The Gig Or Permanent Worker: Who Will Dominate The Post-Pandemic Workforce?
The last decade has seen the rise of the gig economy, comprised of independent contractors […]
The last decade has seen the rise of the gig economy, comprised of independent contractors in flexible jobs. Its trajectory has been slow, certain and steady. In fact, even before the pandemic, the Bureau of Labor Statistics reported that 55 million Americans — or 34% of the U.S. workforce — were gig workers in 2017. Alongside these trends, as Uber and Airbnb scaled up, grew in influence and epitomized tomorrow’s sharing economy, it seemed like the gig economy was indeed the future of work.
Then, the pandemic disrupted business as we know it. Lockdowns paralyzed global economies and unemployment soared. Initially, the gig economy was among the worst-hit: In one survey, 52% of respondents from the global gig economy lost their jobs and another 26% had decreased hours. Yet, the pandemic also introduced several improved ways of working for organizations. Most importantly, social distancing norms made it necessary for organizations to embrace remote working, which emerged seamlessly as the new normal. Now, a Gallup poll shows almost half of U.S. workers would prefer to work remotely post-pandemic. This has profound implications for the future of work as independence and location flexibility are cornerstones of many positions in the gig economy.
Even before the pandemic hit in 2018, it was estimated that by 2023, 52% of the workforce will have worked or will be working independently. Today, it is estimated that the gig economy already contributes over $1 trillion to the U.S. economy.
How The Gig Economy Went Mainstream
Two key factors have motivated workers to choose the gig economy over more traditional models.
• Flexibility as a facilitator: A key factor driving the relentless growth of the gig economy has been the increased flexibility it offers the workforce. In fact, long before the pandemic, a McKinsey report indicated at least 70% of independent workers were independent by choice, in part because of the greater flexibility it gave them. Some workers also saw this as an additional source of income. Yet, financial gain was not a major consideration for most of them. The primary motivation remained the ability to create a lifestyle of their choice.
• Technology as a driver: While flexibility could be a motivator, advances in technology are clearly accelerating this trend. The first phase was the spurt in new platforms, such as Upwork and Fiverr, that created an ecosystem in which gig workers could sell their services or bid for work across the globe.
The pandemic further accelerated these factors. A 2020 Upwork study suggests that more white-collar occupations and workers are becoming part of the gig economy and that 24% more people entered the gig economy during the summer of 2020 than in previous years. It is indeed a progression beyond the app-based drivers for Uber or Lyft, and the gig economy now consists of a more diverse and highly skilled workforce. With the pandemic, more than ever in the past, the gig economy has truly gone mainstream.
How Enterprises Can Integrate The New Gig Workforce
In the new normal, where the gig economy powers traditional enterprises, organizations will now be compelled to overhaul legacy talent management systems. As in California, we already see governments struggling to provide a legal framework that provides sufficiently for such a new-age workforce. Similarly, enterprises will require human resource processes to recruit and manage talent in today’s digital organizations. The hyper-personalization of HR services will no longer be a projection for future organizations; it will be required.
Today, organizations will have to customize benefits based on an employee’s life situation more than ever before. This is especially relevant after the pandemic, through which employees have experienced the value of flexibility at work.
In such a world, I expect the gig economy to receive a fresh boost. As more digital platforms rise to the occasion to fulfill services, I foresee work contracts getting “Uber”-ized and more organizations creating tailor-made job descriptions and employee experiences. In this scenario, technology will enable both customers and our internal workforce. We will need to create hybrid work models, merging the traditional workforce with the gig economy to attract and retain the best talent.
As every business becomes a digital business, new AI and cognitive platforms will facilitate the ease of creating employee experiences. It will also become imperative for an organization to target its personalized employee experiences. Enterprises that succeed will retain talent, create an empowering work experience and elevate career advancement.
