Send your questions about Gig Work or the Gig Economy to the Gig Doctor using the Contact Form
Tracey Smith asks the Gig Doctor:Do you think that HRIS vendors will be adding contingent worker capability to their products to allow companies to more easily track their entire workforce (employees + temps + freelancers)? Most currently track employees and temps but the freelancer/gig portion is missing and the onboarding of freelance talent is very slow. The purpose of the contingent side of the workforce is to be able to flex the size of the workforce up or down quickly in response to business needs.
Gig Doctor:Good question Tracey. According to Andrew Karpie @ "Spend Matters", some CHRO are waking up to the need for an integrated VMS to capture all costs associated with labor spend. Enterprise SaaS providers like SAP are either acquiring VMS providers like FieldGlass or attempting to add the capabilities internally. Because the economy has rebound so quickly and recruiting methods are many and more successful, many CHROs are still holding out to find the needle in the haystack for an exact match of talent companies require which delays acceptance of the independent worker market and value. Thus, impacting the perceived need for measurement tool like VMS to be acquired, integrated and made available for analytical use. This is a short answer to a perplexing issue for both freelancers and users of temp, freelancers, and independents. For more information, read the articles below.
"Hey Doc, give us the rundown on the current trend and status of gig work in America"
Working as an independent data communications network consultant in Colorado in the late 90s, an IT director for a federal government agency asked me what type of "gigs" I did? To be honest, I wasn't quite sure what he was asking. After some clarification, I got it. I was not employed by anyone, unattached to any long-term contract and I was literally fulfilling one project/contract at a time using only my acquired skills and knowledge. Sometimes known as a one-man shop, I was engaging in a form of work as a means of making a living. This market has emerged as a component of our economy which reportedly generates over $1 trillion in annual revenues from over 40 million Americans working as independents or freelancers (see DATA POINTS below).
Unlike young Uber drivers today, there is no doubt many engaged in the entertainment business - actors, dancers, singers, musicians, stage and property handlers, etc. - have always known the meaning of having a "gig" or not having a "gig". Mostly in the creative art fields, a "gig" is the meaning of having a job or project or not. It is how income is earned to support themselves and their families. Many like the flexibility of work on their own terms, but knew the risks of being without a "gig" - no unemployment benefits, usually no social security contributions and taking time to market one's self to obtain the next gig . . . or find a regular job. Many have opted for the independent work style, but more are now realizing that "gigs" may be the available alternative for the skills they can provide down the road.
Available advanced skills of human capital continue to shrink dramatically. A flood of new technologies has increased the ability of employers to automate more and more processes. The causal disruption creates fewer and fewer jobs for the average working person -- unlike disruptions from the 20th century. More and more people are doing their work in an arrangement other than the traditional roles of the employee-employer model. A move to a different kind of work relationship has profound implications for every aspect of life and family. Stress and fear can add a new dimension to "work" when healthcare and retirement benefits are up to the independent contractor to provide for him/herself and family.
I have been consulting as a freelancer and entrepreneur off and on for 30 years. I have lived through this tectonic shift in which companies are now more interested in finding the best person with the new skills they require for the job than just the best person they can find nearby.
Employers also no longer want to absorb the cost of "bench strength". Having a Babe Ruth or Jim Brown seating on the bench waiting for their talent to be called upon is no longer good business practice. We have a world of work that is far less constrained by geography and language. As more low skills task jobs become automated, we have a growing population unable to obtain the education and skills needed to find meaningful employment. And, many retiring baby boom generation retirees (a population equal to the 19th nation on this planet) are seeking ways to supplement they're a shaky retirement income. Many will seek gigs available in the Gig Economy if they have a talent that is in demand.
According to a recent report from Thumbtack, an online marketplace connecting people to local services providers, the current gig economy is not sustainable and will no longer exist in 20 years, as its focus is on low-skilled positions that can only serve supplemental income for workers and will likely become automated over time. You can already order food online and many fast food chains will follow McDonald's lead installing touch screens to order your food instead of a real person.
What will be around at the end of those two decades is truly skilled professionals that can offer specific services as well as performance-based marketplaces that can connect people to these highly-skilled independent workers, according to Thumbtack.
DATA POINTS: MBO Partners "State of Independence Report" is the industries longest running comprehensive study of the American independent workforce which was initiated in 2010. By their data collection and analysis, the total number of self-employed (independent) American's age 21 and up rose to 40.9 Million in 2017, up 2.8% over 2016. Sixteen million of those say they are full-time independents working at least 15 hours a week and an average of 35 hrs. per week.
Nearly 12 million describe themselves as part-time independents working less than 15 hours weekly and an average of 11 hours per week. Almost 13 million describe themselves as occasional independents. Other demographic data indicate 53% are men and 47% are women. Of the 40.9 million independents, generationally 38% are Millennials, 27% Gen Xers, 35% are from the baby boom and traditional cohorts. The shocking number is that they produced $1.2 trillion of the USA economy or 6% of GDP in 2016. Reading the study results from 2018 versus 2017 may see some trend lines change a bit.
Regardless of how the gig economy is portrayed, it is clear something is going on beyond the buzzwords, something that is beginning to matter to all facets of work/life in America. Some of the facts are very clear. Our low birth rates, the decline in labor force growth, slower growth in middle working class jobs and increasing jobs automation will soon begin to present new challenges in how work will be accomplished.
Got a question about working in the Gig Economy or how one can succeed as a freelancer, use the contact form to send me your question, concern or comment.