Gig Economy – What Is It and What It Offers

  • May 30, 2022
  • by Lorea Lastiri
  • No comments
gig economy

The gig economy is a growing trend that offers opportunities for people to work on a freelance or contract basis. This type of economy is perfect for independent contractors who want more flexibility in their work schedules, and it offers many benefits for both workers and businesses. 

If you’re interested in learning more about the gig economy, then read on! We’ll discuss what it is, how it works, and the pros and cons of participating in it.

What is the gig economy?

The gig economy refers to businesses that allow their workers to find gigs, or short-term tasks and projects, through an online platform. This type of economy has seen a dramatic rise in the past decade, thanks to platforms like Airbnb, Fiverr, and Upwork.

The gig economy is often lauded for its flexibility – it allows workers to choose when and where they work, and businesses can hire workers on an as-needed basis.

Businesses are usually based online and use technology to connect workers with tasks or projects in the gig economy. An independent consultant does not necessarily need to work for a single employer. They can juggle between clients for different part-time jobs. The main types of gig workers include:

Project-based workers: Project-based workers are freelancers or independent contractors who complete business tasks or projects. For example, a graphic designer may create a one-time project for a business, or a web developer may work on a project for a few weeks before moving on to the next one.

Task-based workers: Independent contractors or freelancers who complete small tasks and contract work for businesses. For example, you may hire a task-based gig worker to do a business data entry or write a short article.

Gig economy examples

The gig economy can take many different forms, but some of the most popular examples of flexible jobs that will stay in demand in the freelance economy include:

Freelance writing

woman freelancer

Freelance writing involves creating content for businesses on a contract basis. This can include blog posts, articles, eBooks, and website content. It’s a great way to get paid for your creativity and work from anywhere in the world.

👉 Read also about Best Free Time Tracking Software For Freelancers!

Social media marketing

Social media marketing involves creating and managing social media accounts for businesses. It can include creating content, engaging with followers, and running ads. Social media marketing makes up a large portion of the gig economy and is a great way to earn money if you’re good at promoting products and services online.

Web development

Web development involves creating and managing websites for businesses. This can include tasks like designing, coding, and maintaining the website. It is a great way to earn money if you’re good at coding and have a creative eye for design.

Graphic design and branding

Graphic design and branding involve creating visuals for businesses. It includes logo design and web graphics for the product packaging and advertising materials. If you’re good at using Adobe Creative Suite or other design software, you could make a lot of money in the gig economy.

Factors that lead to the development of a gig economy

The gig economy continues to grow in popularity for several reasons. Some of the significant factors that have led to its development include:

The rise of freelancing platforms

In recent years, there has been a dramatic increase in the number of freelancing platforms available. It has expanded the job market and made it easier for businesses to connect with workers and vice versa. Freelancing platforms such as Upwork, Fiverr, and Airbnb have made it possible for independent workers to find work without the lengthy application process required for traditional jobs.

The growth of the internet

The internet has made it possible for businesses to connect with workers from all over the world. This has led to a rise in companies hiring workers remotely. The internet has also made it easier for businesses to connect with gig workers and post freelance jobs.

The rise of the sharing economy

The sharing economy has had a significant impact on the gig economy. Platforms like Uber, Lyft, and Airbnb have made sharing resources possible, leading to a rise in people making money by offering their services on a freelance or contract basis.

The rise of the millennial generation

The millennial generation is often cited as one of the main driving forces behind the gig economy. Millennials are more likely to freelance than any other generation, and they are also more likely to start their own businesses. This is likely because millennials value flexibility and freedom when working.

The global recession

The global recession refers to the economic downturn between 2007 and 2009. This recession led to a rise in unemployment, making it difficult for traditional workers to find jobs. The recession also led to an increase in the number of underemployed people and part-time hires, making it necessary to supplement their income with freelance work.

Increasing costs of living

In many parts of the world, living costs are rising faster than wages. This has made it difficult for people to make ends meet, which has led them to seek out alternative sources of income. The gig economy has provided many people with an opportunity to earn money and make a living.

Effective payment methods such as blockchain

The gig economy has been made possible by developing effective payment methods. Blockchain is a distributed database that allows for secure, transparent, and tamper-proof transactions. This has made it possible for businesses to hire workers worldwide without worrying about exchange rates or cross-border payments.

👉 Read more how freelancers get paid!

Benefits of a gig economy

There are many benefits to participating in the gig economy, both for businesses and workers. Some of the benefits include:

1. Increased flexibility

The gig economy offers increased flexibility for both businesses and workers. Companies can hire workers on a freelance or contract basis, which allows them to get the work done without committing to a long-term relationship. It is helpful for seasonally busy businesses or that have sporadic work needs. 

On the other hand, an independent worker can create his own schedule. This can be helpful for people who don’t need job security but require the flexibility to juggle multiple commitments and prioritize their personal interests. However, working hard and smart in the gig economy is vital to avoid inconsistent income sources.

2. Lower costs

The gig economy can help businesses save money on labor costs. Unlike a traditional employer, when hiring part-time workers on a freelance or contract basis, companies don’t have to pay for health insurance, paid time off, retirement planning, or other benefits.. Hiring independent contractors for gig work can lead to significant savings for businesses, which you can pass on to consumers in lower product prices.

3. Ability to scale up quickly

Small business owners can benefit from the gig economy by scaling up quickly. Companies can connect with workers on a freelance or contract basis to get the work done without worrying about managing employees. With remote workers, you don’t need to provide office space, employee benefits, and equipment which can help to lower your expenses.

4. Access to a global network of independent contractors

The internet has made it possible for businesses to connect with independent contractors from all over the world. This gives companies access to a much larger pool of potential workers than if they were only hiring traditional job seekers. It also allows businesses to find workers with specific skills and experience.

👉 Check also our article about time tracking for contractors

5. Increased productivity

The gig economy can help businesses to increase their productivity. When your company hires an independent contractor, you can get the work done without worrying about managing employee schedules or absences. This frees up the corporate office to focus on more important tasks and increases overall efficiency.

6. Greater innovation

The gig economy can also lead to increased innovation. When businesses can connect with workers from all over the world, they are exposed to new ideas and perspectives for challenging work. The most effective independent workers navigate business challenges and help owners develop new products or services and find new ways of doing things.

7. Output production

The gig economy can help businesses to increase their output. When you hire an independent contractor to work on a project by project basis, you can get the work done effectively without worrying about employee management. Outsourcing gig work frees up managers to focus on more critical business issues leading to increased efficiency overall.

8. Greater independence for gig workers

The gig economy can offer self employed people a greater sense of freedom. Independent workers have more control over their lives which is helpful for people who need the flexibility to juggle multiple commitments or who want to work from home.

9. Improved work-life balance

The gig economy can offer independent workers a better work-life balance. When you are your own boss, you choose when and where you work, which gives you more control over your life. 

👉 See how to take care of work-life balance!

How companies can adapt to the gig economy

As the gig economy grows, businesses will need to adapt to stay competitive. Here are some ways that companies can adapt to the freelance economy:

Review the existing hiring structure

Businesses will need to review their existing hiring practices and structures to ensure that they can take advantage of the gig economy. They should change how job postings are created and advertised and the interview and selection process. International PEOs can help businesses with this aspect of hiring freelancers and remote contractors.

Use technology to connect with workers

Technology helps connect businesses with workers in the gig economy. This includes using online platforms to find and connect with workers and using software and mobile apps to manage work tasks and deadlines.

Offer flexible working arrangements

Businesses will need to offer workers in the gig economy to get and retain the best remote workers. It may include offering flexible working hours, the ability to work remotely, and the opportunity to choose their own projects.

Consider benefits or alternative compensation for remote workers

Businesses should consider offering benefits or alternative compensation for workers in the gig economy. Providing bonuses for meeting deadlines or offering health insurance for gig workers can significantly boost productivity.

Train managers on how to manage remote teams

Businesses will need to train their managers to manage remote teams effectively. They should know how to use technology to conduct market research, connect with workers, and recruit and hire them.

Gig economy statistics and trends

The gig economy is growing rapidly. Some of the statistics and trends that illustrate this growth include:

Workers opinion stats

1. 99% of remote workers would like to continue their gig work until the end of their careers.

2. 86% of remote workers feel more productive when working remotely than in a traditional workplace.

3. 78% of gig workers feel claim they are happy than full-time employees.

4. 71% of telecommuters would quit their jobs if they could no longer work remotely.

5. 77% of millennials would rather have temporary positions to work remotely than become full-time employees.

Gig economy size stats

1. By 2023, the gross economy of the gig economy may reach $455 billion.

2. There are more than 57 million remote workers in the United States.

3. 85% of employees in 6% of companies in the US are gig workers.

4. In Australia, there are at least 2 million gig workers.

Gig platforms statistics

1. Upwork is the largest freelancing platform with over 19 million registered freelancers.

2. Fiverr is a freelancing platform that focuses on digital services with over 300,000 active gigs.

3. Airbnb is a home-sharing platform with over 4 million listings in 191 countries.

4. Uber is a ride-hailing platform available in over 600 cities worldwide.

Gig economy platforms

The gig work platforms are the venues that connect businesses with gig workers. There are several types of gig work platforms, including:

Upwork – The World’s Work Marketplace

Upwork is a global freelancing platform that connects businesses with freelancers. Companies can post projects and flexible jobs on Upwork, and freelancers can bid to work on them. The gigs on Upwork are typically temporary positions for short-term or one-time projects. Upwork has regulations and controls such as escrow payment to protect businesses and freelancers.

Fiverr – Connects Businesses with Freelancers

Fiverr is a global freelancing platform that focuses on digital services such as website development, graphic design, and online marketing. Fiverr allows businesses to post freelance jobs, and remote workers can bid to work on them. On Fiverr, clients can also choose a gig worker based on reviews and ratings. Fiverr has a dispute resolution system in place to protect businesses and freelancers.

Airbnb – Opens the Door to Interesting Homes and Experiences

Airbnb is a home-sharing platform that allows people to rent out their homes to guests. Airbnb offers various services to help make the experience for both hosts and guests as smooth as possible. Airbnb also has a review system in place so that both hosts and guests can leave feedback for each other.

Guru – Freelancing Platform 

Guru is a freelancing platform that connects businesses with freelancers. Companies can post jobs or projects on Guru, and freelancers bid to work on them. Guru has various features to help companies find the right freelancer for their project. Guru is the best platform for experienced gig workers to apply for jobs such as being a senior editor or project manager.

TaskRabbit – Same-Day Service Platform

TaskRabbit is a task-based platform that connects businesses with workers who can complete the tasks. TaskRabbit has a vetting process to ensure that the workers are qualified and reliable. TaskRabbit also offers a satisfaction guarantee to businesses.

Instacart – The World’s Largest Online Grocery Service

 

Instacart is one of the most popular grocery delivery services that connect businesses with shoppers. Instacart allows firms to set their own prices and choose the delivery times that work for them. Instacart also has a quality control process to ensure that the delivery services meet the customer’s demands.

Uber – Ride Hailing Platform

Uber is one of the most popular ride hailing apps that allow businesses to connect with drivers. Uber offers various services such as UberX, UberPOOL, and UberSELECT. Uber also has a rating system so businesses can choose ride hailing drivers based on reviews and ratings.

DoorDash – Food Delivery & Takeout

DoorDash is among the best food delivery apps in the gig economy. DoorDash allows businesses to set their prices and delivery times. DoorDash also has a quality control process to ensure that those delivering food do it on their own hours to increase productivity.

Wrapping up…

The gig economy is a growing trend that offers businesses and workers many benefits such as flexibility and lowered costs. The gig job platforms such as Upwork, Fiverr, Airbnb, Guru, and TaskRabbit are the venues that connect businesses with gig workers.

If you’re looking to improve your productivity and better understand how you and your remote team spend your time, then sign up for a free trial of TimeCamp! TimeCamp is a time tracking software that offers businesses and remote teams features such as automatic time tracking, detailed reports, and invoicing.

 

Lorea Lastiri

Lorea is a freelance SEO writer and has spent the last five years researching and writing about time management, productivity, and SaaS. She's an avid traveler, skier, and surfer; when not in the office, you can find her riding waves or exploring the alps.

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