When you think of the American workforce, your mind might conjure images of corporate America or traditional jobs that make daily events run smoothly like mail carriers, sanitation workers and restaurant wait staff. But what if we told you nearly 39% of the total American workforce is now made up of freelance and gig workers?
Coined the “Gig Economy,” these workers are a rapidly rising category in labor statistics, picking up jobs on an as-available and as-needed basis. Gig work runs the spectrum from Uber drivers and Instacart shoppers to dog walkers and painters, but also includes providers of professional services such as photographers, copywriters, web developers and bookkeepers.
The growth of the Gig economy is expected to continue, and will keep transforming the very nature of our workforce. The last decade in the United States has seen increased trends toward on-demand consumerism, with delivery services for everything from meals to groceries to prescription drugs and rideshare becoming a preferred method of transportation. In 2020, when COVID-19 hit, the demand for on-the-spot delivery increased exponentially, and many businesses shifted their models to offer delivery services for the very first time. This reality rapidly grew the need for on-demand workers.
While many choose gig work for the freedom and flexibility, others utilize these employment opportunities as a means of increasing income through part-time work or “side hustles,” turning a hobby into a paying gig. This trend of turning to gig work as a means to increase or supplement income was accelerated by the COVID-19 Pandemic which left many people without employment. They turned to gig work, looking for new ways of working or capitalizing on existing skills, which helped some close income gaps from job losses or a reduction of hours.
Impact on Traditional Employment
Businesses are also shifting the way they hire employees, in part due to the rise of skilled freelancers and gig platforms. In the midst of a labor shortage, large companies are, some for the first time, looking to hire gig workers to fulfill jobs that used to be filled by full-time staff. This trend could continue, as companies have an opportunity to hire for specific skill sets or short timelines and potentially save on things like equipment, training, benefits and licensing. On the flip side, many young people entering the workforce as gig workers and freelancers are unwilling to sacrifice flexibility or commit to traditional employment.
Impact on How Workers get Paid
With more and more Americans partaking in some kind of independent work, we’re seeing wide-scale shifts in how workers are getting paid. The concept of early access to earned wages, a service that allows workers to receive a portion or all of their accrued pay ahead of traditional two-week pay cycles, is wildly popular among gig workers and has even become the norm for how some large gig platforms pay workers. The convenience of early wage access is now trending beyond gig, with many people using third-party services to request early wage access from their employer and beginning to create change within traditional workplace payment options.
New Businesses are Emerging to Support Gig
Beyond payments, many new businesses have emerged to support gig workers’ unique needs. Online marketplaces such as Jobble and Upwork serve as a place for employers to find skilled workers while allowing workers to bid on posted jobs and more easily market themselves. Once workers find their gig, they often face challenges that come with not having a full-time employer, including finding insurance benefits, time management, expense tracking, tax reporting, and planning for the future. One organization looking to solve for these kinds of challenges is Stride, who recently partnered with Mastercard to deliver “Portable Benefits” through the financial services industry, helping independent workers more easily and affordably self-insure and maintain their insurance coverage from job to job. Gig workers enjoy freedom and flexibility in their work, and with more resources available, security and financial stability are also in reach.
The American Workforce is Shifting
Gig work has become mainstream, and traditional employers are reevaluating how they attract, hire and retain workers, giving more consideration to the freedom and flexibility many people have grown accustomed to. How workers get paid, when and where they work, and how they secure and maintain financial stability continue to rapidly evolve. The trends, flexibility, and demands of the gig economy are leading the way for this transformation, while employers adapt, adjusting benefits, hours and even employment structures.
