We all keep hearing about hiring temporary or part time employees for a role on contract basis. But why do organisations opt to do so? Why can’t organisations just hire full time employees? Also why do people want to work as a temporary or contractual employee?
These employees are gig workers and a part of the Gig economy. Today we will talk about the gig economy and discuss that companies choose this by analysing the benefits of gig economy. Gig economy has become a popular way of hiring due to its utility. It is a rising trend with a number of factors contributing to it.
So stay connected as we are going to discuss the benefits and problems of a gig economy. Also we will guide you with some jobs that will suit you in the gig economy.
What Is A Gig Economy?
Gig economy is a class of market system in which firms engage independent employees for short term commitments. Gig is slang for a task that lasts for a short period. In the gig economy different employees with different skills from remote areas work together with an aim to earn money. These independent employees are called gig workers. Gig workers exercise high flexibility and a little independence than permanent employees. But they lack job security.
Major Components Of The Gig Economy
There are three types of workers in the gig economy and they are as:
A. Temporary Employees
Organisations hire temporary employees for a specific period. Other than these they have to perform all the duties of a regular employee. But they are paid less than the other employees.
Mainly freelancers are professional with a specific set of skills. Organisations hire them for some specific projects or assignments. They receive incentive on the basis of progress in assignments.
C. Project Or Part Time Workers
Part time workers work for a few hours a day. They are there for performing a part of assignment that does not require a full time employee.
Benefits Of Gig Economy
Gig economy is beneficial to both the stakeholders of the economy namely workers and the employers. We will be discussing the benefits for both of them separately. Firstly,
- For Employees
Gig economy helps and promotes a good feeling of confidence among the employees. Some of the benefits of gig economy are as:
1. Beneficial For Female Employees
The trend of the gig economy is of high advantage especially to the female workers. It is beneficial for the women who want to take a break from their careers due to any reason like marriage or childbirth. After that if they wish to continue they can work remotely and still can be a working woman.
2. Workspace Freedom
One of the main benefits of gig economy is that the gig employees work remotely and they don’t have to be dressed sitting in a chair. All they have to do is to complete their tasks on time irrespective of whether they do it during the day or night. It also increases the confidence and satisfaction level of employees. Also, there is almost no interference from the management. Studies show that 80% of the employees working as a part of gig economy are more satisfied than when they were doing conventional jobs.
3. Way Of Gaining Experience
As college students have less time for working. And they want to gain the practical knowledge of their studies so this type of market system helps them to get a part time job for doing so. It helps them to have all essentials before entering the full time job. It also helps them to earn a sort of money for their own spendings.
4. Savings On Expenses
Most gig economy workers work remotely from their home. It helps them to save a lot of money as they don’t have to spend on rent, food and transportation. Also it saves them a lot of time as they don’t have to commute to the workplace which spares them extra time to work.
5. No Age Bar
Business organisations prefer hiring young employees for the roles. But in the concept of gig economy they also serve the retired employees and old ones. It helps them to keep themselves busy and also helps them to earn some money for their expenses.
- For Employers
After studying the benefits to employees now we will go through some of the advantages to the employers also. They are as:
1. Cost Effective Technique
One of the major benefits of gig economy is a cost effective technique for the organisations. Because the employers do not have to spend much for training and also facilities at the workplace. In addition to this, perks are not there for gig workers. Thus organisations save money on these expenses and just pay for the real labour of the freelancer.
2. Quick Scaling
Startups do not have that much funds in the beginning to provide for facilities like good workspace and other things. Also, they do want to grow fast and for this they need professional services. By saving on other things they can pay for the services of the freelancers.
3. Higher Efficiency
Generally freelancers possess great skills and expertise in their field. They can give them more than a full time employee at the same time. Gig economy helps the organisation to perform the operations in an effective and efficient manner. Higher efficiency leads to cost saving and more profitability.
4. Providing 24*7 Services
An organisation can offer its customer 24 hours service by hiring employees from different time zones. They can be working remotely across the globe. It will help them to grow business and stay in touch with the customers and clients around the globe. Under gig markets personnel like freelancers and part time workers are there which will help you to achieve this goal.
Problems Of A Gig Economy
Yes there are numerous benefits of gig economy but there are some problems too. Some of the major problems of the gig economy are as :
1. Inconsistent Income
A gig worker is always worried about his next assignment because if he has no work he will not make any money for that period. Workers in the gig economy have to go through unexpected changes in their next position. Gig economy always depends on market conditions like recession.
2. Demand-Supply Mismatch
Unemployment is a major problem for the economy. It creates a problem in the gig economy. Because there are a number of workers looking for an opportunity but the opportunities there are very few. It also affects the salary of gig workers as there is a mismatch between the demand and supply.
3. Lack Of Workspace Culture
For some workers it is that they miss the social aspects and the bonding at a workplace. For sure gig economy offers flexibility but it also develops a feeling of isolation from the coworkers.
4. No Perks And Benefits
Full time employees do not get that much independence and flexibility but they receive many perks. For example health insurance and reimbursement of other expenses. A gig worker has to manage his health insurance and retirement planning on his own. This makes the gig economy a bit difficult for them.
5. Effect On Job Market
When there are only temporary jobs in the market it becomes difficult for job seekers to develop a career and establish relationships. A trend of temporary jobs rules out full time jobs.
6. Less Privacy
It is a feature of the gig economy system that almost all workers are working remotely but it is also a drawback of it. As after hiring the employer has to share his confidential information with those gig workers and it creates a threat to it. Because it is difficult to track the information you have shared.
7. Retaining Great Workers
As high expertise workers are always in demand it has become difficult for organisations to retain them. And if they want to retain those workers they have to pay very high salaries. For an incentive system in such a situation you can use performance based incentives.
What Are The Common Jobs And Industries In The Gig Economy?
1. Government Researches: Conducting surveys and managing projects for the government.
2. Finance And Accounting: Outsourcing for auditing and bookkeeping activities.
3. Photography: Hiring photographers for capturing for enterprises.
4. Software Development: Developing and managing softwares on for Companies.
5. Freelance Writing: Writing blogs and contents for brands and businesses.
6. Transportation: Hiring drivers and accommodation for industrial use.
7. Construction: Constructing and providing services for construction.
8. Education: Inviting guest teachers and private tutors at home.
9. Art And Music: Professional artists and musicians for music studios.
10. Graphic Design: Hiring graphic designers for designing visual communications.
We can clearly see that it has gained a lot of popularity over the time as there are a number of benefits of gig economy. It is due to factors like availability of finance, digitalisation etc and lockdown. We can say that gig workers are now an integral part of many organisations.
There are numerous advantages and disadvantages to a gig worker. All of us can agree that this trend has a great impact on the enterprises. It has given an opportunity to the new moms, caretakers, students and to people far from metro cities. Also it has given an opportunity to startups to have a good start by hiring these professionals.
Thus, we can conclude that the gig economy system impacts the overall economy and makes it better for all of us.