3 WAYS THE GIG ECONOMY HELPS BUSINESSES

25/07/22; NACS Online

The rise in gig workers is forcing companies to change up their business strategies.

ALEXANDRIA, Va.—Six in 10 c-suite executives expect gig workers to substantially replace full-time employees at their company in the next three years, according to Mercer’s 2022 Global Talent Trends report.

Forbes reports that the gig workforce increased 30% during the pandemic, and it’s now on track to surpass the full-time workforce in size by 2027. The rise in gig workers is forcing changes in business strategies in ways that will help organizations with labor shortages, inflation and prepare for the future of work.

Here are three reasons why businesses are tapping into the gig economy.

Labor

The labor market is still tight, with far more jobs than people looking for them, according to author and career expert Ashley Stahl.

“Low unemployment rates mean that more jobs are available than there are workers to fill those jobs. Employers are scrambling to find workers as is evidenced by [the] hourly wages increase of 6% in March 2022. The pandemic led to an imbalance between [the] supply of workers and employer demand. As the pandemic closed, the Great Resignation kicked into high gear,” Stahl told Forbes.

Over 47 million workers quit their jobs in 2021, and 11.3 million jobs were open at the end of February 2022. Forbes reports that the pandemic and resulting labor crisis has created the “perfect storm” for the gig economy.

“The first step was that people were forced to sit at home for months on end. This allowed them to see what their lives were like without their jobs and reconsider their options,” Mike Swigunski, author and founder of GlobalCareerBook.com, told Forbes. “The second step that followed is that older people, Gen Xers, and even some Boomers began dipping their feet into the gig-economy. This is notable because the majority of gig-workers had consisted of millennials and Gen Zers. The third and final step has been the Great Resignation. People have decided in droves to stick to their gig-work rather than return to their offices.”

Tech in the Workplace

Gig work will generate $455 billion in 2023, up 53% from 2020. Companies such as Upwork, Task Rabbit and Fiverr, a company where people sell their skills on a project basis, are among many platforms where people can find their gigs, and businesses can use gig workers as independent contractors.

“Prior to the pandemic, we began to notice a shift in the labor landscape along with the adoption of new technologies. Increasingly, people were gravitating toward a more flexible way to work, and businesses were shifting to a more flexible way to meet their labor demands,” Dave Dempsey, CEO and co-founder of Hyer, an on-demand labor app, told Forbes. “Then, COVID-19 hit and we watched the gig economy explode overnight. Today, platforms like Hyer aren’t just a stopgap, but a strategy many businesses are putting in place to support both immediate and future labor needs.”

Inflation

U.S. consumer inflation rose to 9.1% last month—the quickest increase since November 1981. With more Americans scrambling to make ends meet, the gig economy has been a flexible solution for them to make supplemental income.

Forbes cited a recent survey of over 1,000 workers who turned to gig work during the last six months. Of those surveyed, 85% have recently increased or planned to increase their gig work—with 58% citing inflation as the primary reason for seeking more work.

Rising costs has forced some businesses to look for ways to mitigate costs and still meet their labor demands. Gig workers allow companies to access a larger pool of talent without the additional costs of recruiting, benefits and training. This strategy has made gig workers an appealing alternative to traditional staffing, says Forbes.

“Freelancers seem to be everywhere now, and you’re not imagining it—about 70 million people in the U.S. freelance,” David Ciccarelli, founder and CEO of Voice.com, told Forbes. “With such a staggering statistic, it’s important for business leaders to start thinking about how to harness the immense talent available to them in the gig economy. Depending on your industry, the majority of the talent you need may already be out there waiting for you.”