Is the gig economy the future?
Is it time that businesses re-think how to survive these turbulent times?
After the COVID-19 pandemic, the gig economy saw a lot of growth and enabled many to keep making ends meet during a difficult time. Could tapping into the gig economy once more be the key to helping businesses survive in this recession?
Keep reading to learn more about what the gig economy is, how it has grown in recent years, and if the gig economy is the solution to VUCA times.
What is the gig economy?
The gig economy is a labour market in which the majority of work is completed by short-term, independently contracted workers. Instead of being paid a regular salary or hourly wage, the workers are paid for the amount of work that they complete.
Freelancing, which has become even more common after the pandemic, is part of the gig economy. Freelancers earn their money from completing individual tasks, sometimes known as gigs, and are not fully contracted employees with the company.
Growth in Recent Years
With the 2020 pandemic, the gig economy saw a massive surge. Many people were left unable to go to work and needed to find ways to earn money from home. Improvements in technology also enabled more companies to hire work from home employees without facing decreases in productivity.
One study conducted in the UK found that 18% of HR directors think gig workers will make up 75% or more of their workforce in the next five years. This is a huge percentage and demonstrates the importance that the gig economy will play in the next several years.
Examples of roles within the gig economy
For the most part, roles within the gig economy are the same as roles that exist outside of it. Computer programmers, designers, marketing agents, and writers can all work within the gig economy as independent workers or as contracted full-time employees.
However, some roles have been created almost exclusively because of the gig economy. Two of these roles are online business managers, OBM, and virtual assistants.
What is an Online Business Manager?
An online business manager is an employee who is in charge of running a company on a daily basis. They often stand in for the CEO when they are unavailable and manage all of the other employees to ensure that goals are met and tasks are completed on time. OBMs are often also responsible for scheduling the entire team and being a point of communication for the other employees.
What is a Virtual Assitant?
Virtual assistants are one of the most common gig economy employees and are a role that pretty much came into existence because of the gig economy.
VAs are employees whose entire job is to manage the small, administrative tasks within a company. These tasks can include answering emails, doing customer service, scheduling meetings, and tracking hours.
They are simple jobs that often do not take up an entire 40-hour work week. This means that hiring a full-time employee to perform these tasks would be impractical. By hiring a VA, you can just pay them for the tasks that they complete weekly. This helps to save the company money and avoid making regular employees complete tasks outside of their specialty.
Advantages of working in the gig economy
There are many advantages to working in a gig economy, most of which revolve around the idea that not being contracted with a company allows you additional freedoms.
Some of the advantages of working in a gig economy are:
● Flexible working hours
● Choosing your work
● Better work-life balance
● A secondary income
● Traveling and working remotely
When you work for a regular corporation as a contracted, full-time employee, you don’t get to make a lot of your own decisions. The work that you do as well as the hours that you work are decided by your manager. A manager that does is not familiar with your life circumstances and isn’t interested in helping you work around scheduling issues such as childcare.
By choosing to work as a freelance or independently contracted employee, you are taking a lot of that power back. As a gig economy worker, you can pick what projects you are going to work on as well as when you will work on them.
This makes freelancing a great option if you are a student or have other unique scheduling concerns. Since you are not on a long-term contract, you don’t have to work a regular nine-to-five schedule. As long as you are completing the tasks in the specified time frame, you will get paid.
Disadvantages
Although there are many advantages to working in a gig economy, there are also a few disadvantages that you should consider before deciding to quit your nine-to-five.
Lack of Stability
The first issue that comes with working in a gig economy is a lack of stability, both for the workers and the companies.
As a worker, one of the benefits of a full-time position is that you don’t have to worry about where your paycheck is going to come from or if there is going to be enough work. Since you are on a long-term contract with the company, they are obligated to pay you even if there isn’t a lot of work during a specific week.
Even if the company decides to let you go, they will have to give you some notice and may be required to provide a severance package. That way, you are not suddenly left without work or an income.
Companies also struggle with a lack of stability as they are not working with the same workers all the time. This means that they will constantly be training new employees and won’t have the same reliability that comes with a full-time employee.
Is the gig economy better suited to VUCA times?
With the gig economy growing as quickly as it is, many are left wondering if it will be sustainable and if the gig economy is better suited to VUCA times than a regular work system.
What Are VUCA Times?
VUCA is an acronym used in the business world to describe a certain type of business environment. It stands for Volatile, Uncertain, Complex, and Ambiguous.
Volatility means that the environment is constantly changing. Uncertainty means that it is difficult to predict what will happen next. Complexity means that the problems are difficult to solve and need a high level of expertise. Ambiguity means that there are multiple ways to look at the problem and solution.
How Does the Gig Economy Work With VUCA Times?
Volatility
In a constantly changing world, a gig economy is useful because it allows the company to adapt to changes quickly. You can hire freelancers in the areas needed, searching for the level of experience required for a specific task/project or by software you want to adopt.
Uncertainty
In an uncertain environment, the gig economy is helpful because you pay by project or monthly hours as opposed to the typical 37 hour week. This means that if one week you have a lot of work but the next week you have next to none, you won’t have to worry about coming up with the money to pay employees that aren’t working.
Complexity
With problems being more difficult to solve than ever, it is important to hire specialists that can thoroughly understand the situations you’re encountering. The gig economy allows you to hire specialists on a project-by-project basis.
Ambiguity
Since a one size fits all approach no longer stands, being able to constantly change your strategy is crucial. With the gig economy, you can pay for the services you need by project which allows for more flexibility and agility.
Conclusion
The gig economy can respond well to our current VUCA times and provide businesses with an alternative to the challenges the next few months may bring. It allows smaller businesses to make use of talented employees who are specialists in their field, even if they are not able to pay another full-time salary.
However, this does not replace the value that committed, long-term employees can provide to the company. If the company can afford it, long-term employees are still the best option when it comes to sustainability and building a reliable team for your company, but whilst we journey these uncertain times, the gig economy should be strongly considered in supporting growing businesses.
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