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Gig Economy

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    BBA V-C COURSE FACILITATOR: Ms. Shafaq Rubab Gig Economy   GROUP MEMBERS: MADEEHA DANISH (1611193) MURTUZA KHAN (1611205) Muhammad Ahmer Khan(1611) Faisal Janjua(1611) Date: __th December 2018   A gig economy is basically a free market system in which temporary positions and contracts are common and organizations contract or outsource short-term engagements and projects to independent workers. A gradual trend toward the development of gig economy has started. Between 2003 and 2013, all industry sectors experienced growth in non-employer businesses. A study by Intuit predicted that by 2020, around 40 percent of American workers would be independent contractors. There are a number of factors that influence the rise in contractual, short-term jobs. Firstly, the digital age has made the workforce extremely mobile and so work isn't limited to offices anymore which means job and location are not dependant on each other. Freelancers can now select a wide array of short-term jobs and projects all around the world, whereas, employers benefit from it by selecting specialized individuals for specific projects from a much larger pool, unrestricted by location. This is also due to rapid globalization as trade is not geographically restricted anymore and neither is employment. Digitization has also contributed directly to a reduction in available employment opportunities as technology replaces some types of work and ensures less time consumption which leads to people searching for alternative employment opportunities. Other influences include financial pressures on firms causing further staff redundancy. In a study, 37% of respondents mentioned they were helping to fill in gaps in their other sources of income while 30% mentioned they needed ways to earn money in their spare time so that it does not clash with their schedule. The entrance of the Millennial generation into the workforce has brought in a more diverse skill set and greater efficiency in the economy and they prefer doing work which offers them greater chances of growth and development which is why they keep switching jobs which further gives air to this trend. Currently, people tend to change jobs several times throughout their working lives which has turned into a sort of evolution known as the gig economy. A firm operating in a gig economy, would save costs and scarce resources with respect  to benefits, compensation, office space and training. They also have the leverage to contract with specialized experts for specific projects who might be too expensive to maintain as full time employees. From an employee's perspective, a gig economy can ameliorate work-life balance in their lives as compared to full time employment. Ideally, the model is powered by independent workers selecting jobs that they're actually interested in, instead of being forced into a position where, unable to attain employment, they pick up whatever temporary gigs they can land, i.e. gaining a temporary solution to unemployment. The gig economy is part of an evolving cultural and business environment that also includes the gift economy, the sharing economy and the barter economy. The drawbacks of Gig economy include challenges in finding a sense of identity as workers have numerous employers along with many different types of gigs. For example, it is not unusual for a freelance writer to also be an artist, part owner in a café, and be a dog walker on the side. This is rather difficult for traditionalists to understand, and so they often critique people who adopt this work style as immature, unfocused, and unable to find themselves. Moreover, the employment legislature is sort of murky as the new gig economy has raised several legal questions such as, when is a freelancer an independent contractor and when should he be considered as an employee of a firm that has hired him to do work. A common example is Uber since its drivers are considered as independent contractors, and yet the company determines their rate of pay. Their drivers are not eligible for any employment benefits. The real employment status of these gig workers is unclear, and state legislatures are struggling with this issue, which is why they are looking to introduce a new status of worker and define the parameters of the social safety net benefits that maybe offered to an employee. Another drawback would be the intense rise in competition and an oversupply of employment services due to more workers coming with a diverse skill set, there would  be a decline in wage rates which might put them in a financially difficult position. Payment issues in this type of economy are rather common as well since a large number of gig workers and freelancers get delayed or no pay for the work they do and face an unresponsive employer. The employees therefore has limited choices in these cases unless they have the funds and wherewithal to initiate legal proceedings. Further more, there are issues while deciding the method of payment as many employers and businesses often use methods that are more beneficial to them, rather than the gig worker. In case a freelancer decides to open a business in a gig economy, the hassles of running it are immense. He are a solopreneur and thus be solely responsible for marketing,   public relations, employment, and all of the accounting/finance aspects of running a  business. All of these activities are time consuming  –   and there would be an opportunity cost of the time spent away from work that actually generates revenue. And if he is not specialized or experienced enough in any of these areas, then he would have contract those business functions out, adding more cost. Efficient recruitment is a huge challenge for recruiters for they must actually be having access to a rather large database, and sufficient candidates, to be able to supply niche skill sets with required industry experience to effectively perform specialist roles. The gig economy can be applied on a wide array of roles, whether it is junior HR admin role or that of a highly skilled worker, developer and designer and marketer. It’s  also applicable at the top executive level in a business including but not limited to CFOs, CMOs, CTOs etc. They can be really effective on a gig basis as it’s  an opportunity for organizations to bring in intellectual property (IP) if the  business is lagging behind in a  particular area. People nowadays are seeking experiences and growth, and the need for stability is not so ingrained anymore. The move towards more temporary roles is also being driven by specialization. For example, twenty years ago,  professionals were generic as compared to these days, where there exists, more demand for specialist and niche skills. But companies cannot employ people with all the niche skills required, as they’d  just have too many people and would have to bear exorbitant costs. The rise of technology has majorly contributed to the evolvement of the gig economy. And with this, there is a similar change in all industries. The industries' that are most likely to offer project-based work  –   like tech or creative industries  –   are more conducive towards to the gig economy. Although the newly emerging gig economy is definitely something to be excited about in the future of the workplace, the recruitment sector will always be considered vital in

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Oct 7, 2019
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