What Exactly is the Gig Economy and What Does it Have to do with You?

I get asked this constantly. Right after “so what exactly do you do again?” 

The Actual Definition

The Gig Economy is also known as the “Alternative Workforce” or “Talent Economy.”

Per Staffing Industry Analysts, they define it as including any work of a fixed duration done by temporary or contingent workers — sourced directly or through a staffing agency — and independent contractors. 

In short, it’s anyone that is not a permanent employee. 

What Does that Have to Do with You?

Everything.

The Gig Economy is now estimated at 4.5 trillion. 

If you are over 50, you represent the fastest growing sector of the gig economy; you are valued because of your expertise, experience and you like the flexibility. 

If you are a millennial (under 38), 48% of you are earning full or part time income in the gig economy

If you have a niche or highly sought-after skill set, particularly in STEM, you most likely are working as an Independent Consultant because of demand and the hefty bill rates the market will pay.

If you are a CIO, CHRO or CPO, you are tasked with figuring out how to source, manage and integrate this workforce and its technology delivery system into your organization then manage risk and complexity across a hybrid workforce.  Why is this a challenge?

The Traditional Employment Structure Doesn’t Apply

The rules and structures that exists for permanent talent; sourcing channels, measuring performance, pay structure, analysis and data, doesn’t exist for your alternative workforce. For some companies, this represents 25% or more of your total workforce, for companies like Google, gig workers outnumber permanent employees.

Here’s the challenge. You can’t apply the same processes, structures and rules to this workforce you do for your permanent talent. Because those rules are over 200 years old, and they don’t fit. 

Enterprise organizations are looking at talent holistically, and eliminating the dividing lines between permanent, contractor, freelancer, and consultant.

The Gig Economy = True Meritocracy (or something close to it)

The gig economy is not something forced onto workers who have no choice or don’t have the skill set for something better. Today workers from across the globe, across every economic class, can log onto a technology platform and get work.

The higher skilled and more in demand your skill set, the more options you have. It’s not about where you went to school, who you know, what race or gender you are, or where you live.

 It’s about the skill set you possess and the market demand. That’s it. Pedigree, alumni relationships and socioeconomic status are not as much a factor.

How do We or Should we Regulate this Workforce?

Politicians and Regulatory bodies are saying the lower end of this spectrum, Uber drivers and door dash delivery drivers are barely able to make a living and creating another lower class struggling to make ends meet. They have lobbied on classifying these workers as employees so they can have the “protections and benefits” they deserve.

The recent backlash on California's AB5 bill throws this out the window; the people have spoken; they don’t need or want these protections, especially if implementing them eventually eliminates the companies providing these income streams.  

It goes back to skill set and fair exchange for the skill. Many also use these gigs to supplement other income, or retirees who don’t want the “grind” anymore and want to earn a little extra money.

They are not disenfranchised; they are participating at a level they want to participate.  These workers can buy their own benefits (and increase their bill rate to cover it) or they have benefits from another source.

They want the flexibility and freedom to make a choice how, when and where they work.

Change is Here

The gig economy has radically changed the way we work. This workforce is growing, and it is forcing enterprise organizations to think differently about how work gets done. It’s not an anomaly, or passing trend, or something to be “fixed”.

It’s how almost half our population is choosing to work; so let’s move forward with that. What does THAT look like over the next 50 years? Thoughts welcomed. 

Terri is a seasoned talent solutions executive, workforce strategy architect and the founder of Gallagher and Consultants; a consultancy firm that provides innovative strategies for clients to optimize their non-traditional labor and the originator of the WORKFORCE SOLUTIONS ECOSYSTEM MODEL tm