The Gig Economy: Navigating the Pros and Cons of Short-Term Employment

Although there has been a shift in the way people work over the last decade, there is no doubt that the pandemic brought about an even more drastic change. Gone are the days where people head into an office Monday through Friday to work nine to five. Many companies have more flexible scheduling and allow their employees to do hybrid or remote work, meaning they do some or all of their work from home. And as more and more businesses turn to freelancers and independent contractors rather than hire full-time employees to complete certain jobs and tasks, the gig economy has grown exponentially over the last few years.

What is a gig economy?

A gig economy refers to the portion of the labor market that is made up of temporary and part-time positions, usually filled by freelancers and independent contractors rather than permanent, full-time employees. According to research compiled by TeamStage, the gig economy is growing three times faster than the total United States workforce, with 57.3 million Americans participating in gig work. At 36% of workers, that’s over one-third of the workforce that is doing some type of gig work. While many people use gig work as a way to supplement their income, 15.8 million workers have made it their full-time job. Gig work related to rides, delivery, and shopping services have become more popular, but some of the largest and fastest growing freelance services are more knowledge-intensive or creative in nature. Some of the more popular gig work platforms include Airbnb, Upwork, Fiverr, TaskRabbit, Uber, Lyft, DoorDash, and Instacart. However, gig work can be found in a number of other places, and many staffing and recruiting agencies connect individuals with employers looking for contract workers, positions that can sometimes turn into more permanent work.

Why has gig work become so popular?

Technology has made it easier than ever for companies and individuals to connect with gig workers and the variety of services they can offer. People are no longer limited by their geographic region, as many of the different types of gig work can be done from anywhere in the world. It’s cheaper for companies to hire freelancers or independent contractors because they don’t have to pay for a regular salary, employee benefits, or overhead costs. It also allows them to choose from a much wider talent pool and gives them more flexibility to only hire for a project or task rather than taking on a full-time employee.

What are the pros and cons of being a gig worker?

There are different reasons why people choose to be a gig economy worker, and there are both advantages and disadvantages to this kind of work.

Pros:

• Flexibility: One of the biggest draws for many people is the flexibility of gig work. They get to choose the jobs they want to take, when they want to work, and how much they want to work. This is extremely beneficial for parents with young children, caregivers, students, or individuals with health problems. It is also more convenient for those who are using gig work as a way to supplement their income because they can still work their full-time job and pick up extra work when it fits into their schedule. Many times, people can work remotely from the comfort of their home, or at the very least, pick the geographic location they want to service. This type of flexibility is great for people who prefer to travel around rather than being stuck in an office setting.

• Variety: Because gig work is often temporary or short-term, it is constantly changing. The types of people, companies, topics, and tasks can vary from week to week, or even hour-to-hour, which can help keep the work from feeling redundant.

• Independence: Freelancers and independent contractors typically get to be their own boss. They don’t have to answer to a manager or executive but instead get to make decisions for themself and do their work on their own terms. They can set their own rates and choose the work they want to do.

Cons:

• Unpredictable income: With gig work, there is no steady paycheck to rely on every month. Pay is based on the jobs worked, which means that income could vary quite a bit. This makes it harder to budget and could be stressful for some.

• No benefits: While some gig work platforms may offer health insurance, the majority of gig workers are on their own. It’s their responsibility to find and pay for insurance and save for retirement.

• Taxes: Another responsibility that gig workers incur is keeping track of their taxes. As they are considered self-employed, nothing is withheld, so they are accountable for making sure they have the money to pay taxes when the time comes.

For some people, the benefits outweigh the negatives, making a gig economy a good fit. However, for others, the stress of not having regular work or a steady income can overshadow the positive aspects, so a contract-to-hire job might be the way to go. It is important to consider the pros and cons of the different types of work and make the best choice for you.