What is your relationship with the gig economy?
I’ve always looked up to my older cousin. She is wicked smart, creative with every medium, and one of those people with a magnifying personality that everybody likes. She attended one of the top universities in the country where she studied media and film. I assumed she would work at an elite film company soon after she graduated. To my surprise, she didn’t work at a film company, or get a “job” anywhere, for that matter. She created what I call a “collage career”—providing services for a number of organizations without holding a single position anywhere. Her paychecks came from local artists, a nearby university, and a production company. She didn’t search high and low for an entry-level position, she was an active participant in the gig economy.
Temporary, flexible, and widely popular
According to Investopedia, in a gig economy, “temporary, flexible jobs are commonplace and companies tend toward hiring independent contractors and freelancers instead of full-time employees.” According to the McKinsey Global Institute, over 162 million people across Europe and the United States engage in some kind of independent work—that’s 20-30 percent of the workforce, a number that is expected to continue rising. Why is this happening? For starters, people are becoming less committed to their employers—only 33 percent of workers under the age of 35 say they are in a “committed partnership” with their employers, as reported by PWC. Instead of working for one organization, an individual like my cousin may choose to maintain a part-time relationship with many.
In a gig economy, “temporary, flexible jobs are commonplace and companies tend toward hiring independent contractors and freelancers instead of full-time employees.”
Employers are also trending toward non-monogamous relationships. Of the executives surveyed for Deloitte’s 2016 Global Human Capital Trends report, 51 percent said that they plan to “significantly increase” the use of contingent workers in the next three to five years. Instead of a newspaper keeping four journalists on staff, they’ll rely on ten or fifteen freelancers to provide the same volume of work. Instead of a hospital hiring full-time nurses, they'll bring on "travelers" who are willing to work longer shifts.
The Bureau of Labor Statistics reports that the rising popularity of the gig economy is partially a product of job visibility on websites like Indeed and Glassdoor. Now, more than ever, individuals can see the endless career options up for the taking. But everyone has a different reason for seeking independent work. Some “go gig” by choice, others by necessity. These distinctions create four different kinds of independent workers. The McKinsey Global Institute breaks them down like this:
Free agents are workers who prefer independent work, and use their gigs as their primary source of income.
Casual earners see independent work as a “side job” and use it to supplement the income earned from their full-time employer.
Reluctants rely on independent work for the primary income, but would prefer full-time employment from a single employer.
The financially strapped take on independent work out of necessity, as means of bringing in additional income.
Go gig, learn something new
As a soon-to-be college graduate, I can tell you one thing for certain: entry-level jobs are hard to come by. As I look on job boards, I can’t help but notice that the majority of them require a couple years of experience, at a minimum. For those who did not load up on internships during college, taking on gigs can is a great way to get exposure and build a portfolio.
For those who did not load up on internships during college, taking on gigs can is a great way to get exposure and build a portfolio.
“Having a side gig is a great way to learn new skills that may eventually turn into a new career,” says writer and non-monogamous employee Sid Lipsey. And he’s right. Only 33 percent of employees say that they have found opportunities to learn and grow at their full-time job within the last year. Taking on a variety of projects across different disciplines can provide opportunities to increase the breadth of your experience and learn something new. Your resume will thank you.
The gig economy affects us all
As the gig economy gains momentum, it’s important to understand how this new kind of employment is affecting us—at the employee, employer, and economic levels.
Many employees turn to independent work because of the flexibility it allows. No longer do we need to answer to “the man” and work nine-to-five in offices far from home. As an employee in the gig economy, you can work anytime, anywhere, and essentially create a career that fits your lifestyle.
However, attending a 2:00pm spin class between projects brings a handful of consequences. Because independent work does not place you on a payroll at a single company, paychecks can be less stable. Some months may bring in deposits from five companies, while others may bring in only one or two. Benefits are another important consideration—many 1099 employees do not receive healthcare, vacation, or retirement that full-time employees do. While initial paychecks may look flashy, self-employed individuals are also known to pay higher tax rates, as they don’t have an employer to pay a portion of their social security and medicare taxes. On the professional development side, some independent workers share that they have less access to feedback on their work than they would like. If learning something new is your goal, try to find an organization that invests in ongoing training and feedback, regardless of your employment status.
“Reluctants,” those who are self-employed with hopes of gaining full-time employment, may be placed at a disadvantage by the gig economy. As companies trend toward hiring handfuls of freelancers over team members, full-time positions will become more scarce.
Why do employers prefer contingent workers? Strictly speaking, 1099 employees are cheaper. Companies don’t need to pay high taxes, provide benefits, or match 401k’s for independent contractors. The self-employed present a low-cost, efficient way of completing tasks during times of high demand or on a project-by-project basis. On the other hand, freelancers naturally have a higher turnover rate than full-time employees, so employers need a constant flow of options. Recruiting and screening at this volume can create friction. Take Uber in Austin, Texas: The city required that the company fingerprint each driver to ensure a safer ride-sharing environment. Uber, pushed back, refusing to complete the high-cost and resource-intensive process for its many drivers. In mid-2016, Uber left Austin.
While the gig economy does bring with it some drawbacks, it has brought us cheap and efficient services. If you’ve ever used Airbnb or Uber (perhaps not in Austin), you can thank the gig economy. What’s more, with the high number of contract jobs available today, there are more opportunities for the unemployed, contributing to a rising level of labor-force participation. I think it’s fair to say that our relationship with the gig economy is… complicated.
With the high number of contract jobs available today, there are more opportunities for the unemployed, contributing to a rising level of labor-force participation.
What relationship are you looking for?
Remember my cousin? Today, she is working as an editor at a small film company in the Bay Area. She no longer works the gig economy, but her time freelancing helped her gain the skills she needed to get hired full-time. It’s important to decide why you want to enter the gig economy and if the flexible, but unstable, lifestyle fits your needs. The gig economy is not for everyone or every life stage. Some parts of a career may be better fit for the gig economy than others; and an individual’s relationship with the gig economy may change over time, too. You might find yourself in a short-term relationship at the beginning to help you launch your career, a one-night stand in the middle to provide supplemental income to help pay for a new car, or a long-term relationship at the end when your family requires greater flexibility. Like any relationship, knowing yourself will help you assess which is best for you.
Sara Lighthall is a content marketing intern at Zendesk and a student of life. When she’s not demystifying the Millennial generation on Relate, you can find her with her toes in the sand and a latte in her hand. See what she’s up to on Twitter: @saralighthall.