There have always been Gig-workers: actors, artists, musicians, consultants, salesmen, real estate agents, handymen, etc. There are several reasons why the gig-economy continues to grow. 57 million US workers in 2018, approximately 36% of the US workforce, appear to prefer freelancing over full-time employment, primarily since it provides them with greater flexibility and independence. Estimates are that 87 million US workers will be participating in the gig-economy by 2027. Non-traditional employment, particularly through gig economy platforms, enables individuals to pick their own hours, place of employment, and clients. Firms also can benefit from using a gig-workforce through more efficient management of expenses, increased access to a higher variety of skills, and better management of resources via on-demand staffing.
There are three main factors which are driving the growth of the gig-economy: 1) the need for businesses to better manage resources to match business demands, 2) workers wanting more control of their work schedule for a better pay and work/life balance, and 3) technology which enables real-time remote coordination and management of work. Even though working in the gig economy offers a lot of freedom and flexibility, workers in the rapidly evolving gig-economy are finding they face new challenges. To broaden the expansion of the gig-economy into the field service industry, corporations must leverage new technologies, management platforms, and processes to manage projects, as well as offer access to “human services” to support the needs of a gig-workforce.
Workforce Advantages and Challenges of Gig-Economy
- Flexibility – Research shows that 70% of freelancers say the main reason they do gig-work is to attain better work-life balance, with 60% saying their working conditions are flexible. This allows the gig-worker to work when they want, how long they wish, where they want, and on the jobs they are most interested and comfortable doing. This flexibility also provides ability to engage in continued education, certification, and licensing activities. The Gig-worker can specialize or become multi-functional.
- Independence – Gig-workers have a sense of “working for themselves” versus working under a management system and/or for a company.
- Variety – Gig-work provides the workforce access to a variety of job options, which can help workers avoid boredom and be energized in their ongoing job activities. The Gig-worker can control their own destiny and develop their own interests while taking advantage of incremental opportunities where they live and work.
- Pay – Gig-work often yields a higher pay rate than regular employment status would provide. The Gig-worker directly benefits from their productivity and skills and are not “held-back” by others. Also, surveys show that 19% of gig-workers use gig-work as extra income. Pay can also change more rapidly based on demand and skills availability versus traditional periodic pay raises for regular employment positions. Finally, gig-workers have the freedom to choose what jobs they wish to work and can select the pay level they see is most competitive.
- Tax Deductions – The Gig-worker is essentially a business and can deduct legitimate business expenses and make investments in tools: vehicles, computer, hand tools, etc.
- Benefits – Gig-workers often must identify their own sources for health insurance, retirement plans, 401K, IRAs, life insurance, and matching contributions to a savings plan. 54% of independent contractors have no access to benefits through their employer or group coverage plan like a professional association; 40% can only get medical insurance for themselves if they’re married to someone who has it.
- Taxes – No tax is deducted from the worker’s pay to cover federal or state taxes. The worker is responsible for paying their taxes quarterly to avoid penalties at the end of the year.
- Isolation – Often limited to no regular contact with other workers. No sense of community or cultural solidarity, normally provided to employees who meet regularly in an office building, manufacturing, or warehouse environment.
- Potentially Inconsistent Income – Gig-work income is not guaranteed (like a traditional job with hourly wages) and can fluctuate depending on available assignments and the ability of the worker to identify opportunities.
- Limited Guidance – Most gig-workers are independent contractors and do not have the benefit of a manager, project lead, or peer employee to continually provide advice and/or teach them how to work efficiently.
- Stress, Burnout, Exhaustion – Gig-workers must find their next gig or deal with frequent changes to their present assignments. Gig-workers are not provided a guarantee of continued work or of new assignments once the present job is completed. Gig-workers can also face rapid changes in salary.
Addressing Challenges Faced by the Gig-Workforce
- Access to Benefits – Companies contracting with a gig-workforce could provide access to health insurance plans, retirement plans, 401K and IRA plans, life insurance plans and membership in group travel discounts (hotels, rental cars, airlines, buses, etc.). Other benefits include access to therapist, counselors, and coaching.
- Worker-to-Worker Engagement – Provide a specialized social media platform for Gig-workers to engage with each other and discuss common challenges and best practices found to complete and/or support assignments. This also allows a medium for the workforce to discuss issues of stress, finding jobs, pay, and general work/life challenges.
- Access to Training/Continuing Education – Companies and academic organizations can provide programs and support for gig-workers to gain additional training, certifications, licensing, and other skills development resources, increasing the capacity and capabilities of the gig-workforce.
- Tax Management Tools – Provide the gig-worker access to tools and automated deduction from pay to help estimate and pay their taxes.
- Job Portal – Provide a job portal to expose gig-workers to job opportunities across an industry, a region, and/or an expertise.
- Transparency in the Project Management Platform – Enable the workforce to see all available projects and their related work activities, both completed and in process. Allow workers to engage with each other to share best practices, challenges, helpful tools/apps, skills requirement, and other items that would benefit them in their support of a project. Finally, allow the gig-worker to sustain a record of their skills, experience, accomplishments, and job performance, which can be used to support access to future opportunities.
Note that there are many challenges and opportunities in expanding the use of the gig-workforce in the delivery of field services. With the development and deployment of the right technologies, tools, programs, platforms, and processes, workers and companies can benefit from enablement of the gig-workforce to deliver field services.
The Gig Economy by Edison Research: http://www.edisonresearch.com/wp-content/uploads/2019/01/Gig-Economy-2018-Marketplace-Edison-Research-Poll-FINAL.pdf
Gig Economy by PYMNTS.com: https://www.pymnts.com/wp-content/uploads/2019/04/Gig-Economy-April-19.pdf
Global Gig Economy by Mastercard: https://newsroom.mastercard.com/wp-content/uploads/2019/05/Gig-Economy-White-Paper-May-2019.pdf
Gig Workers in America by Prudential: https://www.prudential.com/wps/wcm/connect/4c7de648-54fb-4ba7-98de-9f0ce03810e8/gig-workers-in-america.pdf?MOD=AJPERES&CVID=mD-yCXo
State of Independence in America by MBO Partners: https://s29814.pcdn.co/wp-content/uploads/2019/06/MBO-SOI-2019.pdf