A gig economy is a labor market that is normally characterized by freelance work or numerous short-term contracts as opposed to permanent jobs. It is an economy where freelancers earn income outside the traditional, long-term employer to employee relationships. The gig economy is commonly known as the free agent economy involves all talent or work that is paid for a discrete project or task for a specific period of time. It is a very broad economy that encompasses workers from full-time independent contractors to people moonlighting by driving for Lyft and Uber a few hours weekly. The gig economy is definitely reshaping careers for the next generation.

History of the gig economy

The gig economy has made great strides in the past few years and is expected to erode the traditional way of working. People are slowly transitioning away from stable employment and are becoming self-employed in more flexible roles. The gig economy existed even before the industrialization period where most people worked multiple jobs so as to make a decent living. Over the years the gig economy has proliferated and is expected to comprise 34% of the total workforce. Projections show that this figure will rise to 44% by 2020.

Organization perspective

The increased popularity of the gig economy is as a result of the healthy arrangement between workers and organizations engaging them. Actually, 65% of managers confirm to use gig talent globally. This is tactical and strategic reasons that favor these organizations. When employing gig talents, managers confirm that the labor costs are lowered to up to 20%. Likewise, organizations have a hard time finding the right talent and experts to fill the skills that they need.

Freelancers provide the opportunity to leverage talent in the hard-to-hire sectors such as engineering, design, digital marketing and IT. The issue of timing is also another critical area where managers find it faster to hire gig workers. This is in contrast to full-time employees. Gig workers also have a wider range of experiences they present thus increasing talent fusion. Increasing the company network also extends the reach as it helps build brand awareness across a wide geography.

Gig worker perspective

Over 75% of freelancers are gig workers by choice. In most cases, they are highly skilled, committed and educated choosing gig work for reasons such as career opportunities and personal empowerment. Gig work gives free agents the ability to integrate their work around their lives. This flexibility offers workers a personal schedule where they can balance work, travel, family, friends, career and other personal commitments.

The gig economy is expected to continue rising with the increased technology, millennial mindset, and telecommunications infrastructure among many others. Companies need to adapt quickly, keeping costs in check and filling the vital skill gaps.