For traditional businesses, the time and cost savings of hiring gig workers are appealing in terms of finding talented, qualified contractors for a one-off or short term project.
As of May 2015, 15.5 million people in the United States were reported as self-employed, according to a report by the Bureau of Labor Statistics.
In case you haven't heard about the "gig economy," it's not-so-quietly taking over the traditional workforce.
The gig (or sharing) economy is one in which independent freelancers provide services to consumers and businesses.
How the Gig Economy is Quickly Surpassing the 9-5
In the last 20 years, the gig economy has grown about 27% over traditional means of employment. Traditional employment being what you classify as a full-time, 9-to-5 job.
At WeGoLook for instance, we’ve grown from 7,400 gig workers in 2012, to now well over 30,000.
You may also be familiar with the current disruption in the ground transportation industry.
In companies such as ride-sharing giant Uber, the number of gig workers has grown 44% over the number of traditional workers in the same sector.
It should come as no surprise that large metropolitan cities are taking the first bite of the gig economy apple.
CNBC reported that within the last 4 years, 25 of the largest metro cities have seen up to an 81% of growth in the gig economy.
According to research provided by The Brookings Institution, the IRS classifies "non-employer firms" as a way to measure the gig economy workers.
Using that as a yardstick, businesses falling into this category report making over $1000 per year and have almost no employees on the payroll. Most are what we call 'gig workers.'
Is this figure an actual depiction of the number of gig economy workforce? Not by a longshot.
More than likely, the number of gig economy workers is being underestimated.
According to an online survey conducted by the National Freelancers Union and Upwork, a freelancing job board, approximately 55 million working Americans earned money by freelancing in 2016.
These figures include those with multiple sources of income such as freelancers, independent contractors, temporary, and part-time workers.
“We don’t have a specific measure of every single person using these platforms, and we are likely undercounting.” -- Mark Muro, Director of Policy at The Brookings Institution
Why the Gig Economy is Overtaking Traditional Employment
For some, working in the gig economy happened either out of necessity or by accidentally falling into it.
However, the mindset is shifting from viewing the gig economy as being unstable, or a less-than-desirable means to put food on the table.
Faced with layoffs and slow recession recovery in corporate America, workers have scrambled to find ways of making additional income.
While working in the gig economy doesn't provide the perks of a 9-to-5 job like health insurance or stable hours, it does offer flexibility and freedom.
Also according to the on-line survey, up to 63% of freelancers participated in the gig economy by choice.
This is also true for WeGoLook Lookers, the vast majority of who joined our platform by choice, rather than necessity, to increase their gig portfolio.
Many gig workers enjoy the opportunity to pepper their portfolio with a variety of projects and clients. Others declare they wouldn't be trapped in a 9-to-5 job for all the money in the world.
As cited in a working paper by the National Bureau of Economic Research, of the top 10 reasons the gig economy is so appealing to gig workers:
- 87% of full-time freelance workers said that this type of work affords them the flexibility to work any hours they choose.
- Another 85% of full-time freelancers believe the gig economy gives them more control over their destiny, providing opportunities to earn more money and growth.
Temporary or on-call workers are more intent on finding a permanent workplace to call home.
Yet, up to 80% of freelancers or gig workers seem to prefer the gig economy lifestyle over that of a traditional employee.
Due to innovations in technology, it's becoming so much easier to connect talented gig workers with businesses.
Just look at the increased number of websites, apps, and job boards available for the sole purpose of making these connections.
The ability to work remotely with personal devices and apps allows these connections to take place on-demand.
This technology is knocking down the biggest obstacles of finding clients and a sustainable workload.
The gig space is no longer just for writers or web designers. Professional services such as accounting, attorneys, and consultants are jumping on board.
The growing popularity of co-working spaces, such as WeWork, which offers resource and logistical support to freelancers, is a great indicated of the growth of this new employment model.
So much so, that WeWork was recently valued at $10 billion. Not bad for a startup in support of the gig economy!
For traditional businesses, the time and cost savings are appealing in terms of finding talented, qualified workers for a one-off or short term project.
Without having to deal with hiring and a big investment in training, gig workers can simply hit the ground running.
As businesses rise to meet the demands of gig workers, this trend will surely continue to gain momentum.