The Gig Economy and Pros/Cons of Freelancing
The term gig economy is a relatively new term to describe how large companies favor the hiring of short term laborers like freelancers, part timers, and temporary workers over the traditional full time employee. It has other names, such as frictionless economy and on-demand economy. In reality, large companies are following the gig economy model and undermining the traditional 9-5 full time employments. For younger graduates in developed nation, finding a full-time job may not be the only option for employment.
In the US, there are all types of professional freelance service works available on the job market. Employers from different industries can hire part time software development, IT, data analytics, engineering, designing, writing/translation, legal, customer service, sales/marketing, accounting, and consulting freelancers on their short term projects before terminating the employment afterward. Also, professionals who desire flexible schedules, wanted to have a part time gig after work, or don’t have a full time job choose tend to lean towards freelance job offers. In fact, there are companies and platforms dedicated to freelance work listings for established freelancers and employers; the trend has become this large.
Although the prospect seems grim, it makes a degree of sense. For example, when a company is looking for people to design their webpages, financially, it is better to hire some professional freelance web developers instead of going on full interview profess to hire a team of full time web developers, since web developing is a one-time job. The company don’t need the web developers after their webpage is done. Whenever the company want to rebuild their webpage years or months later, they could either contact the same team of web developers or look for a new team of developers. Financially, it is more economical to hire some temporary developers only when it is necessary over a hiring team of full time workers for a long period of time.
For freelancers, flexibility is the biggest benefit they can have. Like traditional plumbers and computer repairs work, they are their own employers and don’t need to dedicate themselves to any company; they only show up whenever someone need their services. They can work for anyone and only for that job position. Hence, they can be doing freelance works for two or three companies to have multiple sources of income. It's like being a sole-proprietary entrepreneur with their skills.
On the other hand, flexibility comes with a price. Financial instability is the biggest downside for freelancers and temporary workers. Freelancers need to have their own insurances while having less stable job security and source of income than their full time co-workers. In addition, competition of work among the freelancers can be intense. Freelancers have to go through the “look for new job, submit resume, and interview” process whenever their old freelancing contract is over. Therefore, it is possible for freelancers to have months of unemployment due to lack of demand on their services.
At the same time, it is often believed and criticized that large companies benefited from the gig economy the most. Unlike full time employees, temporary workers and freelancers usually do not receive employment benefits like health insurance, paid vacation, and bonuses from their employers as the law does not require so; after all, temporary workers are only there for a short period of time. Employers saved a lot of costs in employment benefit, and if left unchecked, the gig economy will face the danger of having a reputation of exploiting service workers in a new way.
In conclusion, the labor forces type in developed nations like the US are much more based on service than manufacturing. Thus, the gig economy is going to play an enormous part of the economy and job market. For those who are planning to be part of the gig economy as employees, understand service needs and the state of the economy in and of itself; one must need prepare for uncertainties in their career while embracing the flexibility.