By Neal England
Practice Leader – Human Capital Management
The gig economy has taken off.
Fieldglass, a software company, reports that about a third of our nation’s economy is now made up of such nontraditional workers. The gig, or on-demand, economy refers to companies who hire freelancers for individual work projects, or gigs, often through an online or mobile portal.
Intuit, maker of Quicken and other business management products, predicts that by 2020, 43 percent of American workers will be part of the on-demand economy. Forty-five million Americans, or 22 percent of adults, say they have already worked or offered services in the on-demand economy, according to a survey developed jointly by Burson-Marsteller; The Aspen Institute’s Future of Work Initiative; and TIME.
The implications of this new breed of worker — the independent contractor, gigger or solopreneur, and how they could disrupt the labor market, is still sorting itself out.
Why workers and businesses like the gig economy
Workers in a wide variety of industries have embraced the gig economy, especially as digitization allows them to work from nearly anywhere as long as they have a laptop and Internet service. These independent workers like the work-life balance that affords them more time with family and less time commuting. The concept also allows for greater flexibility and work enjoyment as these solopreneurs can accept only those gigs that are a good fit in terms of interest, time and money.
Companies have embraced the gig economy as well because it allows them to save on bricks-and-mortar office space, reduce or avoid the costs of employee benefits, and operate with a leaner workforce. They can hire a freelance professional when one is needed but they may no longer have to carry that specialized professional and potentially costly hire on the payroll as a full-time staffer.
Who is using the gig economy
Work-by-gig contractors and the companies who hire them are finding startups have sprung up to represent their particular industry in the gig economy. High tech workers, writers and marketers, and healthcare workers, as examples, are all part of the gig economy where online portals have sprung up to help businesses and specialized freelancers connect with one another.
The effect on staffing companies
As the contract workforce grows, staffing companies will need to figure out how their operations fit into the gig economy. Will more create their own on-demand staffing apps and online portals to connect workers and businesses or will they lose gig business to tech companies that have already created and are now perfecting such apps?
Much will be written on the gig, or on-demand, economy in the coming months and years as the nation’s labor market evolves and we see whether this type of workforce is here to stay in significant numbers. There will be more research, surveys and predictions about just what this gig economy will mean for many segments of the economy, including staffing agencies.
Capital Alliance Corporation is a Dallas-based investment banking firm with an extensive international reach and a 40-year history of providing trustworthy advice to private company shareholders who want to sell their businesses. Our team has deep operational and M&A experience across broad human capital management (HCM) and technology sectors.