Gigs are temporary and short term jobs that are usually contractual. Many of these are performed remotely. The term “gig economy” was first coined by journalist Tina Brown in 2009. During COVID-19 the term took on a whole new meaning. The era of conventional jobs seems to be at an end, with gigs fast becoming the new normal. Here is a look at how and why this is happening.
Driven by unemployment
Gigs have long been integral parts of the economy. During the COVID-19 recession millions of full-time jobs were lost. The newly unemployed and furloughed were forced to turn to gig work to make ends meet. The newest trend is simply a re-run of the aftermath of the 1991 economic downturn, and the years following the 2008 economic crisis.
A March report by the ILO estimates that the COVID-19 crisis will cause a staggering 20.5 million jobs to be lost in the next one year. Even those who manage to stay employed will see reductions in pay and working hours. Millions more will become ‘under’ employed. The surging unemployment levels will force more Americans to seek alternative sources of income. So far the preferred alternatives have been in the form of short term, temporary, or contractual work, aka gigs. These will become much more common in the months to come.
Gigs and changing attitudes
The way in which corporate America views gig work has fundamentally changed. COVID-19 compelled many businesses to either close physical offices or impose strict workplace measures. Social distancing reduced office space availability, productivity, and efficiency. Multitudes of businesses had no choice but to let employees work from home. With no sign of a vaccine in sight, the changes that were imposed as temporary fixes eventually became the new status quo. Businesses that were formerly resistant to remote work had to re-engineer their entire operations to facilitate it. Advanced Systems Group, a Denver-based solutions provider, is now communicating to its clients to expect a new normal that will consist of having most employees work from home.
Businesses also realized that there can be savings in letting employees work remotely. Moreover there was evidence that working from home did not make employees less productive. In 2013, the National Bureau of Economic Research reported that working from home increased performance and output by 13%. This digital transformation saw businesses trying to find new and more efficient ways of hiring employees specifically to work remotely. It seems that now corporate America is getting a soft spot for gig workers. According to Deloitte’s ‘Future of Work Accelerated’ report 60% of the organizations estimate increased reliance on gig workers in a bid to reduce the dependence on a full-time workforce. Driven by public opinion, the legal and regulatory support mechanisms may be quick to catch-up as well. University of Pennsylvania professor Lindsey Cameron says, “Consumers may be more likely to push for greater action.” It is highly likely that legal personnel and business executives are going to be more active in advocating for the welfare of gig workers.
Growth of the digital economy
The COVID-19 crisis accelerated a number of economic trends which were already taking shape. One of these was the reliance on digital technology. We’ve learned that social distancing is a very effective way of controlling the spread of the virus. Consequently most aspects of our lives have become contactless. We’ve seen university classes, weddings, and graduation ceremonies hosted digitally with success. For workers in the gig economy digitization brings good news. With the world leaning toward an app-based lifestyle we can only expect a higher reliance on app-based employment. A May 2020 report by bdo.com explains that remote work is likely to increase due to more efficient digital tools. Notable among the tools that facilitate online collaboration are money transfer applications that allow employers to send money online to pay their remote workers. Gig platforms such as Lyft, Lending Club, and Freelancer can efficiently connect service providers to consumers. Although remote work doesn’t necessarily entail temporary work, it does open more doors for qualified gig workers who are culturally inclined toward flexibility.
Low risk staffing options
Gig work allows businesses to scale-up operations quickly. This is because such models provide low-risk and lower cost staffing options. Companies such as Food Panda and Uber Eats are examples of organizations that grew rapidly in this fashion. On the other hand gig workers can often give better productivity than full-time workers. This is because the gig model allows them to choose their own working hours, helping them optimize their work-life balance. Coupled with growing digitalization the trend toward gig work is set to grow.
About the author:– Hemant G is a contributing writer at Sparkwebs LLC, a Digital and Content Marketing Agency. When he’s not writing, he loves to travel, scuba dive, and watch documentaries.