There are good things in store for the gig economy in the next decade. Here is the third and final installment of our take on the gig economy so far. Here we look at the prospects of the gig economy and understand how its growth can be leveraged by start-ups and business owners to scale up their operations. We will look at the trends in the freelance market right now to help business owners plan their businesses’ growth curves to use the gig economy to their advantage.
Trends Observed in the Gig Economy
1. Freelancer earnings have seen up to 50 percent growth in terms of hourly rates in the last couple of years. Clients are ready to pay at higher rates hence there is more trust in the competence of freelancers. The higher it goes the gig economy is expected to contribute more to the GDP of countries. Commission rates are being lowered on most platforms to attract freelancers into earning more. Marketplaces in India such as Gig4U have one of the lowest commission rates to encourage the growth of the gig economy.
2. With small and medium-sized businesses relying a lot on freelancers, the workforce of some organizations and countries is expected to consist more of freelancers than full-time employees by 2030. The expected engagement of freelancers in online platforms alone is expected to touch 500 million by 2030.
3. Payment issues in certain cases are being resolved thanks to more platforms supporting popular international gateways like PayPal and Payoneer. There is scope to concentrate on work than run behind invoices and payments. These gateways now provide Foreign Inward Remittance Certificates or FIRCs required by some freelancers from certain countries to assist them to comply with tax norms in their countries.
4. Lack of willingness to return to work and lack of a hybrid work model has forced professionals into looking for different careers and jobs with high satisfaction quotient. Many have turned to freelance full time enriching the already strong global freelance workforce.
5. Ecosystem development is pushing the gig economy forward thanks to more demand than the available supply of freelancers. Freelance businesses support freelancers in improving their skills and educating them on how to build better careers in the freelancing business. It is known for long-term freelancing client relationships. There are more streamlined and purpose-driven platforms to enable the multi-faceted growth of the freelance-powered gig economy.
These are just a few of the trends that have been observed that are promising enough for businesses and start-ups to think better of freelancers and the gig economy than they think now. The gig economy is a flexible solution for a business that owners can tap into for scalability. There are scopes to operate 24/7 in comparison to the regular corporate culture that has a fixed 9–5 schedule and weighs down heavily on the work-life balance of the employees causing them to affect attrition rates.
The Future of the Gig Economy and its Impact on Businesses
With steady projected growth, the gig economy is expected to contribute more than 50 percent of revenues of the world's GDP in about a decade. The pandemic has taught lessons to businesses and start-ups to farm out workloads to enable business continuity for times similar to this. They will now aim for as much remote-based operation as possible which in turn would contribute more to the growth of the gig economy.
Right now 35–40 percent of the regular workforce at corporates freelance in their free time. In about 5 years a huge chunk of the workforce is expected to choose self-employment on a full-time basis and the ‘good’ employees who will choose to stay back would probably have a side gig for extra income. There is much conviction to this as global inflation rates are galloping and appraisal percentages are being reduced causing a double-whammy effect on the employee. They are bound to give in and move out. Hence, businesses would do good to prepare themselves for a mass outflux and start an early adaptation process of working with contractors and freelancers.
The gig economy is the next big thing that is going to disrupt the mainstream work culture of the world. There are a host of developments ongoing as you read this. Upcoming financial infrastructure to support the gig economy, more funding for platforms combined with an unwillingness of employees to return to 9–5 jobs, and most importantly the endurance of huge corporates in the pandemic period with the remote working models has triggered the need to change. Change in how businesses need to function in the near future to be more profitable and how to hire resources efficiently for maximum output with the least costs involved.
Conclusion
We conclude our three-part series with a statement, “The gig economy is here to stay”.
While the mainstream economy might see it as the cat that needs to be billed or an elephant in the room that must be dealt with, in reality, it is a requirement born out of the need for alternatives. The gig economy is here to contribute to the growth of economies all around the world and in turn, improve the happiness index of workforces around the world. Just like AI cannot obliterate manual labor completely, the gig economy too cannot fully replace the conventional employment system. It is here as an option to equip businesses and start-ups to flourish better.
