other criteria you use to vet opportunities.
Skill Diversity
Companies like these gig-based options because they can tap into a vast talent pool, ranging from seasoned pros to enthusiastic beginners with various skill sets. This is especially handy when you need specialized skills for a project but not long-term on your team.
Tech Revolution
Thanks to the internet and the wonders of big data, the gig-based economy has expanded into a wide range of services that people across the globe can easily access. It’s made all types of work accessible to more people and more people accessible to companies who need their skills.
Pandemic Push
The pandemic turbocharged the gig-based economy. With more people staying home and reducing in-person contact, personal home deliveries and gig services have become lifelines for many daily chores and necessities. And more people started seeking work they could do from home or remotely.
Read more: The Rise of Gig Work and Reshaping the Future of Work
The Positive Side of the Coin
The good thing about the gig-based economy is its positive impact on the global economy. According to a report from McKinsey & Company, by 2025, online talent platforms could kick in a whopping $2.7 trillion into the global GDP.²
1. Skills Depth
Independent workers can bring diverse skills and fresh perspectives to your team, improving creativity and problem-solving. Plus, the whole on-demand aspect of gig work can benefit businesses, allowing them to access specialized talent only when needed.
2. Flexibility
Now, more than ever, job flexibility is important to people, and gig work offers flexibility that most traditional jobs can’t match. For many, this flexibility is not just appealing; it’s necessary. Parents, caregivers, people with disabilities, and anyone seeking a better work-life balance may find opportunities that better fit their needs in the gig economy vs traditional employment.
3. Startups
The gig-based economy can also be a launchpad for entrepreneurship dreams. You can test business models, build a fan base, and get hands-on experience without leaving your current job or taking on the significant risks of starting a traditional business. Many businesses began as a side hustle or independent project that took off!
The Other Side of the Coin
Studies reveal that independent workers often earn less than their traditional counterparts, grapple with job insecurity, and struggle to secure benefits like health insurance and retirement plans.³ While gig work has advantages, it’s not all sunshine and rainbows.
1. Income and Benefits Inequality
For all its opportunities, the gig economy can magnify career inequality. Gig workers often miss out on benefits and protections that traditional employees typically enjoy, like paid sick days, retirement plans, or paid vacation. It’s a tradeoff, but with the gig-based economy’s relentless growth, the income gap between gig workers and their traditional counterparts may stretch wider.
2. Job Insecurity
With its reliance on short-term contracts and freelancing, the flexibility of the gig-based economy can also feel like a minefield of job insecurity. Independent workers often find themselves without the stability and protections of traditional employment, making them highly susceptible to economic shifts and unexpected market demand fluctuations.
3. Regulatory Quandaries
The gig economy has raised significant regulatory challenges. Many localities struggle to classify gig workers (as employees or independent contractors), leading to disputes over labor rights, benefits, and taxation. These challenges can create uncertainty for both independent workers and businesses.
4. Erosion of Workers’ Rights
As the gig-based economy surges, workers’ rights and labor standards may continue to erode. Some argue that gig companies cleverly navigate legal loopholes, avoiding the responsibility of providing essential benefits like minimum wage, overtime pay, and workers’ compensation. This not only undercuts the social safety net but also leaves independent workers standing on shaky ground, more vulnerable to the whims of the market.
What Can We Expect in the Coming Years?
Looking ahead, several pivotal changes and trends are on the horizon for the gig economy. Here are some significant expectations and predictions for this evolving sector:
1. Independent workers may gain more rights and protection.
The gig-based economy has sparked many debates and discussions around the size of the gig workforce and how gig work affects workers’ earnings, work conditions, and opportunities. This has triggered a growing demand for more rights and protections for gig workers, even to the point of classifying them as regular payroll employees.
Companies like Uber and Lyft are pushing for a new “third category” that redefines worker classifications. Various states and localities have devised innovative policies and strategies to elevate standards and tackle the widespread problem of worker misclassification.
In the US, according to the Society for Human Resource Management, legislators have introduced a bill that grants legal protections to gig workers while still allowing businesses to classify them as independent contractors.⁴ Furthermore, the Federal Trade Commission is actively regulating gig work, focusing on online gig platforms to enhance worker protections.
2. Remote gig opportunities will increase.
Companies continue to expand, adding roles such as freelance writing, virtual assistance, online tutoring, and digital marketing. Specialized platforms connecting freelancers with employers, like Upwork, Fiverr, Toptal, and Flexjobs, are becoming increasingly popular.⁵ Also, with the advancements of AI, more jobs are being created for gig workers, like cloud solutions architects, security administrators, product support associates, and IT storytellers.
Ultimately, remote work has been a game-changer, primarily because of its flexibility. According to McKinsey, 87 percent of respondents said they’re ready to jump on the remote work bandwagon if given the chance.⁶ But let’s face it. Remote work isn’t for every individual and might not fit the needs of every business. It’s all about finding what works best for you and your unique situation.
3. The gig economy will continue to disrupt traditional industries.
The gig economy has made some significant waves, and one of the biggest impacts is the rise of independent contractors, transforming today’s job landscape. The gig economy’s growth rate has significantly outpaced the traditional job market. From 2010-2020, overall job growth for conventional jobs in the US was only 1.1 percent, compared to the gig economy’s growth of 15 percent.¹
According to Business Research Insights, the gig-based economy reached a whopping $355 billion in 2021—and is projected to hit $873 billion by 2028!⁷
This gig-based economy is also causing ripples in the skills development and training department. Many gig jobs today require specialized skills like coding or design, so workers need to level up their game. The pace of change in the business world means internal teams must form and adapt faster, including how recruiters and talent acquisition managers attract contractors and freelancers.
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References
1. Kolmar, Chris. “23+ Essential Gig Economy Statistics [2023]: Definitions, Facts, And Trends On Gig Work.” Zippia, 16 Feb. 2023, www.zippia.com/advice/gig-economy-statistics.
2. “A Labor Market That Works: Connecting Talent with Opportunity in the Digital Age.” McKinsey & Company, June 2015, www.mckinsey.com/a_labor_market_that_works.
3. “National Survey of Gig Workers Shows Poor Working Conditions and Low Pay.” Economic Policy Institute, 1 Jun. 2022, www.epi.org/national-survey-of-gig-workers-shows-poor-working-conditions-and-low-pay.
4. Shepherd, Leah. “Federal Bill Would Offer Some Legal Protections for Gig Workers.” SHRM, 1 Aug. 2022, www.shrm.org/gig-workers-independent-contractors-bill.
5. Nabilla R, “16 Best Freelance Websites to Find Work in 2023.” Hostinger Tutorials, 18 Aug. 2023, www.hostinger.com/tutorials/best-freelance-websites.
6.“Americans Are Embracing Flexible Work—and They Want More of It.” McKinsey & Company, 23 Jun. 2022, www.mckinsey.com/americans-are-embracing-flexible-work-and-they-want-more-of-it.
7. Business Research Insights. “Gig Economy Market Size, Share, Growth, And Industry Analysis.” Business Research Insights, 23 Oct. 2023, www.businessresearchinsights.com/market-reports/gig-economy-market-102503.
