Gig Economy – Definition, Advantages and Disadvantages!
While freelance or ‘gig work’ has always been an option for supplementing one’s income, it is now becoming the primary mode of employment for an increasing percentage of the urban workforce. Any economy where temporary work positions are common is known as a gig economy.
📌What is a Gig Economy?
Gig economy is a free market system where firms engage independent workers for short-term commitments to fill in temporary positions. Here, a gig worker is a part of a broad category that includes a wide range of positions. Freelancers, independent contractors, project-based workers, and temporary or part-time personnel are all examples of gig workers.
Gig work can range from working as an uber driver or a restaurant delivery executive to writing code or freelance essays.
📌Common Gig Economy Jobs and Industries:
Gig economy occupations include well-known roles in a variety of industries and jobs. Here are a few gig economy examples:
•Finance and accounting
•Administrative assistance
•Graphic design
•Art and music
•Carpentry and similar trades
•Education – especially tutoring
•Copywriting and content writing
•Information security engineers and network analysts
•Photography
•Project management
•Software development
•User experience and interaction design
•Transportation services
📌The Pros and Cons of Gig Economy for Companies:
✅Advantages of the gig economy:
1️⃣Cost Effectiveness:
The cost is one of the reasons to begin taking advantage of the gig economy. Because firms do not have to pay for benefits or onboarding fees associated with a full-time employee, freelancing employees are frequently less expensive than other workers. This helps companies to save costs and just pay for the real labour provided by a freelancer.
In some cases, hiring talent in your local geography might also be far more expensive than other parts of the country or the world. Companies might be incentivized to explore offshore gig workers here.
2️⃣Support for Short-term Projects:
Perhaps your organisation merely requires minor assistance in implementing a new programme or service.
When you engage a full-time employee, you must find work for them when the project is completed, but this is not the case when you use the gig worker. When the project is over, the gig employee can either migrate to a new project, or can be let go with far less paperwork than a full-timer.
3️⃣Ability to Scale Fast:
Many smaller businesses or startups had discovered that hiring freelancers allowed them to scale their business quickly. Small businesses benefit the most from the gig economy because they do not need to offer office space, equipment, or perks.
They can save time and money by not having to establish healthcare or HR processes and instead hiring individuals to undertake small chores that need to be completed at the moment.
4️⃣Diverse Pool of Talent:
Businesses may access a wide pool of flexible workers by utilising gig economy individuals. These individuals frequently operate outside of conventional business hours and typically work on weekends because they do it from home, providing firms with options and flexibility.
Firms can use them for a variety of projects based on their abilities. The diverse backgrounds that gig economy workers have can foster greater creativity and ideas for the organisation.
✅Disadvantages of the Gig Economy:
1️⃣Less Reliable Work:
Without stringent assessment, expectations, or the experience of past work, it is hard to know whether your freelancer will actually be as effective or motivated to work. This is bad for organisations, and they need to be cautious when setting expectations and selecting freelance workers to guarantee they have a dependable workforce.
2️⃣Commitment Issues:
Because gig employees are aware that they will only be working for an organisation for a limited time, they may be seeking their next full-time role before your project is completed.
Some employers have reported that a freelancer left midway through projects due to new interests or possibilities and had to be replaced. The lack of regulations or legal recourse, while easing up red tape, can make it difficult to hold gig employees accountable.
📌 Conclusion:
Workers in the gig economy are critical to the corporate world’s ever-changing landscape. While there are advantages and disadvantages to working as a freelancer, all parties can agree that gig economy jobs are having an impact on enterprises.
Beyond just the choice of work, gig work also opens up the economy for segments of the society that don’t have employment opportunities in the current job market – such as stay-at-home moms, caretakers, students, and part-time workers.
Additionally, hiring gig workers might be less expensive as employers do not have to pay for health insurance or other perks, while they can still access highly specialised talent on a temporary/as-needed basis. This positively impacts the overall economy, making the pie bigger for all.
