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How employers can tap into the benefits of the gig economy

Posted by Neha De

October 29, 2021    |     5-minute read (855 words)

According to the World Bank’s World Development Report 2019, the future job market will be dominated predominantly by odd jobs instead of full-time ones, indicating new trends in the global labor market. As is the case, a large section of the workforce is now entering into the so-called “gig economy” and identify as independent. 

The majority of U.S. employees will be freelancing by 2027, reveals a report released by the Freelancers Union. As a result, gig workers, freelancers and remote employees are changing the way organizations conduct. In fact, according to a recent study by Buffer, “90% of remote workers plan on working remotely for the rest of their careers.” This shows that a number of companies are recognizing the benefits of the gig economy and using it to their advantage.

Here are three benefits of embracing the gig economy: 

  1. Helps save costs: Research shows that businesses can save up to 60% on costs by using gig workers. Benefits, such as insurance and paid vacation time, amount to more than 30% of an employee’s compensation. And by hiring freelancers, businesses can save a staggering amount of money annually (since they don’t have to pay freelancers such benefits) and instead reinvest it in their business.

  2. Then, companies can save money on infrastructure since they do not have to maintain an office space, computers and other office essentials for gig workers. 
  1. Allows smoother onboarding: Effective onboarding programs can improve employee retention by 25%, studies show. However, according to HR Onboard, “For your average small to medium business onboarding 100 new employees each year, onboarding can cost upwards of $40,000 per year (or $400 per employee.) That’s just onboarding, not including recruitment or training costs.” 

  2. This is another reason to embrace gig workers. Working with freelancers implies faster onboarding and a faster way to hire outside resources.

    Working with gig workers also allows companies to try out prospective (full-time) employees. Instead of going through time-consuming and expensive hiring processes, businesses can hire based on actual work done. 
  1. Seasonal help: According to Ernst and Young, “Contingent workers help employers control labor costs, and respond to the peaks and troughs in demand that come with seasonal trends.” Their Contingent Workforce Study reveals, “56% of organizations are using gig workers to complete projects where the specific expertise is beyond the capability of the existing workforce.” 

  2. The report also suggests that “organizations are using contingent workers to overcome resistance to change within legacy workforces. A contingent workforce can help drive and accelerate change. It can also support rapid scale-ups in business models where dramatic growth can occur overnight. Given the extraordinary pace of technology change, contingent workers provide a critical bridge to integrating new products, services, technology and more into operations, without having to expand full-time equivalent headcount.” 
How to maximize the output received from gig workers

Take a look at four ways a business can tap into the benefits of the gig economy:

  1. Learn about the different types of gig workers: Gig workers are not just freelancers; contract-based and part-time workers are also a part of the gig economy. And, everyone has a different style of working. While freelancers tend to be available most of the time, part-time employees may or may not visit your office and contract workers usually allocate specific time slots to businesses. Hence, it is imperative that you understand the different types of gig workers available to get the job done.

  2. Have a clear goal: Often, companies are not sure about what exactly they want from the freelancer. Therefore, before approaching them, ensure to draw up a list of the things that you expect from the gig worker in order to establish specific timelines and bring about expected outcomes. This list can also be used as a tool to measure their performance for you to decide if you should continue working with them.

  3. Establish clear lines of communication: One of the main reasons why employers are unable to make the most of the gig economy is that they are not able to communicate appropriately — sometimes, the gig worker has to communicate with several people in one organization for follow ups or to get approvals, which causes unnecessary delays. And since most gig workers work with multiple clients, they may not always want to work with a company that makes things complicated for them. 
  4. The most efficient way to get around this is by appointing one or two people to deal with a gig worker, so that the processes can be made more streamlined.  
  1. Look at it as a partnership: When you hire a contingent worker, look at the arrangement as a partnership instead of just assigned work. Most gig workers work with several different clients, and are often full of ideas and can offer you valuable feedback. 
Also, even though most contingent workers love their independence, they may be open to greater commitments with the right company. And working with freelancers is a great way to try out people, not just in terms of the quality of their work, but also culture fit and chemistry, before adding them to your staff.

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