Are you looking to get into the gig economy but are unsure of the benefits and drawbacks? Or even what it is? You're not alone. Understanding the gig economy isn't as straightforward as one would think. Especially since the definition seems to be changing daily. This article will explore the gig economy, the pros and cons, and how to thrive.
What Is the Gig Economy?
In Measuring the Gig Economy: Current Knowledge and Key Issues The National Bureau of Economic Research calls the gig economy an independent workforce that finds flexible jobs through an online platform. The global gig economy affects almost every type of position around the world. Typically, a gig economy does use technology platforms to connect temporary workers with project-based work for a set period.
Independent workers earn money by offering services needed for one-off jobs or contract work. Employers not wanting to hire a full-time employee or unable to find qualified labor, will hire these on-the-spot services, negating the necessary paperwork and the need to offer health insurance.
Yet, the convenience and ease of this ability can't be matched. In your hand is a job recruiter offering up work in seconds. You can even work full time and freelance on the side. Or choose between a few jobs without worrying about whether or not you made the right choice.
Everyone is talking about the gig economy because it's transformational for both independent workers and employers. It has created a new category of workers.
Why Is It Called the Gig Economy?
Understanding why it's called the gig economy may have more to do with the term 'gig' than anything else. If you look up 'gig' in the dictionary, it will probably say something like 'an individual job for a specified period'.
Sometimes, the gig economy is called the 'sharing economy' or 'collaborative economy' for app-based platforms that offer jobs to drive passengers, deliver food, clean homes, or cook food in a restaurant.
Since workers find jobs on online platforms most of the time, the gig economy is also called the 'platform economy.' Some online platforms, such as ShiftPixy, connect the restaurant gig workforce to the front of house and back of house positions in minutes. But it's vital to understand that not all gig workers use a 'gig platform' to find daily gigs.
What's a Gig Job?
A gig job in the sharing economy can be almost any type of work. Sometimes referred to as freelance jobs for both part-time and full-time workers.
If you're a virtual assistant, you can find a gig job. Or even even a part-time professor who wants to pick up an extra class. Some gig platforms even help skilled professionals in IT or management find ready work. Some of the more common types of gig jobs include:
Pros Of the Gig Economy
Food delivery specialist
Freelance writer or editor
Cook or chef
Personal care worker
Like any type of job or economy, there are definite pros and cons to diving into gig work. The benefits of the gig economy include flexibility, freedom, and fulfillment.
Flexibility Can't Be Matched
When you're an independent contractor, you're not required to clock in and out each day at the same place. In some cases, gig workers can choose to work anywhere at any time. Gig workers choose flexible jobs to have the schedule they desire.
If you want to work only Monday through Thursday and take a long weekend, you can. Or if you choose to work through the weekend for extra cash, gig workers have this option. As an independent worker, you can choose how many hours to work each day or even when to accept a job or not. This is one of the big reasons people choose this career path.
Freedom is Never Underrated
When you work a regular job, you may not have the freedom to make decisions, choose the hours you work, or what type of jobs you're willing to do. Gig jobs give you a myriad of personal choice in the palm of your hand.
You don't have to worry about getting along with the boss or even if the working conditions aren't ideal. The gig job has an expiration time and date. Gig work also gives you the freedom to try different positions, gain additional experience, and meet incredible people.
Fulfillment Brings Work-Life Balance
Traditional jobs can make you feel tied down and less fulfilled. Gig work gives you a work-life balance because you have the flexibility and freedom to be a part-time worker with full-time employment. If the job is gone tomorrow, another one will arrive. You're in the driver's seat.
Cons Of the Gig Economy
While the positive elements of being a gig employee can't be matched, there are cons of gig work, including job security, benefits, and juggling tasks.
Job Security May Be Lacking
A traditional employer usually can offer job security. While nothing is ever guaranteed when it comes to working, if you do a full-time job, it's typically long term and gives you a sense of stability. You more or less know what your monthly income will be, and you can budget accordingly. Gig jobs are one-off jobs that end the minute you clock out and can't provide the security that some workers desire.
Health Benefits and Vacation Time
Day jobs with traditional employers can offer health benefits and paid time off whereas gig work does not. Most of the time, you have to work a full-time job to receive full health benefits, workplace protections, and vacation time.
ShiftPixy is different from a lot of gig worker apps. The ShiftPixy gig platform does offer its gig workers some health benefits and workplace protections.
Always Searching For the Next Gig
Gig work means that you are always juggling multiple jobs at once. To be successful, you will need to learn how to plan ahead. So, you should always be planning your next gig - just when you accept one position, you should be looking for the next. This can become mentally exhausting and deplete your reserves quickly. If continually looking for the next gig isn't for you, gig work may not be ideal.
On a positive note, there is a solution to this problem. Connecting with an app like ShiftPixy makes gig searching easier. If you are serious about being part of the gig economy you can become a top-rated shifter by maintaining a good work ethic. The top-rated shifters get a steady supply of on-demand staffing opportunities.
How to Thrive
Thriving in the freelance economy is possible. It's hard to estimate the number of workers due to how employment data is collected, but if you're one of the millions participating in the gig economy, following these tips will help you be successful.
Prepare for Variable Income
When you're juggling multiple jobs, you may not know exactly how much money you'll make each month. One month your income soars, and then the next month it tanks. Unlike full-time employees, you have to plan for variable income over the long term. This can be tricky at first, but once you learn to stick to a budget, you can ride the ups and downs.
Save For a Rainy Day
Since your income may vary, you need to have a robust savings plan. The general rule of thumb is to save 15% of your gross pay. This can be challenging for some if your income is lower that month.
But if you have a rainy day or emergency fund, you can ride out dry spells or feel secure knowing you can pay your bills if the freelance jobs are lacking that month. And don't forget you still need to think about saving for retirement.
Remember to Pay Taxes
Independent contractors still have to think about paying taxes. You're required to make quarterly contributions to the IRS, and if you don't, you'll pay the entire amount plus a penalty when you do file your taxes.
The gig economy is transforming what being an employee means and creating an agile workforce with freedom, flexibility, and fulfillment. Thriving in this type of economy takes preparation, planning, and saving. Millions are making it work, and so can you. Join ShiftPixy to discover how.
What is a Gig?
What is a Gig Worker?