“The ‘Gig Economy’ and What It Means For You”

“The ‘Gig Economy’ and What It Means For You”

The “Gig Economy” refers to the labor market being utilized by businesses hiring freelancers for short-term contracts as opposed to permanent jobs.  Currently, approximately 30% of the US workforce are freelancers.  This number is expected to increase to where the majority of the the workforce will be independent freelancers in the next decade.  The trend is spreading globally as well, as other countries adopt the same stance with regard to jobs. 

Benefits to Business

Companies are getting savvy and outsourcing more and more work to freelancers in the gig economy.  The benefits to businesses are:

– Not having to pay benefits. Businesses don’t need to pay for workman’s compensation, medical insurance and other perks that a full-time employee normally gets. 

– Make freelancers compete.  There are websites like upwork.com and fiverr.com that allow businesses to post jobs and make freelancers compete based on price, skill level and length of time to complete work. 

– Tasks are done on schedule.  By hiring freelancers, companies don’t have to worry about a task getting done on time due to vacation or sick days. 

– Paying a single fee.  This makes it easy for businesses who can’t justify paying a salary to a full or even part-time position due to the limited work scope, in many cases.

Some companies are now outsourcing entire departments like marketing and human resources to digital agencies and consultants. This trend will continue and most likely spread to other departments in the future.

The Freelancer Lifestyle

Not everyone  has the  entrepreneurial spirit.  For those who do, freelancing is a  way to create their own destiny, work for themselves without a boss looking over their shoulder and freedom in general.

Here are some of the benefits to freelancing:

– It can be a lifestyle business. In my case, I’m a marketing consultant and copywriter and can work anywhere there’s a wifi connection.  I’m not limited by going to an office every day with set hours. 

– You can set your own fees.  Like any other business freelancers are competing with others  and  need to keep their fees low initially to get work, establish a track record and build a portfolio of whatever their specialty is. Once established you can incrementally—and sometimes by a wide margin—bump your fees up depending on your skill level and what the market will bear.

– You can make your own hours.  I’ve been working with one freelancer for over 16 years and she keeps non-traditional hours.  She normally works late into the night and sleeps until noon or 1pm. This works for her, fits into her schedule and she’s extremely productive.

– You can do work that truly matters to you.  Most freelancers follow a passion or have a skill that they truly enjoy. The most successful freelancers are the ones who don’t consider their work, “work”. 

– You can determine what success means to you.  Success is a subjective word and concept.  I know freelancers who are on fire with what they do and continually build their business and branch out into other areas to maximize their productivity and income. I also know freelancers who love what they do but don’t work ungodly hours in order to scale their business.  Instead, they have learned to maintain a level of balance and income that suits them. 

It’s Not All Roses

In the gig economy, these are the upsides to working for yourself as an independent contractor.  Here are the downsides:
–  You are responsible for everything.  There is no “passing the buck” as a freelancer. You alone are responsible for the job getting done or not and, in the end, everything comes back to you regarding the contracted work and making the client happy.

– You’re out of work after each job.  It’s fairly common for freelancers to spend approximately 40% of their time searching for jobs and 60% fulfilling them. It’s a constant marketing game to find work that is in your niche, writing proposals that get attention, and ultimately get the job. 
You live with uncertainty.  For many freelancers, it’s a “feast or famine” lifestyle. There is usually no consistency in landing contracts and some months are better than others as far as work and income is concerned. 
– You’re responsible for your own taxes, insurances, etc.  This scares many people from pursuing the freelance lifestyle.  Being “chief cook and bottle washer” can be overwhelming for some people and the security of a regular job, set hours and a salary or hourly wage is more comfortable for them. 

– It takes discipline.  You need to stay motivated, make sure the work gets done and continually market your skills and yourself for new contracts. 

As the gig economy moves forward, many jobs will be lost to automation and industries being disrupted by the internet of things.  Many people with low-level skills will be forced to either take lower-paying jobs or develop their talents to market as freelancers.  As things in the labor market continue to change rapidly, it’s a good idea to be prepared and plan now for these changes. 

To get my free ebook, “How to Become a Full-Time Freelancer in The New Gig Economy”, email me at tim@timpic.com