How the Gig Economy Is Going to Be The Catalyst for Fundamental Change in Business
March 8, 2021
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by Stephen Kanyi

The rise of apps like Airbnb and Uber is a sign of how IT is changing how we work. Companies and consumers are shying away from the traditional method of hiring full time workers and instead opting for independent contractors and freelancers. This trend has grown exponentially, especially in the last few years, with a number of companies like Uber, Airbnb, Lyft and Upwork being formed to leverage this opportunity. These companies are part of a whole ecosystem of freelancers, independent contractors, vendors, professionals and consumers, all comprising what is today termed as the Gig Economy.

The Gig Economy can also be viewed as an alternative for people who have been unable to get full time employment in an ever shrinking ‘traditional’ economy. It is an open secret that unemployment has become more acute in both developing and developed markets. This has been primarily due to the rise of automation which has displaced a lot of jobs in manufacturing and services. As a result, many people have turned to freelancing and part-time work. Even those with full-time employment are finding it hard to make ends meet with one salary and are supplementing their incomes with part-time gigs.

Increasing global mobile and internet penetration has also facilitated the rise of this new mode of work. Uber, for instance, a service that is wholly dependent on smartphones, has grown to be a global phenomenon. The app has registered drivers from as far nations as Nigeria, India, the Philippines and Brazil – all using Uber as their primary means of income.

These apps are enabling workers to gain a level of flexibility and adaptability that would be impossible to get in the traditional workspace. Where previously one was supposed to clock in to work in the morning and leave in the evening, freelancers have the ability to work whenever they choose and are also unhindered by location; they can work from home.

How the Gig Economy is Changing Business

The gig economy is changing the workforce and creating demands that were not so important for traditional workers previously. Due to the rise of the gig economy, workers, even in the office, want more flexibility in terms of where and when they work. Employers, in turn, are reforming their work philosophies to what is now termed as a ‘result-oriented culture’. This means putting less emphasis on the number of hours worked but rather on the results. This culture also involves setting clear strategic goals while supporting individual autonomy.

Businesses are also benefiting from the wide pool of labour created by the Gig Economy. Websites such as Upwork present quite a number of options for any prospective employer. This also means that labour will be cheaper as compared to the traditional employee, accustomed to packages and benefits.

Consumers also benefit from the increased number of options. Lyft for example, presents the prospective buyer with a number of drivers to choose from. The rider can select which route, driver or even the car she/he desires to ride in.

It is certain now that the gig economy is here to stay and will become more entrenched in our global economy with every successful delivery or service offered. As a result, we can look forward to a quite a number of changes in various sectors of our lives.

Employee loyalty for instance, will be hard to achieve, as gig workers will have a wide range of options to choose from. Therefore, companies will have to work harder to retain top talent. This can be in form of better pay, benefits or even permanent positions.

We can also expect the gig economy to extend to the upper levels of the corporations. Today most freelancers, part-timers or independent contractors occupy the lower rungs of organisations. As the trend grows, executives will also be recruited as freelancers or part-time workers.

As the gig economy expands, companies and institutions that can best leverage the trend to get top talent will define work in the 21st century.

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