What is the gig economy?

The gig economy isn’t as complicated as it appears. It’s just the concept that a varied collection of people with varying talents and skills work on a freelance or contract basis.

In the gig economy, workers earn money by connecting with specific clients and doing tasks, or “gigs,” for those clients. Some employment is as brief as a five-minute survey, while others last for a month or a year.

The gig economy is a type of short-term service industry which gives workers a high degree of autonomy, pays by the task, and offers workers only short-term connections with clients.

It’s a vast field that includes anything from freelance and contract consultants to graphic designers and home healthcare workers, as well as everything in between. Up to 30% of the workforce is now available on-demand.

There are so many examples of gig economy jobs that may not be obvious. For example, your Ubereats delivery allows someone to earn money, and your freelancing friend may be working remotely on a 2-month assignment with a global corporation. Both are examples of this style of working.

According to projections, jobs in the gig economy continue to grow. National systems and the law must adjust to this new trend and protect self-employed people.

What type of people are in the gig economy?

According to the statistics, many more people than ever before are engaging in the gig economy through “side hustles” or other forms of part-time or occasional freelance employment.

There is no ‘one’ type of person who works in the gig economy. Anyone and everyone works there!

Young or old, people from all walks of life are a part of it. Even teenager babysitters count as working in this way!

How do people know if the gig economy is for them?

People end up working in this way for many different reasons.

Some choose this way as it brings them a flexible way of working that works with their schedules. Whether that is due to taking care of their children or that their brain works best super early in the morning, the gig economy allows a much more personal way of working.

On the other hand, it’s important to remember that some individuals may not have a choice. Maybe their need to make money forces them into these short-term and less-secure jobs. Gig economy jobs may be easier to get, but that can come with downsides and unreliable employers.

Choosing whether to work in this way is a very personal decision and requires a lot of thought.

We have collected some of the main positives and negatives for workers in the gig economy. Have a look through to learn more about what drives people’s decisions or to help weigh up whether the gig economy may be the right fit for you!

Pro – Flexibility

Gig economy employees have numerous possibilities, from working the hours they choose to working where they want.

Jobs are frequently assigned with a deadline, but the worker can decide how and when to complete them. Workers can work at convenient times for them and their requirements and on days that are best for them.
Some people find that early mornings on weekends are the best time to get their work done, which may not be possible with regular employment.
Workers are frequently offered the option of working from a home office or a distant location. This is appealing to those who are attempting to work around their families’ schedules.

CONS – No benefits payments

Unfortunately, benefits are not included in the majority of gig economy work. Because you are not a full-time employee, the regulations governing the benefits that the firm must provide you are different. Longer-term contractors may be offered perks by some companies, although this is uncommon. Workers in the gig economy should set aside money to get private insurance.

They must also prepare for retirement and budget how much of each paycheck they will devote to it each month. There are several ways to put money aside for retirement. Most businesses will not handle this for freelancers, so it’s advisable to speak with a financial advisor to learn about your alternatives and which one is best for you.

Paid vacations and sick days are no longer available. Independent contractors are paid per project, and they only get paid in full after the job is completed and delivered. So if they don’t work, they don’t get paid. With all the back-and-forth discussions involved, there’s even the danger of not being paid for work already completed.

Pro – Independance

Many contract or gig economy workers discover that they have total autonomy over their job. This freedom may be aided by not working in an office. With no one looking over their shoulders, gig economy employees may find themselves assigned a task and then left to execute it independently.

This can offer workers a confidence boost and allow them to accomplish a project the way they think it should be done—on their own timeline and in their own style.
Studies have found that people who choose to work independently and make the gig economy their primary source of income are typically more satisfied with their jobs than traditional labourers.

CONS – Social isolation

The remote, distant existence of the gig economy may be a concern for certain employees. Freelancers frequently avoid going into the office and so miss out on the social aspects of the workplace. Gig economy employees may find themselves alone throughout the day, working from home or a remote location. While this increases flexibility, it may also lead to isolation from coworkers and a sense of being left out.

People who work out of necessity (not because they like it, but because it pays the bills) have the same levels of unhappiness with their jobs, whether they have regular jobs or work in the gig economy.

It’s important to remember that this is not the situation for everyone in the gig economy. Lots of jobs involve face-to-face contact with people. For example, those individuals who work as drivers or caretakers.However, it may be the case for designers, developers, or copywriters who operate from home on their laptops. They can work from home for a week without interacting with anyone.

This difficulty, however, is becoming easier to address thanks to the internet.
As the number of freelancers grew, so did the number of co-working spaces. Co-working chains such as WeWork and Fora have sprung up and flourished worldwide. A co-working space is a shared office space that you can rent for short periods. Lots of freelancers are paying to work in these areas several days a week. Whether it helps these workers concentrate better or gives them much-needed social interaction, these spaces can be a blessing for freelancers.

However, consider someone who spends all of their time alone performing long-distance pickups and deliveries. All that time without human contact can be tough to cope with. There’s no such thing as a co-working space for such jobs.

Pro – Variety of jobs

Workers in the gig economy may find themselves with a wide range of tasks to perform.

Instead of doing the same tasks every day, each project or gig might include various features that make the work more exciting. Workers may become more enthusiastic about projects and be more creative with their job due to the variety.
They allow employees to focus on their strengths, making them feel more involved and, as a result, increasing productivity. So, from an aspiring artist or creative perspective, it’s a terrific method to make a livelihood while devoting time to their craft and building a career.
In the long term, after you’ve established a strong reputation and portfolio, you will have many recommendations. In that case, you’ll be able to choose and accept the employment offers that best suit your interests and give you a work-life balance.
The huge variety of job opportunities emerging in the gig economy means that people with a large range of skills can use it. It can be beneficial to help those without jobs find employment that suits them quickly.
However, depending on where the worker lives, demand may not be sufficient to provide a steady income.

CONS – More stress

Different sources of stress are involved for workers in the gig economy. Some examples include:

Workers in the gig economy must be constantly on the lookout for their next gig or be prepared for changes in their present one. This might cause stress as most individuals want to feel safe and secure in their jobs.Workers in the gig economy are occasionally faced with unexpected employment changes, such as getting laid off or reduced income. However, this can happen even in typical full-time jobs.

Being separated from other employees causes stress, and it can be challenging to convey questions or concerns about a project. There is never a consistent paycheck, and the number of hours worked is constantly changing.

Pro – Pay

The pay for independent employees differs from one firm to the next. Some businesses pay gig workers less, while others pay them more since they don’t have to provide benefits on top of their wages.

They are frequently allowed to charge hourly charges for their services. This implies individuals may choose their working hours and receive rewards for extra hours worked.

In addition to the main work, things like meetings and phone calls are chargeable.

As a bonus, both higher education and the gig economy are very flexible. Consequently, it is feasible to pursue higher education while working in the gig economy. As a freelancer, adding another degree to your résumé might help you make more money.

However, many people who perform activities that need less technical expertise and hard skills will take whatever temporary job they can get, even if the pay isn’t great. This means the work may not be desirable and can end up paying less than a regular job, which must be considered.

CONS – Taxes and expenses
Most employers will not deduct taxes from your compensation. As a result, you’ll have to budget for paying taxes. Most freelancers should set aside 25-30% of each paycheck for taxes to avoid owing money at tax time.
Workers in the gig economy are often liable for personal costs like computers and cell phones. While they can be deducted from your taxes, you should be cautious about what you deduct. Many freelancers prefer to work with an accountant to look over everything they use for their business and figure out what they may deduct from their taxes.

Is the gig economy right for me?

Regarding whether the gig economy is suitable for you or not, you should consider your personality and experience and whether doing it part-time or full-time would be a right fit for you. You must also think about what the market is looking for. Are the skills you have in high demand?

There’s one thing for sure: there’s no need to rush. Take your time in coming to a decision. Start small with a few freelance jobs here and there. We promise: the gig economy isn’t going anywhere.