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This week’s discussion was all about the gig economy, which is something that affects a lot of community members directly, either as freelancers themselves or people who work for organizations that use contractors. There’s a lot of names for this type of work—freelancer, gig worker, temp worker, contractor, 1099 employee, the list goes on and on. No matter what you call them, they are becoming more vital in the economy.
How big is the gig economy? It depends on who you ask. There’s a ton of data on this type of work, but because it is so broad and can be defined so many ways, the numbers can vary a lot. You’ve probably heard the stats that freelancers make up 35% of the workforce and that 40% of Americans will be freelancers by 2020, but those numbers often consider anyone who has done any kind of work outside the traditional scope in the last year as a freelancer, meaning someone could have driven one Uber or done one side app development job and qualify without actually being a true full-time freelancer. The most accurate numbers of people actually earning a full-time salary from gig work is closer to 0.5% of the workforce—a much smaller number, but one that is growing incredibly quickly. According to the head of talent at Microsoft, its continent workforce is larger than its traditional workforce—and other companies are following suit. Gig economy guru Steve King points out that most of the companies he talks to are using more gig workers because of the flexibility and agility they offer, which is a huge shift over the focus on money just a few years ago.
But what does this mean for the workforce? Most people agree that full-time employment will continue to be the standard for how most people work—at least for now. Most people in the gig economy actually do it part time, which means that full-time workers could still take on side projects while continuing their normal work. However, organizations are moving towards a hybrid workforce with a combination of traditional and freelance workers. The issue with that is that many organizations don’t even know how many freelancers they have working for them at any given time, which means we need a better way to manage the hybrid workforce as it grows. Organizations will also need to adapt to freelancers moving between them and the competition, which Director of Learning Rich Beaudrie points out, could be a good thing and allow knowledge and innovative to pass and grow between organizations.
As the workforce grows, organizations will need to adjust how they approach employee experience to include all kinds of workers. There’s also a good chance that labor laws and regulations regarding contractors will also be debated and possibly change. ICS Manager Peter Timmerman says that governments will need to adapt to the changing economy and that the companies he works with in IT will decide how to address the gig economy based largely on future legislation. In order for the gig economy to grow, he says, we need forward-deciding politics.
There are also challenges for gig workers that could increase as the economy grows. One, according to Principal Kelly Baughman, is that freelancers could potentially have a lack of purpose by not being tied to a specific organization. There’s also a gap between contractors and the overall culture of the organization. “As a gigster, suddenly you are there with perhaps a somewhat unclear role. Suddenly you are not present. Perhaps the budget run out, or management changed,” said Co-Founder at Freelway Jan Friman who has been freelancing for 15 years. These are questions for both organizations and freelancers to consider and address.
There are a lot of things to think about when it comes to the gig economy, but what we can all agree on is that it will definitely play an increasing role in the future, and to take advantage of it, organizations and employees both need to prepare now.
My new book, The Employee Experience Advantage (Wiley, March 2017) analyzes over 250 global organizations to understand how to create a place where people genuinely want to show up to work. Subscribe to the newsletter here or become a member of the new Facebook Community The Future If… and join the discussion.