The Gig Economy: The Surge of Side Hustles

The advent of the internet brought about a significant transformation in the conventional workforce. Innovations like email and telecommunication not only fostered greater flexibility in work arrangements but also facilitated faster connections among people. In the midst of the COVID-19 pandemic, this tech-driven work culture was further amplified.

Today, individuals have an array of options for sustaining their livelihoods, and the conventional 9-to-5 job is no longer the exclusive avenue for financial support. Instead, people have embraced a more creative and self-sufficient approach to work, engaging in short-term employment as the need arises. This evolving work paradigm is commonly known as the gig economy.

Although gig work has been in existence for several years, the COVID-19 crisis  generated a substantial surge in interest in part-time and freelance opportunities. But is this surge entirely advantageous, or are there drawbacks to gig work? Let’s take a closer look.

What Exactly is the Gig Economy?

The gig economy comprises a labor market characterized by freelance or part-time positions rather than conventional full-time, long-term contracts. Gig workers can span a wide array of domains, ranging from driving delivery vehicles to editing documents, providing technical support, or showcasing artistic talents.
What distinguishes someone as part of the gig economy is not their background or chosen profession, but their commitment to short-term, project-based assignments, rather than being long-term employees of a single organization.

It is even feasible for an individual to be part of the gig economy while maintaining regular employment as a contracted worker. For instance, one might work as a banker while taking on gig-based roles like bartending or emceeing during their free time to augment their income. Gig workers frequently find themselves engaged in a far broader spectrum of tasks compared to full-time employees of a single company.

Gig economy jobs

Some of the most rapidly growing segments within the gig economy pertain to creative and knowledge-intensive industries. For instance, a graphic design studio might contract an advertising consultant for a specific project, or a hotel might enlist the services of an expert copywriter to craft a new menu.

Moreover, contemporary technology companies are playing a pivotal role in expanding the gig economy's reach by facilitating the swift and efficient connection of workers with consumers. These organizations divide the gig economy into three distinct components:

1. Gig economy workers, who are engaged to complete specific tasks or projects.
2. Consumers, comprising individuals or companies seeking the completion of specific tasks such as a taxi ride, website design, or delivery service.
3. Companies connecting workers directly with consumers: These entities are frequently app-based platforms like Waape or Fiverr, which generate gig economy opportunities based on immediate demand.

The Origin of the Term "Gig Economy"

Interestingly, the term "gig economy" traces its origins to the world of jazz music. In 1915, jazz musicians coined the term "gig" to denote their individual performances. Nowadays, the term is embraced across various musical genres and extends beyond the realm of music.
When applied to the contemporary work model, "gig" is almost synonymous with "project" or "flex." It underscores the self-contained, one-off nature of the task at hand for which a worker, whether a jazz musician, graphic designer, or another professional, is engaged.

Why the rise of the Gig Economy

Increasingly, more people are turning to the gig economy as a means to earn additional income or even make a livelihood. But how did this remarkable growth come about? Several factors have contributed to the accessibility of the gig economy. Let's dissect the principal drivers behind the gig economy's ascent.

The 2008 Economic Crisis 
Following the 2008 financial crisis, numerous individuals found themselves either unemployed or underemployed. Consequently, there was a substantial uptick in the demand for temporary employment as people sought to replace or supplement their income. Many individuals juggled several part-time or freelance jobs simultaneously, or combined a fixed contract position with a flexible secondary job. As the gig economy became more familiar, gig work became normalized on a larger scale.

The Advancement of Technology
The internet has granted gig workers the ability to secure employment from virtually anywhere in the world. Geographical location is no longer a limiting factor when it comes to finding the right collaborators, whether you're a freelance illustrator seeking an author or an agency in need of an SEO specialist for a major project. This cutting-edge technology has given rise to digital, often app-based platforms within the gig economy that seamlessly connect consumers with workers. Think of platforms like SafeBoda, which match drivers with passengers, or Tubayo, which connects hosts with travelers in search of accommodations.

The Global COVID-19 Pandemic
Amid the worldwide COVID-19 pandemic, gig economy workers assumed a pivotal role in maintaining a semblance of normalcy and sustaining services that might have otherwise collapsed. From crucial contactless food and medicine deliveries to online educational services, gig workers have offered indispensable support during lockdowns across the globe. As many individuals lost their jobs or faced reduced working hours, they turned to the gig economy as a means to swiftly supplement their diminished income.

Presently, it is not uncommon to encounter stories of individuals transitioning from traditional, salaried employment in one field to becoming gig workers in another domain. An example is content writers who transitioned from full-time employment with a single company to freelancing for various clients.

The gig economy also played a crucial role in sustaining restaurants that would have otherwise faced permanent closure during lockdowns. While conventional staff like servers and bartenders were not in demand during lockdown, delivery personnel stepped up to ensure that hungry customers could still access restaurant food. This not only allowed chefs to remain employed but also enabled restaurants to meet their rent payments, with the hope of reopening once lockdowns were lifted. Various apps, such as Glovo, StackEats, and JumiaFood, facilitated this process, creating employment opportunities for delivery workers.

The Pros and Cons of the Gig Economy 

While the gig economy has enabled millions of individuals to approach work with a fresh and empowering perspective, it is not without its drawbacks. Before venturing into the gig economy, it is essential to familiarize oneself with the market's advantages and disadvantages.

Benefits for Businesses

• Cost Efficiency: One of the primary benefits for businesses in the gig economy is cost savings. Unlike traditional employment, where employers are obliged to provide various benefits, such as health insurance and paid leave, gig workers typically operate as independent contractors. This means companies can avoid the financial burden associated with these perks, allowing them to allocate resources more efficiently.
• Streamlined Processes: The gig economy streamlines administrative processes for businesses. With fewer legal and regulatory requirements, the paperwork and compliance obligations are significantly reduced. This simplicity is a boon for companies, as it frees them from the complexities of managing a large workforce.
• Ready-to-Work Talent Pool: Gig workers often come prepared to take on tasks immediately. They bring their own expertise and are equipped to start working without the need for extensive training, office space, or equipment. This quick integration of talent can significantly enhance project efficiency.
• Access to Specialized Skills: Companies can leverage the gig economy to tap into specialized skills that might be too expensive to hire on a full-time basis. For example, an organization can hire a seasoned web designer for a specific project, benefiting from their expertise without committing to a long-term employment relationship.

Drawbacks for Businesses
While the gig economy offers numerous advantages for businesses, it is not without its share of challenges and drawbacks. It's important for organizations to be aware of these potential downsides when considering engagement with gig workers.

• Limited Control: When businesses contract gig workers, they often have less control over the work process and outcomes compared to traditional employees. Gig workers typically operate with a high degree of independence, which can make it challenging for businesses to manage and supervise their work effectively.
• Dependence on External Talent: Relying extensively on gig workers can leave businesses vulnerable to fluctuations in the availability of external talent. Gig workers may have multiple clients and projects, which could lead to scheduling conflicts or unavailability during critical times for the business.
• Training and Integration: Unlike full-time employees, gig workers may not be as familiar with the company's culture, processes, or specific requirements. This can necessitate additional training and onboarding efforts, which could be time-consuming and costly for the business.
• Security and Confidentiality: Sharing sensitive company information with gig workers can pose security and confidentiality risks. Businesses must implement robust data security measures to protect their proprietary information when working with external talent.

Benefits for Workers

• Enhanced Work-Life Balance: For workers, the gig economy offers a more flexible approach to employment. Freelancers have the freedom to choose the types of work that interest them and can fit these tasks around their individual schedules. This flexibility helps improve work-life balance and allows individuals to pursue diverse projects.
• Variety and Engagement: Gig workers are not confined to a single, monotonous job. They have the opportunity to engage in a variety of projects that align with their skills and interests. This diversity keeps work engaging and stimulating, preventing the monotony often associated with traditional full-time roles.
• Escape from Fixed Workdays: Gig economy workers are not bound to a fixed, conventional workday. They have the autonomy to decide when and where they work. This control over their schedules enables individuals to adapt their work to suit their lifestyle, leading to increased job satisfaction.

Drawbacks for Workers
Consider the disadvantages of gig work before you sign any contracts, or decide to leave your long term employer for good.These disadvantages often include

• Lack of Employment Benefits: Gig workers typically do not receive traditional employment benefits such as health insurance, retirement plans, paid vacation, or sick leave. This can leave them financially vulnerable in times of illness or emergencies.
• Income Instability: Gig work can be unpredictable, leading to income instability. Workers may experience fluctuations in earnings due to variations in demand for their services, making it challenging to budget and plan for the future.
• No Job Security: Gig workers often lack job security, as they are not protected by employment contracts. They can be let go without notice, which can be particularly challenging for those who rely on gig work as their primary source of income.
• Limited Legal Protections: Gig workers may have fewer legal protections compared to traditional employees. This can make it difficult to address issues like workplace discrimination, harassment, or unfair treatment.
• Isolation and Loneliness: Many gig workers operate independently and may not have the social interactions that come with a traditional workplace. This isolation can lead to feelings of loneliness and a lack of connection with peers

 

Nasdan's Commitment to the Gig Economy

At Nasdan, we understand that the gig economy is not just a trend but a fundamental shift in the way businesses access technology expertise and services. As we continue to embrace the gig economy, we remain committed to delivering top-tier project-based technology services. We are not only a technology provider but also an active participant in the gig economy, both as a worker and a partner. Our dedication to specialization, collaboration, and adaptability allows us to navigate the dynamic landscape of technology solutions, ensuring that our clients receive the most efficient, cost-effective, and cutting-edge services in the industry.

Contact us today to make a real difference for your business.