The gig economy is often advertised as revolutionary for workers – it’s a major opportunity to supplement their income or even become their own boss. What’s harder to define are the many unexpected benefits of the gig economy for employers.
This article is the second of our 3-part series. If you’re a freelancer who works “gigs”, check out: Working the Gig Economy: Part 1 – Modern Work.
What is the Gig Economy?
Defined by TechTarget as “An environment in which temporary positions are common and organizations contract with independent workers for short-term engagements”, the gig economy turns the traditional employer/employee relationship on its head. In some cases, this replaces a reliable permanent workforce with inconsistent temporary labor, but it also allows businesses to engage with high quality talent from all around the world, employ experienced specialists for specific tasks, and cut down on overheads and wasteful busywork.
The movement toward the modern gig economy has, with some exceptions, been a bottom-up development. After the great recession, the workforce had little faith in traditional job security and less loyalty to their primary employers, instead opting for multiple diverse income streams. For numerous reasons (some of which we will go into below), convincing employers that this is a good idea has been a bigger challenge. In this article, we argue that businesses do stand to benefit a great deal from the gig economy and should be open to engaging with non-traditional workers.
Today, non-traditional workers, including independent contractors, on-demand workers and remote workers, already make up to 30 percent of the workforce. In the UK, more than 74% of independent workers have stated a preference for independent work over traditional job security and according to the Freelancing in America 2016 report, 25% of U.S. workers employed in full-time, permanent positions are also moonlighting as independent contractors. In light of the gig economy’s prevalence in today’s digital marketplace, let’s address (and dispel) some of employers’ biggest concerns:
Keeping Track of Remote Workers
At its most pessimistic interpretation, the modern employee’s desire to work from home is thought of as laziness by some old-fashioned employers. Your staff just wants to sleep in, slack off, and have no oversight. But Dell and IBM, early adopters of remote labor, discovered that when they switched from the office building to a distributed team, productivity actually went up. This was made possible by a number of factors:
- Remote workers have more workplace satisfaction, because their workplace is whatever they want it to be.
- They are more willing to work outside of the traditional 9 to 5, Monday to Friday schedule.
- Office management costs and man-hours go down sharply the more of the workforce is distributed.
- Modern communication platforms designed specifically for distributed teams (such as Slack) allow for a structured workday with open dialogue and scheduled meetings even when teams are spread around the world.
- When looking for the best candidate for the job, businesses are no longer limited to a hiring pool within commuting distance of the office.
Don’t Fear the Side Gig
When we talk about the gig economy, we tend to focus on freelancers, distributed teams and self-employed people. In reality, the vast majority of gigs are actually performed by people who have traditional, full-time salaried positions and just want to earn a little extra cash on the side. These kinds of side-jobs have historically had a bad rap; many employers see side-gigs as a sign of employee disengagement or lack of loyalty and are concerned that their staff are at risk of being recruited by a competitor.
Employers typically want to protect and retain top talent and, in their minds, the gig economy threatens to lure good workers away in favor of entrepreneurial aspirations and more autonomous work schedules. The risk of that is actually quite slim: a survey from Career Builder found that 71% of workers with side-gigs had no intentions of leaving their full-time job. Encouraging your employees to take on side-gigs can have a great number of benefits:
- Workers are creatively engaged by side-gigs, increasing their confidence and career satisfaction.
- New jobs require workers to hone new skills, which will then increase their value to their primary employer.
- Supplementary income increases the quality of life of the employee at no cost to their primary employer.
Businesses have a great deal to gain from the gig economy. Autonomous, self-driven workers tend to be more creative and take more initiative. Distributed teams empower businesses to engage with the world’s top talent. Temporary labor allows businesses to scale rapidly according to their needs. Remote workers with diversified income save businesses huge amounts in overhead costs, and there are many hidden benefits beyond just these. So if you were concerned about how the gig economy is going to affect your business, we hope we’ve put your worries to rest. Just embrace it!
A Payza Business account makes it easy to complete your payouts with just one click. Send money to employees, freelancers, contractors, affiliates and suppliers, and keep track of your payments with Payza’s detailed Transaction History. Just upload your payroll spreadsheet and send money to anywhere, from a few people to a few hundred, instantly!
Join the millions of businesses and individuals around the world that use the Payza payment platform to supplement their income and to manage their business. Do you have experience with the gig economy? Let other readers know by leaving a comment below.