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How Businesses are Adapting/Keeping up with the Gig Economy

"A common term for this new workforce is the "flex economy," or the "gig economy," but whatever you call it, it's certainly non-traditional."   - Cio.com

With Generation X'ers and Millennials firmly making their mark in the job force, the popularity of the sharing economy is booming.

Sorry baby boomers…

Given the demands of workers today are changing, businesses realize that they need to take the needs of their employees into consideration if they want to hire top-notch, qualified people.

The Sharing Economy Isn't A New Concept

Contrary to popular belief, the sharing economy concept is not shiny and new. With the lightning speed of new technology, the job market has reached a point of making the sharing economy more possible.

Possible, and very successful.

In a 2014 report by Nielsen, the sharing economy has an estimated value of approximately $26 billion.

Incredibly, 68% of consumers indicate their willingness to share assets with their peers, while 66% say they'd be interested in purchasing goods/services shared from their peers.

According to the Bureau of Labor Statistics, 15.5 million people in the United States were self-employed as of May 2015.

Hold on to your hat, but that's an increase of about 1 million since May 2014.  And the trend is predicted to keep gaining momentum.

A Trend Toward Gig Workers

If you listen to a recent study by Fieldglass, a vendor management software company, the future trend is to hire non-employee, or freelance, workers.

The study found that in 2015, "nearly 35% of today's total workforce is comprised of non-employee workers."

What Are Non-employee Workers?

Non-employee workers include freelancers, gig workers, temps, and independent contractors.

And according to Forbes, by 2020, 50% of American workers will fall into this category. Accordingly, businesses are paying attention to this trend.

Approximately 95% of businesses believe that securing non-traditional employees is a good way to grow and run a successful business.

In their study, Fieldglass predicted that by 2017, non-employee workers will make up as much as 25% of the total workforce. 

Well, they were wrong. As of 2016, contingent and independent workers made up 34% of the American workforce.

On-line hiring platforms, social media, job boards and freelance sites make it far easier for businesses to discover these workers.

Also, the ability to call out specific skills and job requirements makes interviewing easier and faster.  Employers can scan through profiles, job skills, and experience in a lot less time and stress on staffing departments.

Software development and technology is evolving at a rapid pace in order to keep up with these changing demands.

At the end of the day, this means a leaner hiring process and cost-savings at all levels of staffing and employment management.

How Businesses are Adapting: Technology Adoption

Embracing the sharing economy is much more than simply new hiring strategies, it's technology as well.

As the sharing economy grows and hiring trends shift, businesses would be wise to incorporate non-traditional, or peer-to-peer sharing options, into their business plans.

Not only can hiring non-employee workers save businesses money on full-time benefits, sick time, vacation and retirement plans, but on travel and other corporate expenses, as well.

Freelancers and gig workers are typically remote, which means even more cost savings.

Consider that companies are now authorizing business travelers to use Uber and Airbnb.

Yellow Cab

Or, Yellow Cab San Antonio, who has taken an "if you can't beat them, join them" approach. The company has tapped into a mobile app ZTrip, which functions very much like Uber.

ZTrip is a mobile app that allows independent taxi companies to access and schedule fares. As a real convenience, reservations can be made and paid for through the mobile app right on your cell phone.

Sound familiar?

Getting on board with shared economy technology came about for Yellow Cab due to a significant loss in market share for the taxi cab business at the San Antonio International Airport over the past year.

Upwork

As another example, look at Upwork, a gig-based company connecting freelancers with businesses with hiring requirements.

Upwork, born out of a 2014 merger between oDesk and Elance, reports that almost 300,000 design-related jobs were posted on the site in 2015.

In one short year, that's an increase of 28%. Not too shabby!

In doing further independent research, Upwork also claims that 60% of companies use freelancers for content marketing.

Upwork recognizes the market demand and on its platform, provides a way to connect businesses with freelance workers looking to provide their services.

Within an average of about three days, businesses and freelancers can connect, hire, and begin working through Upwork.

Gig Workers and Hiring Efficiencies

How long does it take your business to hire new employees? Finalizing a job poster, advertising, interviewing, singing papers, finding workspace, training, and so on.

Clearly a rhetorical question, but considering gig workers for your company can shave months off you traditional hiring process.

Thanks to advances in technology, it's easier than ever to work remotely or get lucrative freelance gigs.

Also, there is an increase in companies dedicated to connecting businesses with freelancers.

An example of one such platform is HourlyNerd. This start-up was created by Harvard MBA students to match freelance business consultants with companies.

Contently is another on-line platform matching businesses with freelance writers, with plenty of work in the pipeline.

Or WeGoLook, which connects enterprise clients with over 30,000 field agents ready to complete various asset verification tasks.

How Businesses are Keeping Up with the Shared Economy:  Thinking Outside the Box

As little as five years ago, companies would have not even entertained the idea of the sharing economy.

Staying in a private home while on a business trip? Nah!

Hailing a ride from your cell phone from an independent contractor? Get outta here!

Now, it's time for businesses to seriously consider the importance of adopting these options into business processes.

As of 2016, 25% of business travelers use ride-sharing services like Uber. Likewise, 10% of all business lodging business came from Airbnb.

Both airlines and travel agencies are onboard with this trend, offering those on the road for business the sharing economy options such as Airbnb and Uber.

Businesses realize that employees who travel like the flexibility, and in reality, it can save the company big bucks budgeted for business travel.

Co-Working Trend

In major cities throughout the U.S., an up-and-coming trend is to be found in co-working spaces.

These work arrangements, built in mind for freelancers, prevent the isolation one can experience working outside a traditional 9-to-5 job.

One such co-working space company is WeWork, currently expanding to major cities throughout the world.

WeWork offers its sharing economy workers support and services such as web assistance, human resources, and accounting support. This removes some of the fear independent face in dealing with these things on their own.

If you think WeWork is a flash in the pan, keep in mind that it has an estimated value of $10 billion.

Reviewing Unused Assets

In the spirit of recycling and going green, and if you have an established business, maybe it's time for a bit of housecleaning. While doing so, you may come across some old, or unused assets lying around.

Recently, TD Bank reviewed their archives to see what materials could be used to assist in training employees. Spoiler alert: they found a lot, and it saved them tons of money!

Since training can be a significant business expense, re-purposing assets can save a lot of money on employee manuals and training materials.

Final Thoughts

With 50% of our workforce projected to be freelancing by 2020, it's important to start your business planning now.

Get your team together, discuss this trend, and brainstorm the effects it will have you.

This isn't just a hiring issue; it will affect your supply chain, customer service, technology, and so much more.

The idea behind the sharing economy is to optimize under-utilized assets.

Clearly, businesses are beginning to think outside the box. Are you?