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Gig, freelance, or piece worker: is this economy ‘new’?

Gig economyNOTE: The Doctor is taking the week off. In the meantime, here is a post from earlier this year that is – of course – still quite relevant. 

The gig economy is going to be ‘huuuge’, or so many speakers at the recent TAtech conference told us. It will comprise 40% (!) of the entire labor market…in 4 years. It will ‘change the face’ of employment. And yes – it will ‘revolutionize’ recruiting. (You just knew revolution was going to be in there somewhere, right?).

What exactly is the gig economy? As popularized by Uber, its most prominent employer, it is a way to money by doing ‘gigs’ – short bouts of independent work. You find out about the work – and are scheduled, etc. – via some sort of cloud-based software. You can be a driver, a delivery person, a dog walker – pretty much anything that someone else doesn’t want to do and is willing to pay you to do.

Sounds like a contractor without a contract, doesn’t it? You are a cog in a machine – not unlike many ‘regular’ jobs – but you must pay for your own health care, insurance, and so on. You are, in essence, your own employer and your own safety net.

Leaving aside the question of whether or not 40% of the workforce actually wants to live this way, the more interesting question for our industry is this: what about retention? If I had a nickel for every article outlining the many ways to retain workers, I would be a retired JobBoardDoctor. As we all know, employers want quality applicants, which means they want people that can do a job well – and stay. One of the ways employers lure employees to stay is through benefits and the promise of continued employment.

Why does an employer want an employee to stay? Simple – it lowers the cost of business and increases profitability. Instead of spending money constantly filling ever-emptying jobs (ask anyone in retail about this problem), you spend it on expanding your business. Instead of endless rounds of training and onboarding, your retained employees do their work well and predictably.

Of course, in the real world, it doesn’t always work out that way. But if specific people with specific skills make a difference for you as an employer, you do everything you can to retain them.

What does the gig economy focus on? The gig itself. The fact that a gig can be done by pretty much anyone, at anytime, ideally at the lowest price possible. It’s an equation in which the worker is simply not that important anymore. In a not-so-pleasant return to the past, it creates a new world of ‘piece workers’ who try to cobble together enough gigs to make a decent living – all the time knowing that they can be replaced at any time, for any reason. It also – and this is not surprising – exerts downward pressure on compensation. No matter if you are a highly skilled programmer or a college dropout with a car, once you start competing on a gig platform for work, you are also competing to do that work at the lowest possible price.

So there is definitely tension between the gig economy and the mainstream HR world. How will this tension be resolved?

Hey, don’t ask me! I just raised the question. The answer is up to you.

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