The Gig Economy Workforce Could Double in Four Years

The number of on-demand workers in the U.S. is expected to nearly double in the next four years a recent study has highlighted. That would bring the total gig economy workforce up to 9.2 million by 2021. Another study by LinkedIn predicts that by the year 2020, 43% of the U.S. workforce will be made up of workers who freelance. Even the Labor Department has acknowledged that as the freelance economy has boomed, they will need to account for gig workers in their figures by next May.

It’s clear that the rise in on-demand workers is in part driven by the growth of digital start-ups such as Airbnb, Uber and TaskRabbit and advancements in technology in general, but who is really driving this move? Are employers dictating the rules so they can make greater profits by limiting employee benefits and job security? Or do employees really want maximum flexibility and are willing to give up some rights for it?

Most gig workers choose the freelance lifestyle for the better work-life balance that it provides as they can control their own schedule. For the workers who do it by choice, a recent report₃ by McKinsey Global Institute, a consulting firm, found they report being happier than workers in the traditional 9 to 5 economy. “People value the autonomy, the independence, being your own boss,” says Susan Lund, research director at McKinsey. However, the report conducted by McKinsey also found that nearly 20 million of them do it out of necessity because they can’t find better work or pay.

For employers the move towards a gig economy offers the clear benefit of only employing workers when needed, ensuring vast cost savings when compared to hiring permanent. Output based pay results in only paying for what you need, when you need it, and there are the added benefits of not having to pay sick or holiday pay or having to offer expensive benefits such as pensions and healthcare.

It is very clear that the move towards a gig economy is not going to slow down and the need for individuals and businesses to easily adapt is paramount. For the next few years it really is going to be a learning game for all those involved.