What is the Gig Economy?

What is the gig economy?

The gig economy is the system in which organizations and businesses employ freelancers and contract workers to provide goods and services. People who choose to work on a contract or freelance basis are seeking more flexibility and job freedom. Further, the job freedom mentality shifts the work-life balance concept on its head. For people with this mentality, it’s not about scheduling life around your work schedule—It’s the opposite. 

The gig economy isn’t just beneficial for freelance and contract workers though. The Internal Revenue Service defines the gig economy as an “activity where people earn income providing on-demand work, services, or goods”. So, it’s not only businesses like Uber, Doordash, and Instacart that can participate in the gig economy. Any business that contracts freelancers and contract workers is taking part.

What does the gig economy mean for employers looking to hire?

To stay competitive in the current labor market, employers are getting creative about the ways they hire for roles. Those who left or lost their job in the pandemic may not want to return to the labor force in a full-time capacity. Embracing the gig economy, part-time work, and overall “job freedom mentality”—including flexible hours, contract work, remote and hybrid options—can open up creative opportunities for filling positions.

Gig work is gaining popularity in the US, but employers overseas have found success in the gig economy for decades. EU countries are seeing rising amounts of various gig economy work. Specifically, a report by Eurofound shows that job sharing has a high potential to result in a mutually beneficial outcome for employers and employees. The report also refers to gig work as platform work. This term arises from the concept of hiring people through a platform, or app, for contract or freelance work.

However, Gig work doesn’t just happen on platforms. Some people have started their own businesses and won’t ever be returning to their old employer. New business starts surged during the pandemic, and it’s not just sole proprietorships.

New business applications from firms likely to hire employees surged as well, from 987,500 in 2019 to 1.4 million in 2021. This may be a bit painful for legacy employers who are holding out hope their workforce will return in full. But with workers remaining on the sidelines, businesses and organizations will need to adjust their expectations. It will be more important that workers come back than where they come back to. 

How do skills play a role in the gig economy?

If you’re having a hard time finding the right talent for a job that encompasses many skills, gig work can help alleviate the pressure of finding the perfect fit. It turns out that teamwork really does make the dream work. Or in this case, multiple part-time or contract workers can accomplish the work of one role together. Further, breaking down roles into skills and duties can make the work simpler, expectations clearer, and even lower the barrier of entry. 

For example, a Marketing Specialist role includes skills such as email marketing, data analysis, computer literacy, and data entry. However, computer literacy and data entry are less in-demand skills, resulting in a lower barrier of entry for a potential employee. These parts of the role needing to be filled can be shifted to an existing employee, or hired out by someone who has the skill set needed. Then, the email marketing and data analysis skills can be posted as a part-time position with the potential to fill with a gig worker who specializes in marketing. In this case, employers can divide the duties to conquer the role. 

In addition, employers can use skills data and tools to determine the availability of skills in the market. This way, you can align your expectations with what is available in the market. Our skills extractor can pull over 30,000 skills out of any job posting, resume, or syllabus. Then, align availability to expectations by making sure there is actually talent for the skills you want in a role. You can even use skills data to map demographic reports to identify specific populations who might be more amenable to flexible work, like gig work. 

Overall, the data is clear—the gig economy is here to stay. Employers have an opportunity to fill job postings with freelance or contract workers by getting creative and embracing the gig economy. In addition, skills data can make filling jobs even easier by pairing availability and demographics of skills in the market. 

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