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The Gig Economy Is Thriving and Here to Stay

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Gig economy isn’t a brand-new term in the working world vernacular, but its rise to prominence over the past decade is undeniable. To what extent gig work has taken up the marketplace is up for debate, but everyone agrees that it is influencing the work landscape, not just of today, but of tomorrow as well.

An estimated 57 million workers (about 36% of the workforce) freelance today, according to Upwork’s 2018 survey “Freelancing in America,” and it’s projected that most of the United States workforce will freelance by 2027. Willis Towers Watson’s “2017-2018 Global Future of Work Survey” revealed that employers’ use of free-agent workers is set to rise by 50% in the next three years.

It’s important to note that many of those workers likely have full-time jobs and are supplementing their income with side gigs, which is to say it’s not replacing traditional work.

“We have to understand these numbers in this context and there’s a big debate about how big the gig economy is today, but there’s no question that it has significantly proliferated in the past five to 10 years,” said John Bremen, managing director of human capital and benefits at Willis Towers Watson. “The gig economy is thriving, and we have observed that it’s here to stay.”

So, how are employers responding to this evolving work landscape? Bremen said organizations should approach the gig economy in a few ways. From a talent-acquisition perspective, employers should analyze and identify roles that might be better suited for a freelancer, as it could benefit them from a cost perspective, he said.

Organizations also need to figure out how to then integrate gig economy workers, so they can mitigate risk.

“We’ve seen boards lately really being concerned about standards for gig workers, because a lot of the corporate scandals over the years have been brought about by contractors or subcontractors, so companies have to have ways to ensure cultural fit as well as quality and process controls as well,” Bremen said.

Lastly, organizations should create a talent value proposition (TVP) to supplement their employee value propositions (EVP). By doing this, organizations can align their contingent workforce with the mission, values and culture without unintentionally exposing the organization to co-employment and misclassification risk, Bremen said.

A key part of the TVP is providing fair pay arrangements and access to retirement and health-care benefits, the latter of which isn’t currently possible in the U.S. This has fueled a national debate around companies such as Lyft and Uber, which are wholly dependent on gig workers, yet unable to provide benefits that adequately support that workforce.

Bremen said he anticipates that part of the equation will change, but how quickly is anyone’s guess.

“I am surprised at the slow pace of change on the legislative side in this regard, given the large percentage of workers in the U.S. that are in the gig economy” Bremen said. “I would’ve thought that some of these rules would evolve, but my sense of it is, the pressure is not going to come from the companies, it’s going to come from the voters. So as the percentage of gig workers increases in the U.S., I think they will be putting pressure on their elected officials to update the laws. But until then, I think it’s going to be a little clunky.”

Though gig workers lag behind the traditional workforce in those particular categories, they appear to have a leg up in an area that could prove vital in the future, Bremen said. 

“Reskilling is playing a significant role in the economy today and we’ve seen studies that show gig workers reskill at a much faster rate than traditional workers,” Bremen said. “I think as we see studies about work being impacted by technology, robotics and AI, that workers need to reskill. It’s fascinating that the gig workers are reskilling at a much faster rate.”

GIG ECONOMY ROUNDUP

The Future of Work

Uber Freight recently announced its launch in Europe two years after launching in the U.S. Puja Lalwani examines whether the expansion represents a shift in the direction of the workforce in the future in this HR Technologist piece. Lalwani writes that digital platforms like Uber and Airbnb provide transparency in the gig economy marketplace.

Lyfting the Gig Economy

Lyft’s initial public offering is the gig economy’s Wall Street debut. It’s the first test of how its approach to the future of work appeals to public investors, writes Cat Zakrzewski of The Washington Post. Zakrzewski explains how companies like Uber and Lyft are increasingly facing backlash from drivers whose wages have decreased, which has prompted policymakers to call for action.

Seeing the Gig Picture

The growth of the gig economy is driving rewards professionals to expand the scope of the traditional employee value proposition, writes Renee Smith and John Jones in this Workspan article. In this compelling feature, Smith and Jones present a “3-D” approach to developing a talent value proposition for contingent workers.

Effect on Employee Value Proposition

The rise of the gig economy is a call to employers to revisit the rewards programs and practices being used to attract, motivate, engage and retain, writes Ruth Thomas (Curo Compensation) in this Workspan Daily piece. In the article, Thomas explains how adaptability is key for employers as the definition of an employee continues to change. 

Retirement Planning in a Gig Economy

In a column for MarketWatch, Angela Antonelli writes that the deterioration of retirement security represents one of the greatest economic and financial challenges facing the U.S. One of the key reasons for this, Antonelli asserts, is the rise of the gig economy, which has changed traditional work habits. Antonelli argues that, in light of the increased use of gig workers, innovative public and private sector solutions to address retirement are needed.

About the Author

Brett Christie is a staff writer at WorldatWork.

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