What is a gig economy and what effect is it having on U.S. businesses? Growing numbers of Americans no longer hold a regular “job” with a long-term connection to a particular business. Instead, they work “gigs” where they are employed on a particular task or for a defined time, often with practically no connection with their employer.
The term ‘gig’ seems to have been borrowed from the music industry and it has been applied to all sorts of flexible employment sometimes referred to as “contingent labor,” “temp labor,” “part-time employment” or “contractor.”
A study by the JPMorgan Chase Institute reveals that the number of current gig workers has grown 10 times since 2012 and that 4% of adults in the U.S. have at one time worked in such a capacity. And a recent study by Intuit predicted that by 2020, 40 percent of American workers would be independent contractors.
According to Mike Wachholz, president of Pontoon Solutions, one of the largest HR firms in the country, the United States is seeing the results of an unprecedented rapid change in the speed, transparency and complexity of the job market, with both job hunters and employers seeking ultimate flexibility in their relationship with each other.
In this sort of malleable situation, companies can access the type of talent they need as the demand calls for it in a variety of markets in various different regions. Gone are the days where workers had to be physically on site in order to get the job done. Part time workers, freelancers, contractors both inside and out of the country can replace full time employees and this opens up the landscape for greater talents.
This variety in workers’ structures forms a type of human cloud and allows the gig economy to leverage people in a way that wasn't possible a decade ago. The 9 to 5 full time workers of the past whose physical presence on-the-job was mandatory are no longer. The choice of worker type engagements has increased opportunities for those looking for work as well as those searching for good employers. In the human cloud there are no longer the accepted restrictions on hours put in at the job or the location of the worker.
Wachholz sees the main obstacle to the success of a gig economy as the lack of regulation as well as a disorganized worker classification. He posits that the regulatory environment in North America hasn’t caught up with current demands and expectations. He also believes that workers have to change the way they are looking at their futures both in terms of what their career path looks like and the expectations they are seeking from the organizations they are looking to work for. This creates a gap between the expectations of workers and employers which can only be closed with flexibility on both sides.
Companies such as Uber and Airbnb that are made up of part-time workers and freelancers stand as examples of how the use of correct engagement models can lead to success in our gig economy.
