The Millennial Digital Gig Economy
The shift in consumer behavior from ownership to sharing has produced a similar effect for corporations who are increasingly engaging “consultants”, “contractual”, “seasonal” and “freelance” workers on a temporary basis rather than hiring employees with a long-term connection to a particular business.
Although interim and temp hiring has been a staple of blue-collar and service industries for years, the growth of this phenomenon in white collar fields such as law, engineering and accounting is rising and notable. Research by Intuit predicts that by 2020, 43% of all workers in the U.S. will be contingent, or part of the “gig” economy – in large part due to digitization. As workforces become increasingly mobile and work can be completed from anywhere, the decoupling of job and location has meant that gig workers and employers can select amongst a vast pool to find the perfect fit in the nick of time.
The gig economy is defined as an environment in which temporary positions are common and organizations contract with independent workers for short-term engagements. The Intuit study estimates that these jobs will grow from 3.2 million in 2016, to more than 7 million by 2020. Contract workers contribute more than $700 billion to the U.S. economy and 10 out of the 50 startups on Forbes’ Hottest Startups of 2015 list are part of the gig economy, with a collective valuation of $78 billion. The gig economy already is, and promises to be, the employer of the future.
Not surprisingly, the majority of individuals involved in the gig economy are Millennials (39%) – who typically like to control decisions about where, when and how they work. In fact, one of the biggest advantages of the gig economy is that it can improve work-life balance over traditional jobs, since workers can pursue more meaningful and independent lives and businesses can access the exact right skills and people they need just-in-time. These on-demand jobs are creating a nimbler economy that is potentially more innovative, more competitive, and better able to deal with the fluctuations of global markets.
The gig economy however, does present some challenges. Freedom and flexibility don’t come with the traditional full-time perks such as healthcare and retirement savings. Critics of the gig economy cite the “disposable” and “replaceable” nature of workers who are far cheaper for employers since they do not qualify for benefits and are technically not their responsibility.
But socially-minded Millennials – the creators and workers of the gig economy, are working to change those conditions. The Good Work movement is a gathering of companies pledging to deliver the protections and benefits that gig companies typically do not offer. As governments struggle to re-classify workers and create policies that will provide gig workers with paid vacation and career development, The Good Work movement aspires to lead the changes in the field by inviting companies to create scalable solutions which address the gig economy’s current challenges.
At DU, we have the pulse of the drivers of the gig economy – millennials and digitization and look forward to working with you on creating gig economy 2.0!
Maggie & Hector