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Gig Economy Part I: What’s Happening in the Gig Economy

January 25, 2023

Gig Economy Part I: What’s Happening in the Gig Economy

In part one of our series of articles on the gig economy, we share more about its background, the benefits it offers and the challenges it poses for both workers and businesses.

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The gig economy has been around for many years. It started with freelancers from various industries and further expanded as ridesharing and food-delivery platforms began to rise in popularity. However, with the pandemic significantly disrupting traditional working arrangements in the past two years, many were forced to find alternate income sources and shift to remote working arrangements. Naturally, what followed was (and still is), the rapid growth of the gig economy.

Background on the Gig Economy
According to Cambridge Dictionary, the gig economy is defined as a way of working that is based on people having temporary jobs or doing separate pieces of work, each paid separately, rather than working for an employer. It includes freelancers, independent contractors, and temporary workers.
Globally, the gross volume generated by the gig economy alone is predicted to hit $455 billion by 2023. The number of gig economy workers is also expected to expand three times faster than the US workforce. The top industries for gig workers are as follows:
 

Statistics from Zety (https://zety.com/blog/workers-on-gig-economy)
Gig workers are mostly made up of individuals aged 18 to 34. Given that most of such work either utilises digital platforms or is directly related to the IT sector, this finding is not surprising. With more Gen Zs entering the workforce in the years to come, coupled with greater emphasis on digital upskilling, this number is likely to rise.

Why Are More People Choosing Gig Work?
According to Zety, the top reasons for participating in the gig economy include having the autonomy of being one’s own boss and flexible work hours which allow for better work-life balance. Furthermore, many also view gig work as more secure than traditional employment. This could perhaps be due to the loss of jobs and massive changes in work arrangements during the pandemic, which shifted people’s perspectives on the stability of the traditional job market. Additionally, the move to digital platforms and isolated working arrangements made many realise that they preferred to and could work independently. Not forgetting those who lost their jobs who may have started their own independent businesses. These businesses may have eventually continued to become a main source of income for them even after the pandemic.

Challenges Faced by Gig Workers
While doing freelance and gig work has its many perks, there are also disadvantages. A major downside of gig work is the lack of employee benefits that traditional jobs offer. On top of that, each gig may pay differently depending on the project, client, or season, making income relatively unstable. With more individuals choosing gig work, markets can also get oversaturated with similar competitors, making it challenging to stand out and secure clients. This lack of financial certainty alongside irregular hours can be difficult for people who thrive under structure and routine. Working alone can also be isolating and stagnating, as opposed to having co-workers or supervisors to look to for guidance, bounce off ideas with and share workloads. However, despite these hurdles, most gig workers remain resilient and still want to remain in the gig economy whether be it full-time or as a side job.

Impact on Organisations
The rise of the gig economy has been one of the main reasons for the talent crunch faced by organisations. While companies would naturally look to foreign talent to fill in the talent gaps, this is becoming increasingly difficult, especially in Singapore. Restrictions on foreign talent have become more stringent over the years. Some organisations have tried to counter this phenomenon by offering more flexible work arrangements and increasing employee benefits. However, others have chosen to embrace this change and adopt a new talent model that taps into the resources offered by the gig economy. This means creating roles in organisations for gig workers to offer their expertise. Such businesses understand that their manpower can consist of a spectrum of talent – embracing the need for both full-time employees and freelance workers. This is best explained by this infographic by Deloitte:
 

Source: https://www2.deloitte.com/us/en/insights/focus/technology-and-the-future-of-work/redefining-work-workforces-workplaces.html

What Does This Mean for Gig Workers?
If you are a gig worker, the good news is that more organisations are open to embracing your services and expertise. While this means it is a good time to grow your business, the next step is to think about your long-term plan. What steps can you put in place to create a sustainable long-term business and build your clientele? What important considerations should you have when thinking about the future of your gig work? These are questions we will answer in our next article. Follow our page and look forward to our next post!

If you are interested in learning more about the services provided by CTES Consulting, you may visit our website at https://ctes.com.sg/web/site/home.

 
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