The Gig Economy is Causing Rapid Expansion. What does this mean for worker’s money?

For some time now, traditional workplaces have been witnessing some major shifts. A new way of working has come to life called the gig economy, which is also known as on-demand or sharing economy.  Research suggests 56% of gig economy workers say they use gig employment to supplement their primary source of income. 

Employees are working from remote locations more than they did at the office, and businesses have unprecedented access to global talent. While the gig economy allows for flexibility and autonomy, it also raises concerns about job security, income stability, and benefits. Keep reading to find out more about the gig economy, how it operates, and its effect on freelancers.

What is the Gig Economy?

As the digital age arises, the current workforce is increasingly mobile and able to work from anywhere. This has been identified as one of the crucial drivers of gig economy growth during this decade. It gives us a new generation with more choices. The gig economy is a global trend where gigs, contracts, and casual jobs are replacing permanent full-time employment. Some common examples of gig workers include freelancers, online tutors, digital marketers, web designers, and cyber security experts, among others. 

Examples of gigs include Uber drivers (on-demand labour platforms), restaurant delivery couriers, software developers, or freelance writers.

In the gig economy, temporary, flexible work is popular, and businesses prefer to engage independent contractors and freelancers over permanent employees. The gig economy has existed since businesses began hiring temporary or seasonal employees. One advantage of a gig economy is that employees can take lower-intensity jobs as they acquire skills needed for in-demand areas.

How Does the Gig Economy Work?

Several factors have facilitated an increase in gig work recently. The two most important causes are:

• Increase in labour mobility

• Growth in remote work through digital platforms

In turn, employment has become more globalized over time. Gig workers can work anywhere worldwide for their employers, while companies can pick from a larger pool of skills than are available locally for any given job.

Companies equally seek freelancers and contractors because they have the same advantage since the work nature is temporary and flexible in this type of economy.

Gig Economy’s Growth

It is worth it for individuals working in the gig economy. According to research, 79% of gig economy workers are happier than they had been while engaged in conventional employment. Technology plays a part in creating this shift, and personal preferences also do, while economic circumstances alter.

Job applications and websites make it easy for gigs to be identified. Most individuals would prefer having control over their working hours and days. The gig economy encompasses various sectors, not just some industries, such as transportation, technology, health care, and many more.

Why the Gig Economy is Beneficial

Engaging in a gig economy offers many advantages for both the employee and employer. An employer can easily access the different kinds of talents they want. In case the talent proves otherwise, there are no strings attached to retaining the worker or dealing with termination issues. Furthermore, it is not easy to attract full-time workers anymore because employers can opt for the gig economy.

Additionally, hiring gig workers does not require firms to pay for health insurance and other benefits. Employees, on their part, will enjoy multiple jobs, some of which may require them to work at specific places and freedom; thus, flexibility in daily routine would be characteristic of this era.

Financial Implications for Gig Workers

This is how the gig economy affects freelancers, contractors, and gig workers in terms of money.

• Financial problems occasionally occur in their lives. When they do not have health insurance plans or paid leave vacations, these employees may sometimes face financial difficulties. This makes it difficult for them to anticipate future financial conditions.

• Positive Financial Aspects: Thus they can earn more compared to the past by choosing to work some extra hours on certain days only.

• Strategies for Financial Management: The following must be practised by a good gig worker:

• A sound budgeting plan that accommodates fluctuating incomes

• Keeping aside monies earned for taxes without waiting until when there will be surprises at year-end

• Proactive about retirement because there are no employer-sponsored retirement plans

• Resources that aid freelancers in dealing with such issues will keep them stable and growing.

Conclusion

Generally, the gig economy modifies our work. Additionally, since its cons offset its advantages, those in the gig economy should also be prepared for this. Smart money management, learning, and asking for a better working environment are strategies that benefit all participants in the gig labour market. These changes need to be embraced and collectively worked on so that we can improve the entire gig economy together.