The freelance or “gig” work model — where people work on a short task, project or on contract basis — is growing in favour of the traditional employment models: It is predicted that by 2020, more than 40% of the workforce will comprise gig economy workers. In this article, I will touch upon the trends contributing to the rise of the gig economy and the opportunities offered to employers and freelancers.
The demand for services from the gig economy arises mainly because more people can afford it: A growing middle class and increasing urbanisation, as well as a higher disposable income of millennial and retirees result in higher spending power for these services.
A number of trends also contributed to the growth of the gig economy:
1. Growth of digital platform allows freelancers and home-based businesses to tap into global markets with the Internet, swiftly connecting employers with assignments, market skills, manage clients and accept payments.
2. Increased demand from workers for flexible and autonomous work, particularly coming from youth. This signals a generational shift towards greater freedom and entrepreneurship.
3. The need of businesses to scale up and down on a project basis or for specific non-core tasks. This flexibility facilitates the rapid assembly of the right talent at a moment’s notice to complete a project.
4. The economy arises as a direct result of macroeconomic forces such as globalisation, outsourcing and technology. Such forces have given rise to a fast-paced business environment. The gig economy allows providers to supply trusted services to consumers in need for their mutual benefit.
5. Ongoing demand for various services or assistance throughout one’s lives: During childhood (tuition teacher, childcare providers, nannies), courtship and marriage (wedding planner, matchmaking service, bridal wear, photographer, make-up artist), adulthood (home buying, renovating, moving, insurance, health and fitness, financing and advisory), parenthood (maternity experts, pre-birth, nannies); and retirement (healthcare advice, helpers, migration agent, succession planning, funeral parlours). As it is highly unlikely for any average individual to expect dedicated staff on standby to serve their needs, the demand for all types of services will persist.
The trends above spell opportunities for both gig employers and freelancers. These are just two of the most obvious:
1. Work opportunities will be available for individuals disenchanted with the rigidity of full-time work as well as those unable to secure long-term employment. McKinsey’s supply-side analysis indicated that by 2025, online talent platforms could raise global GDP by up to $2.7 trillion and increase employment by 72 million full-time positions.
2. The global component of freelancing means that companies can access the best untapped talent from around the world, opening doors to a broader pool of talented, hardworking professionals at competitive rates. This augmented talent pool provides companies with hyper-specialised, exceptional talent that was previously inaccessible.
3. Smaller businesses which experience fluctuating periods of activity can benefit from the gig economy to get individuals willing to do temporary contract work, as these businesses often hold off hiring full-time employees.
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