The gig economy is booming and business leaders are taking note.
From the C-suite on down, Mercer’s 2022 Global Talent Trends report shows that gig is becoming a favored strategy, with six in 10 executives embracing this work model.
Gig work has been a flexible solution for many individuals looking to find additional income.
The increase in preference for gig workers is not surprising considering the exponential growth the gig economy has seen in recent months. Ballooning by 30% during the pandemic, the gig workforce is now on track to surpass the full-time workforce in size by 2027. This phenomenon has prompted changes in business strategies that will assist organizations as they battle labor shortages, inflation, and prepare for the future of work.
The pandemic undoubtedly turned America’s job industry upside down. A substantial side-effect has been the “Great Resignation.”
Bestselling author and career expert, Ashley Stahl, said, “Low unemployment rates mean that more jobs are available than there are workers to fill those jobs. Employers are scrambling to find workers as is evidenced by hourly wages increase of 6% in March 2022. The pandemic led to an imbalance between supply of workers and employer demand. As the pandemic closed, the Great Resignation kicked into high gear.”
As a result, over 47 million workers quit their jobs in 2021, and 11.3 million jobs were left empty at the end of February 2022. The resulting labor shortages have caused businesses to look for additional methods of meeting their labor needs.
Mike Swigunski, author and founder of GlobalCareerBook.com, suggested that the pandemic, and the subsequent labor crisis caused by the Great Resignation, created the “perfect storm” for the gig economy.
“The first step was that people were forced to sit at home for months on end, this allowed them to see what their lives were like without their jobs and reconsider their options,” Swigunski said. “The second step that followed is that older people, Gen Xers, and even some Boomers began dipping their feet into the gig-economy. This is notable because the majority of gig-workers had consisted of Millennials and Gen Zers. The third and final step has been the Great Resignation, people have decided in droves to stick to their gig-work rather than return to their offices. It’s been one thrilling and unexpected ride,” he said.
Shaping the future of work with tech
According to Statista, gig work will generate $455 billion in 2023, up 53% from 2020. Steve Hatfield, Global Future of Work Leader at Deloitte said, “Fiverr started in 2010 as an online exchange where people sold their skills on a project basis, starting at $5 per assignment. Today it is a multi-billion-dollar global marketplace spanning 160 countries and attracting millions of customers per year. And it is far from alone.” Upwork, Task Rabbit, and Hyer are among the dozens of platforms that match people with gigs and businesses with independent contractors.
Dave Dempsey, CEO and Co-Founder of Hyer, an on-demand labor app that connects leading businesses with local gig workers across 27 states, explains the rise in popularity he’s witnessed since launching Hyer in 2018.
“Prior to the pandemic, we began to notice a shift in the labor landscape along with the adoption of new technologies. Increasingly, people were gravitating toward a more flexible way to work, and businesses were shifting to a more flexible way to meet their labor demands,” Dempsey said. “Then, COVID-19 hit and we watched the gig economy explode overnight. Today, platforms like Hyer aren’t just a stopgap, but a strategy many businesses are putting in place to support both immediate and future labor needs.”
As businesses look for ways to develop a workforce of the future, there’s no question that gig workers are becoming an increasingly important part of their plan. Hatfield said, “These months of operating in survival mode have provided valuable insight into how organizations and people can truly move forward from this disruption and position themselves to navigate the future disruptions that are bound to occur.”
In May, the Labor Department reported that the Consumer Price Index (CPI) had risen from 8.3% in April to 8.6%. This report was particularly discouraging considering Americans had a reason for optimism that inflation levels had peaked.
The increase in costs has caused many individuals to seek supplemental income. As a result, more and more full-time workers are searching for additional ways to make ends meet. Gig work has been a flexible solution for many of these individuals, therefore adding to the growing pool of gig talent.
According to a recent survey of over 1,000 workers who turned to gig work during the last six months, 85% have recently increased or planned to increase their gig work—with 58% citing inflation as the primary reason for seeking more work.
Inflation has also driven businesses to look for opportunities to cut costs while still meeting labor demands. According to Gartner, hiring contingent workers allows HR leaders to access a larger pool of talent without the additional costs of recruiting, benefits, and training. This strategy has made gig workers an appealing alternative to traditional staffing.
Simply put, platforms are growing because demand is growing. “Freelancers seem to be everywhere now, and you’re not imagining it—about 70 million people in the U.S. freelance,” said David Ciccarelli, Founder and CEO of Voice.com. “With such a staggering statistic, it’s important for business leaders to start thinking about how to harness the immense talent available to them in the gig economy. Depending on your industry, the majority of the talent you need may already be out there waiting for you.”