What is the gig economy?
Dictionary.com defines the gig economy as “an economic sector consisting of part-time, temporary, and freelance jobs.”
It’s a slang term adopted from the performing arts community where musicians, stand-up comedians, and other performers are paid by the “gig” instead of being hired for a full-time position. In other industries, the term blankets independent contractors, freelancers, temporary employees, and part-time workers who are hired by organizations for short-term engagements.
Technology Connects the Gig Economy
The gig economy uses digital platforms (like apps and websites) to connect freelancers with customers for short-term services or asset sharing. For example, ride-hailing apps, food delivery apps, accommodation rental apps, and grocery shopping or delivery apps. There has always been a market for short-term work, but the arrival of companies like Uber, Care Upwork, and DoorDash have rapidly expanded the marketplace.
The Freelance Forward 2020 survey by Upwork reports that freelancers comprise 36% of the total workforce and earn $1.2 trillion dollars from their work. That’s a hefty chunk of gigging workers, and that number is expected to grow. In fact, many workers are making a career out of temporary work. So what’s the appeal? Why are so many workers choosing multiple short-term assignments over full-time work? Let’s examine the pros and cons of gig work.
Benefits of the Gig Economy
Gig work is an excellent way to gain experience or build your resume. If full-time positions are difficult to obtain in your chosen field without several years of experience, you might choose to freelance to get some experience under your belt. This is particularly true in creative professions, where gig work is an excellent way to pay the bills and meet practical obligations while writing a novel, honing graphic design skills, or making art.
As a freelancer in the gig economy, workers are free to choose when and where they work. This flexibility allows them to schedule working hours around life events, appointments, or available childcare. Workers can take advantage of when they are more productive and choose to work during those hours. They can also choose where they enjoy working, and change locations as desired, provided they meet their contracted deadlines. Gig work allows many independent contractors to pursue personal projects or passions while earning a living wage.
Gig workers enjoy more freedom in their work lives. They sometimes control their schedule, which projects they choose, and even how much money they make. Gig workers can cherry-pick assignments based on the compensation offered or choose to work more when they need to earn more. They can schedule time off for vacations, holidays, or personal reasons without consulting anyone but themselves.
There is no threat of monotony in the gig economy unless the gig worker chooses to do the same tasks. Freelancers are in complete control of the contracts or clients they accept, so if they want to drive for Uber in the morning and write copy for a website client in the afternoon, it’s possible. If task variety is the spice of work life, then the gig economy offers endless ways to diversify work tasks.
Challenges of the Gig Economy
There are many benefits to working in the gig economy, but temporary and freelance workers must be prepared to face the drawbacks as well. Often gig workers work as long—or longer—than those with full-time employment, but they don’t receive the same benefits. Here are some of the potential challenges of freelance work:
Benefits and job perks are rarely part of the compensation package in short-term contracts. Gig workers often don’t receive any coverage or help with:
- Health insurance
- Paid sick leave
- Workers’ compensation
- 401k(matching) or other employer-sponsored retirement plans
While freelancers and part-time employees rarely receive benefits, temporary and contract employees who work through reputable staffing firms enjoy access to comprehensive benefits. For example, the PrideStaff Field Associate Benefit Plan includes medical, life insurance, disability, and retirement plan coverage options.
For true independent contractors who receive a 1099, federal taxes are not withheld from gig compensation. That means freelancers need to set aside enough money to remain in compliance with federal tax regulations. In addition, workers must file quarterly estimated tax payments and pay self-employment tax on their income. PrideStaff field associates, however, are considered W-2 employees of the staffing agency, so they have appropriate taxes withheld.
Often gig workers put in more than 40 hours a week to keep their schedules full and maintain profit margins. It’s a constant hustle to make sure the next contract is lined up and has a big enough pay-off to cover bills and expenses. There’s no guarantee that money will be coming in next week, next month, or next year. (In the pro column for income, working for multiple employers or through a staffing agency can also provide a more steady income.)
Lack of job security
Without the assurance of a full-time position, gig workers risk being out of work. They must always be on the lookout for the next job. Often last-minute changes occur during current contracts, and sometimes contracts get canceled with no warning or compensation. There’s no safety net in gig work, and the constant instability can take a toll. The continual dependence on finding enough well-paying jobs to make a living is exciting to some and exhausting to others. When you’re a gig worker, your income is never completely secure.
The gig economy is growing, and new workers enter the market every day. Freelancers must continue to learn new skills and expand their knowledge of their industry to keep their market share. This constant competition can be a source of inspiration or intimidation, depending on your mindset.
Career Development in the Gig Economy
So how can you become successful in the gig economy? Is it possible to make a career out of temporary work? Absolutely! Here are a few tips for those seeking to build a career out of gig work:
- Think like a boss. Embrace the fact that you are in charge of your career. You’re running your own small business. Adopting the mindset of a successful professional can provide confidence.
- Hustle. Work isn’t going to come to you until you put yourself out there. You’re selling yourself: your skills, abilities, knowledge, or creativity. To build a successful gig career, you must continuously motivate yourself to find the next contract. Take the initiative, get out there, and hustle.
- Work with a staffing firm. A staffing recruiter can act as a career partner, helping you to develop a career plan, choose assignments, build skills, craft a resume, and gain experience.
- Manage your time. It can be challenging to juggle gigs once you have several on your schedule. Find a time management process that works for you, and stick to it. It takes discipline to complete work when no one is holding you accountable. But accountability is an inside job for freelancers. Getting it on the schedule and getting it done on time is the only way to stay in business.
- Make a financial plan. When income is inconsistent, having a budget is crucial. Know how much you need to make each money to cover expenses and pay your taxes. It’s difficult to avoid splurging on non-essentials during a particularly good month, but keep in mind that the next month might be lean.
- Upskill. More freelancers are entering the gig market every day. Stay at the top of your game by seeking opportunities to build your skill sets and expand into new markets. Think of it as continuing education. If you worked for an employer, you might be offered opportunities to attend conferences, online classes, or workshops. As a freelancer, you must source those valuable career-building experiences for yourself.
Job Seeker Tips for the Gig Economy
The gig economy offers the opportunity to work for multiple employers at the same time, which helps grow skill sets and provides exposure to many opportunities. Take advantage of the gig economy and further your career using these tips:
Develop your network. When you’re doing gig work, contracts can lead to repeat work. Be sure to let your contacts know you’re accepting gig jobs. Update your social networks, and consider asking for testimonials from satisfied customers. Post these good reviews on your networks, and watch new business roll in.
Foster resilience. Working as a freelancer can be a roller coaster. Some weeks the contracts roll in, and others the money rolls out with no gigs in sight. Keep hustling, remain consistent in your business practices, and make time to eat, sleep, and rest. With no one setting your schedule for you, it’s easy to work all the time. Prioritize self-care to stay on the rollercoaster ride. Think of it as buckling your seatbelt.
Partner with a staffing agency. For many gig workers, the increased freedom, flexibility, and confidence far outweigh the personal and financial stressors of working in the gig economy. Another way to lessen the uncertainty of gig work is by partnering with a staffing agency. In addition to flexible work and the freedom to choose assignments, many staffing agencies offer benefits, more consistent income, and a wide variety of roles in numerous industries.
Thrive in the Gig Economy with PrideStaff
Our nationwide staffing firm offers comprehensive benefits to placed Field Associates, providing a continuous sense of security, even if you change jobs within our network.*
Enjoy flexible work and gain experience in short-term and long-term assignments across a wide range of industries, including manufacturing, engineering, clerical and financial.
Enjoy all the pros of working in the gig economy by partnering with PrideStaff today!
*Benefits may vary by location.