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Gig Economy: What Is It And It’s Benefits

Things have changed drastically across most industries where the ‘gig economy’ has emerged. In a gig economy, more and more independent contractors are doing temporary and short assignments or simply ‘gigs’, such as food delivery or car journeys, rather than being employed permanently.

Most people from the workforce are moving on from traditional work arrangements into a non-standard. Freelance work or short-term contracts are fast developing in the labour market.

It’s likely that those who join the gig economy will remain part of it for quite some time, and the percentage will become progressive.

Who joins the gig economy?

The Millennial workers in their mid 20’s up to mid 30’s have been leading the shift. Adding into the mix are those in their early 20’s, fresh university graduates who are now entering the workforce and will keep this trend going.

Benefits of gig economy

There are different reasons why this is now the trend. One of them is that people prefer to spend their time and effort working on things they really want to do and in an environment where they excel. This benefits both the workers and employers.

Benefits for the workers:

  • Autonomy — Being their own boss is appealing, as it gives workers a sense of seniority and independence.
  • Flexible working — The ideal work-life balance seems more achievable with various options in a gig economy environment.
  • Acquiring industry knowledge — Workers can choose to work on multiple projects and organisations. It exposes them to relevant industries while gaining considerable knowledge on the latest systems and processes.
  • Loving the work — Workers who do something they’re good at and enjoy are engaged with what they do. Short-term contracts give satisfaction to provide high-quality skilled work.

Benefits for the employer:

  • Availability & options — Skilled workers are available when needed in a network of independent contractors. Employers can have more financially viable options for their business by hiring skilled staff based on their current needs and budget.
  • Motivated staff — People working on what they actually want leads to better outcomes, productivity, and engagement.
  • Increase in Employer Value Proposition (EVP) — The organisation can promote flexible working with this trend, which raises their EVP. Keeping up with the current market trends attracts the best talent.

Disadvantages of gig economy

If there are benefits in the gig economy, there are also disadvantages that come with it. 

Disadvantages for the workers:

  • Unpredictability — In terms of continuous work, it’s inconsistent. Being in a gig economy can be stressful because of lack of job security in between contracts.
  • Limited opportunities for training — Most businesses invest in their employee’s training & development. Workers in a gig economy are left to themselves in keeping their skills up-to-date. What’s also missing is the benefits of regular performance reviews.
  • Social isolation — This can either be a good or bad state for a worker to be in. Usually, being part of a team gives a sense of unity and support. Lack of contact with co-workers can be lonely.

Disadvantages for the employer:

  • Workforce instability — Employers will have to tailor the work suitable for independent contractors. Creating short-term assignments or projects to reach the business’ long-term goals could be an ongoing process.
  • Unreliability — Although high skilled workers’ previous projects could be a good indication of their capabilities, it can be hard to monitor someone working remotely.

If you liked our “Gig Economy: What Is It And It’s Benefits” and took away some valuable information, check this space constantly for more tips to get out of debt and updates on the best budgeting apps in Australia.