Recently, the word “gig economy” has become a buzzer that is transforming the world of work and changing the landscape of traditional employment. According to a report by Fountain, 66% of large businesses are now beginning to outsource their work to freelancers. This means that the world has shifted from the era of working traditionally (mostly 9-5 in an office) to a period of modern operations where employees can work with more freedom and become versatile in executing their duties.
For many years, people were known to be working for a particular employer at a scheduled time, but thanks to the introduction of technology, employees don’t need to be at a specific location when performing their jobs.
Although the gig economy has gained prominence over the years, the pandemic skyrocketed its fame, and nowadays, companies who don’t want to be left out in their industries need to look for ways to keep their employees satisfied. And so this has led to the pivoting procedure for companies to find ways in which they can understand the modern workplace demands. Since the gig economy is what most millennials and Gen Zs are after, we’ll be taking a look at impact it has had on traditional employment.
Understanding the Gig Economy
You may have come across those talking about “getting gigs” while doing their jobs, and you may begin to wonder what it’s all about. Well, guess what? The gig economy is a system that has come to stay, and it’s a free market network in which large companies can hire freelancers (otherwise known as independent marketers) for short-period commitments. The gig economy stands as a digital platform where businesses and individuals connect to exchange for money and jobs or vice versa. There are examples of the gig economy, and they include the following:
- Project-based work (getting paid for a project)
- Part-time hires (working less than the regular work hours)
- Freelancing (getting paid per work done)
- Independent contractors (executing contracts and getting payment on a contractual basis)
In a gig economy, you need to note that three common factors make up for its existence, and they include the following:
Also, there are gig economy jobs in industries which consists of common position that includes:
- Art and design: graphic designers and musicians
- Administration: administrative assistants
- Software development: DevOps engineers and product designers
- Information technology: mostly network analysts and engineers (for information security)
- Writing: copywriters and content writers
The gig economy has some benefits that are as follows:
- Availability of greater independence
- Easy business scalability
- Effort dependent pay
- Flexibility in the workplace
How the Gig Economy Is Impacting Traditional Employment
It’s already becoming known that traditional employment, which is distinguished as long-term working and regular salary payment, is gradually being displaced by the prominence of the gig economy. With the help of advanced technology, businesses can now connect with freelancers and outsource their jobs without facing as many challenges. That being said, we’ll be discussing some of the impacts that gig economy is having on traditional employment in more detail.
1. Policy Issues
Undoubtedly, the prominence of the gig economy is posing a significant threat to the existing policy challenges affecting traditional employment. The laws of labor were designed originally for traditional jobs, so amny concepts do not even apply to gig workers. In fact, in some countries, they are experiencing the misclassification of employees, benefits accrued to workers, and standards of wages.
2. New Type of Job Security
Unlike traditional employment, the gig economy brings something different. When working as a freelancer, you have the freedom to gather work from many companies. Therefore, the number of jobs you opt to take on will directly affect your financial stability. Being a freelancer can help you retain job security, but also offer the freedom to explore more offers and more employers.
3. Technological Advancement
Nowadays, through the constant evolution of technology, there are platforms where large businesses can connect with clients to offer jobs. Aside from the fact that companies can engage with clients, there’s a talent pool from which they can choose who to work with. In fact, the availability of smartphones and internet speed has made it easier for the gig economy to become efficient, with companies maximizing it to their advantage.
Rapping the whole situation up, it’s evident that the gig economy has come to stay and isn’t going anywhere, all thanks to the regular evolution of technology tools and the availability of fast-speed internet to aid gig workers. The gig economy has created an excellent chance for freelancers and other independent employees to thrive. Some of the impacts of the gig economy on traditional employment include policy challenges, job security, and technological advancement.