Today’s economy is becoming more widely known as the gig economy due to the labor market relying heavily on temporary and part-time positions filled by independent contractors and freelancers rather than full-time permanent employees. There are certainly advantages and challenges of working with a significant workforce such as freelance or gig workers who are not traditional full-time permanent employees. For the remainder of this article, freelance and gig workers will be referred to simply as gig workers.

What are some advantages of gig workers?

Gig workers often work for several organizations and can enjoy respectable earnings as much as $75/hr+ for their time. A gig worker may receive compensation for their work from several organizations in the same month, but the time they put into any one organization often varies. Gig working affords the worker flexibility with their schedule, and organizations have been working with PEOs in order to enjoy flexible staff to accommodate their needs such as seasonal or cyclical time periods. Utilizing freelance or gig workers has become an increasingly popular method of business practice. Since utilizing gig workers generally avoids the expenses often involved with full-time permanent employees such as workers compensation and payroll taxes.

There are still some of the same training expenses and learning curves with gig workers, but typically much less involved than employees since gig workers tend to work remotely and not visit the office regularly. With a proper approach to attracting and retaining gig workers, an organization can enjoy the advantages of utilizing gig workers without the expenses employees are associated with, while gaining flexibility of enjoying a worker base that is able to be engaged as needed. Organizations for example do not need to lay off gig workers when demand is lean, they just suspend the use of or do not extend the contract for a period until the demand exceeds their core employee’s productivity.

Who is today’s typical gig worker?

  • Average age is 38 years old (MBO Partners)
  • 49% are Millennials, born between 1981 and 1996 (Upwork)
  • 37% belong to Gen Z, born between 1997 onwards (Upwork)
  • 90% are under the age of 45
  • 53% are female, 47% male (MBO Partners)
  • 57% hold at least a bachelor’s degree, 86% have some college education (MBO Partners)

While they can earn $50-$75 per hour or more, the middle 50% earn $28k to $78k per year, 10% earn over $100k annually from their primary freelance position, the top 10% earned over $150k in the past 12 months. (MBO Partners) 60% of freelance gig workers charge over $75 per hour (Upwork)

How common is a gig worker engagement in the marketplace?

According to MBO Partners, a direct sourcing platform analyzing talent and marketplace statistics, there are approximately 152 million workers in the US. Currently there are 75 million freelance or gig workers in the US marketplace which makes up approximately 48% of the workforce. The number of gig workers is expected to surge to between 86.5 million to 100 million by 2028. This means in the next four years it is expected that gig workers will for the first time hold a greater share of the marketplace than true W2 full-time permanent employees. This surge is expected due to the nature of business today, and with the need for a flexible less expensive workforce, it has been forecasted that 89% of companies intend to increase their usage of gig workers in the next five years.

What will this mean for the marketplace? And how will businesses pivot in order to utilize this trend to their benefit?

Employee engagement and loyalty has been a key marker of an organization’s success. The more engaged an employee workforce is, the greater the passion, interest, creativity, productivity, and general morale throughout the workplace. This leads to higher retention of employees, lower employee theft, less injuries, less pseudo-injuries and workers compensation claims, less sick time utilized, more creative employee driven efficiency solutions…the advantages of a highly engaged workforce is literally never ending.

On the contrary, a disengaged workforce can destroy an organization from the inside out. Engaged employees are also content and not seeking employment elsewhere, they are loyal. There has been a trend over the last few decades that loyalty between the employee and employer has become exceedingly one-sided. Employers are squeezed between the pressures of ethics and profits. Employees of 20-40 years laid off with no warning because they are no longer needed at their employer. It is a difficult juggling act for an employer with a fiduciary responsibility to increase stockholder share prices, cutting costs of doing business, while attempting to engage and loyal workforce. There are many duties an organization needs performed that require a committed, reliable, and engaged employee. There are also many tasks that do not necessarily require the expenses and complications of an employee-based workforce. There are also many talented gig workers whose talents are not needed consistently. Tasks such as data science and analytics, software development, IT and network security, digital marketing specialists, project managers, scientific and medical services, engineering and architecture, financial analysis, video production, accounting, marketing, advertising, painting, structural repairs, deliveries, to name a few.

An organization can determine which roles are key roles which they require full attention and commitment which an engaged employee is most appropriate; and which roles are important, but not requiring oversight and controls, that a gig worker can perform. Finding the balance of the workforce for an organization and recruiting accordingly is key with this strategy.

How can an organization increase gig worker engagement and loyalty?

One of the challenges that organizations face is how to engage a gig worker, and how to optimize loyalty to the organization. The organization will likely save much time and financial resources by utilizing a lean employee base along with gig and flex workers when needed for the appropriate tasks. Rather than take the bare bones approach and pass all that savings on to stock holders, they might consider investing a portion of that difference. There is plenty of data and supporting evidence that shows the efficiency and savings of an engaged workforce. Allocating some of the savings from leaning the employee population and optimization of gig workers, into benefits for BOTH the employees and workers, and employee appreciation programs will likely improve employee engagement, and allow stockholders to realize profits without sacrificing integrity and reciprocated employee loyalty.

Like employees, gig workers who know they are appreciated, earning a better wage than their other options, and with security provided to them via worker benefits, will very likely prioritize the contracts of the company that gives to them more than the other organizations they work for which they know is simply transactional.

Some of the challenges gig workers face are as follows: regular income streams, limited benefits access, and social isolation. An employer who engages in a strategy to leverage gig workers would be wise to provide resolution to these challenges in their own creative way, in order to captivate and engage the employee/worker full potential and the productivity and efficiency that engagement drives.

Do you expect your business could thrive with an approach strategically engaging gig workers?

Utilizing gig workers is not for every business, but with 89% of businesses planning to increase their usage of gig workers, it is imperative that organizations carefully consider the advantages and challenges involved with utilizing a gig workforce. With a strategic approach to this option, it could be truly a game-changer. But don’t take my word for it.

“The Uberization of work isn’t a blip or a trend. It’s the future of work.”
– Sara Sutton, CEO of FlexJobs

“The shift is inevitable. Highly skilled independent talent is one of the most dominant forces reshaping the future of work.”

MBO Partners CEO Gene Zaino