Musicians, actors, authors — people who have made their living working from one gig to the next — have always been around. While many Americans went to work at the same place every day, year after year, receiving their paychecks, the gig economy founders traded relative job security for a life spent working from place to place, getting paid at random intervals often for inconsistent amounts. They had found a way to make their skills and talents so appealing that others were willing to pay for them. Now, they’re no longer the only ones.
Today’s dynamic business environment, fueled by globalization and technological innovation, is making it easier to work on a per project, or contract, basis across a wide range of industries. According to a 2015 U.S. Government Accountability Office report, a full 40 percent of the U.S. workforce are contingent workers or independent contractors. That’s up from 30 percent just 10 years earlier.
Aside from the current economic climate, push and pull factors from the perspectives of both workers and the employers are contributing to the rise of the gig economy. Many men and women are looking for greater diversity and flexibility within their roles and the ability to showcase their particular skill sets, while for some organizations there’s a shift in strategy from “I need to hire a person” to “I need to complete a task.”
Many people are making the leap into freelance, consulting or contract work in part because of companies like Uber Technologies Inc. and Airbnb Inc. that have changed discussions around how people can earn a living and, more important, how they can do it being their own boss.
Take, for example, the corporate marketer with a penchant for writing. He or she can now work as a freelance writer on a range of projects for different employers and no longer needs to be accountable for vendor management, website development or Search Engine Optimization.
Or consider the human resources professional who, among other projects, spearheaded the development and implementation of an internal mobility program. Let’s also say he or she has a background in psychology and enjoys giving career advice to friends and family. Suddenly, it’s not so hard to conceive of this person making their livelihood as a career consultant.
According to a report by the U.S. Bureau of Labor Statistics, the most in-demand skills within the freelance economy include graphic design, web developers, IT support, computer programmers, technical writers, marketing and public relations professionals and construction contractors.
Moreover, job sites like Upwork, Project4hire and Peopleperhour are making it easier for freelancers to find their next project and are seeing increased levels of site traffic. Peopleperhour reports that one million people use its platform each day to find work or talent with in-demand skills. These online resources, many of which focus on a particular industry or, in the case of 99designs, a certain skill set, are further enabling the paradigm shift away from traditional modes of work.
With average hourly rates for freelance or contract workers in the $50-$150 per hour range (often higher when a particularly niche skill set is on the table), organizations shouldn’t be looking at ramping up the number of independent contractors as a way to drive cost savings. Given they are bringing a unique skill set that only a few select people can bring to the table, their hourly or contract rates are often more than salaried employees.
For a variety of other reasons, perhaps driven by talent gaps and a desire for certain expertise, organizations are, in fact, finding value in leveraging contingent workers as a complementary addition to their full-time workforces. Nearly three-fourths of organizations say they currently use a contingent workforce or contingent workers on an ad hoc basis, according to findings from
While more workers will transition into freelance, consulting or contractor roles where their expertise will be on display, the gig economy will not replace traditional models of work. Instead, in the coming years we’re likely to see companies leveraging both models to maximize output from workers on their payroll, whether they’re full-time salaried employees or independent contractors.
Jeanne MacDonald is president, global talent acquisition solutions at Futurestep, a subsidiary of Korn/Ferry.
