We live in an era where people prefer VOD services like Netflix over traditional TV and cable operators.
Do you know why?
Because VOD provides convenience. People can choose the shows according to their needs and watch them whenever they want. Contrary to traditional TV and cable operators which bind users with program schedule and useless channels that users will never tune in.
Similarly, a paradigm shift is seen in the work and business environment which is challenging the traditional approach of the work industry.
This paradigm is gig economy.
But what exactly is gig economy?
“The gig economy is empowerment. This new business paradigm empowers individuals to better shape their own destiny and leverage their existing assets to their benefit.”
Gig economy is commonly defined as an environment where temporary jobs are common and companies hire freelancers and independent contractors for short-term instead of full-time employees.
The term ‘gig economy’ is coined from the word gig.
In the 80s the word gig was associated with temporary jobs with no real commitment So, in gig economy, the workers receive their payment for the gig (work) done instead of a full-time permanent job. The best example of gig economy is Uber. It provides an opportunity to the people to work flexibly whenever they want.
According to Intuit, 34 percentage (53 million) of the US workforce comes under gig economy and will increase to 43 percentage by 2020.
Out of the current gig economy workforce:
40% — 21.1 million are independent contractors
27% — 14.3 million are moonlighters
18% –- 9.3 million are diversified workers
10% — 5.5 million are temporary workers
5% – 2.8 million are freelance business owners
The above data clearly shows that millions of the people are part of the freelancing revolution and it is changing the industrial norms.
The Rise of freelancing platform
‘A rising tide lifts all boats’
With the booming gig economy, freelancing platforms are proliferating at a high rate.
In last few years, hundreds of freelancing websites have been launched. Upwork, Freelancer, Craigslist, SimplyHired, TaskRabbit, StyleBee, Postmates, etc. are are among the well-known freelancing platforms. There is a high demand of these websites and it is constantly increasing.
Apart from the reason that these platforms work as a bridge between individuals and companies, there are some changes in the industry norms that are boosting its growth. The main reasons are as follows.
1. Corporate behemoths entering the gig economy
“Samsung is now expanding its use of freelancing platforms. I really believe this is the future,” Cathleen Nilson, head of On Demand Talent at Samsung said in an interview with Fortune.
Previously small business and start-ups used freelancing platforms to hire their employees. But now the trend has changed. Even the multinational corporate giants are interested in hiring freelancers and are using online freelancing platforms to hire IT specialists, designers, marketing staff and other workers.
Companies hire contract workers and freelancers because they are more cost-efficient than the full-time employees. Contract workers cost employers minimum 25 percent less and are flexible to hire only when the demand arises. Also, companies are not bounded to give them the employee benefits that are generally mandatory for a full-time employee.
2. Even baby boomers are gigging
Not only millennials but even baby boomers are part of the gig economy.
According to economists at Harvard and Princeton, about half of Uber and Lyft drivers are over 50. Airbnb identifies woman age 60-plus as their most successful hosts and the fastest-growing community of providers. DogVacay reports that people over 50 constitute 25 percent of their pet sitters.
This shows even baby boomers are active in the gig economy.
Independent work taking over full-time job
People are giving up their full-time work to pursue their passions and challenging the traditional work system. There is an increasing number of people who do not want to be employed full-time.
Countries like United States, United Kingdom, India, Australia, Canada, Germany and Singapore are among the highest gig economy country.
A study in UK shows steady growth in the number of part-time workers, of which a vast majority (70.7 percent) has stated that they do not want a full-time job.
According to a report by the Department of Business, Energy & Industrial Strategy, there is an increasing variety of other types of work (agency work, temporary work and zero hours contracts) that has changed the traditional patterns.
These atypical work models can be mainly linked to an increasingly flexible labour market and a high-rise in the self-employment rate (15 percent of total employment in 2016).
With more and more individuals looking for flexible and temporary jobs, and corporates looking to hire on-demand workforce, there is a high demand for freelancing platform that works as a marketplace.
The gig economy is revolutionizing the traditional work system. Charged with the convenience and flexibility for individuals and cost-effectiveness for the web development companies, it is growing constantly. This change in traditional work system is also rising the demand of freelancing platforms. Looking the current trend, unequivocally the gig economy is the future of work and the freelancing platforms will play a vital role in it.