Trends That Are Transforming The Gig Economy

The Gig Economy comprises independent and freelance workers and contractors who get paid for individual projects, rather than through a salary by a company. Firms pay for services as and when they need them, and then stop paying once the work is complete. The Gig Economy was once seen as fringe – outside of the bounds of the regular economy. But thanks to shifts in working practices, things are changing fast.

In fact, the recent survey conducted by the Upwork and Freelancer Union shows that freelance workforce has increased three times in past couple of years and it is expected that by 2027 most of the American workforce will become independent workers.

The question, therefore, is “what trends are driving this transformation in the gig economy?” Let’s take a look.

The Rise Of Remote Companies

In the past, companies assumed that employees could only work effectively in a central office. But thanks to new digital tools, some firms are now discovering that this is no longer the case, finding that they can operate without any physical office at all.

In 2014, the number of “remote firms” without offices numbered just 26, but within three years, that had risen more than six-fold to 170 according to online portal Flexjobs. These companies use a variety of digital tools and cloud-based software to facilitate communication between employees, allocate work and track workflow. The need for physical office space is diminishing.

Greater Use Of Freelancers

The global marketplace is a competitive place which has led companies of all sizes to use freelancers to bring their wage bills down. Freelancers provide businesses with much-needed services, as and when they need them. Often there’s no need to pay exorbitant salaries or even hire recruitment firms: companies can attract freelance workers through online platforms at low cost.

Whereas once freelance workers were seen as an essential pool of skill for small businesses, larger firms now recognize that they stand to benefit from the freelance revolution too. Recruiting from the Gig Economy helps with risk management: corporations can more easily control headcount in times of economic uncertainty, without having to go through the painful (and often expensive process) of making employees redundant.

Finally, companies benefit from the fact that the gig economy (combined with remote working) allows them to work with skilled people, anywhere in the world. Toptal, for instance, provides a global platform for companies to find freelancers and enables freelancers to sell their services to anyone, no matter where they are. The growth of Toptal is a testament to the success of its services.

Better Networking Among Freelancers

Not only are businesses benefiting from the gig economy, but freelancers are too. Thanks to the rise of freelance platforms, it’s now easier than ever for independent contractors and the freelance workforce to find leads, showcase their work, and share contacts with other gig workers. Because these platforms are making it easier for freelancers to find jobs, it is making getting into the sector more lucrative for all, fostering growth.