Permanent full-time employment is slowly disappearing and being replaced by contract work and short-term assignments in the US. Since there’s a term for everything today, this trend of professionals who work as contractors, freelancers, and part-timers in start ups and the enterprise is called the gig economy. Think Lyft, TaskRabbit and Airbnb.
Despite some of the news on the downside of the gig economy, it’s bigger than you think it is. How big? Intuit and Emergent Research says the gig economy is around 34 percent of the workforce in 2017 and is expected to increase to 43 percent by 2020. Cumulatively, we’re looking at 9.2 million Americans projected to work in the gig economy by 2021.
To put the new gig economy into perspective, there are more gig workers than people employed in publishing telecommunications and data processing and IT services combined according to the Bureau of Labor Statistics.
On-demand jobs will surpass the current number of jobs in finance (8.4 million) or construction (6.8 million) by the end of 2017.
The new gig economy
In the past several months, there’s been a stream of new gig economy companies launching new services or large corporations. The era of the gig economy, or augmented workforce, and the enterprise has started. For example, Gigwalk, which helps consumer brands identify and fix channel execution issues using a network of experts, launched a program with Deloitte to target the large corporate sector.
Because large tech companies like IBM, GE, and Apple are under constant pressure to deliver innovative products to the market with better margins, the gig economy has evolved beyond startups in the on-demand world and rapidly moved into the enterprise. Gig talent brings something that large corporations struggle with — a flexible and agile talent pool that’s ahead of the curve in new and emerging technology.
Why is this important? The number of professionals who work in an agile way continues to grow and is predicted to make up a significant percentage of the workforce in the future. The enterprise that uses gig positions can onboard new talent and off-board unneeded skills without the burden of employment taxes and paperwork.
This makes the enterprise agiler. Because they can hire professionals faster for gigs that require exceptional technical expertise on emerging technology, it requires fewer approvals from internal managers and HR.
The gig economy serves as a springboard for innovation with the possibility to help companies deliver unique solutions. And, through collaboration with gig workers, there is an increased potential to provide unique solutions at the same time, create innovation within the enterprise.
A company facing an in-house technical skills shortage will increase their reliance on networked professional service firms to source specialized independent talent to tackle business challenges. A great example is PWC which recently launched Talent Exchange that matches independent consultants to client projects.
The number of senior-level independent consultants will continue to grow. An increase in the number of in-house professionals with fragmented skill-sets as a result of rapid technological changes is putting pressure on companies to tap into highly specialized talent that has made an active decision to operate in the independent consulting marketplace instead of at traditional firms.
The new gig economy is about augmentation through a diverse talent pool and companies are looking to networked consultancies to give them access to a wide variety of emerging tech and digital skill sets to support their future growth and ongoing digital transformation.