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Why Companies Should Take Advantage of the Gig Economy

As the labor market is veering away from the staple 9 to 5 jobs we have all come to know, modern companies can benefit from the flexibility and efficiency the growing gig economy can offer.

Over 56.7 million Americans were engaged in the gig economy last year and they will likely comprise of more than half of the labor force by 2024. With this shift taking many skilled workers out of the office, responding to this trend is imperative for businesses.

Here are 3 reasons why you should take advantage of this shift and some of the challenges that come with employing freelancers:

It is Cost-Efficient

Highly competitive job markets mean lower costs for better services. Freelancers are highly skilled professionals at the fraction of a cost of full-time employees. Not because they necessarily work for lower hourly rates, but you pay them purely for their output. A study done by EY Global discovered that 2 in 3 large size companies hire freelancers to drive down labor costs. They also cutback on other incurred costs of permanent employees like insurance and bonuses. Not to mention the cost of all the overhead expenses your company can save on.

Flexible Pool of Employees

With technology rapidly evolving, training employees to keep up with the latest trends can be both time and resource consuming – especially for projects that require highly specialized skills. A lot of freelancers are at the top of their fields and are taking it upon themselves to constantly improve their craft. In their latest quarterly statistical report, freelancing platform Upwork reported that 17 of the top 20 hottest freelance jobs in the market are tech-related. These top skills included experience in Hadoop and Dropbox API (number 1 and 2 respectively). Freelancers also offer companies a lot more flexibility when it comes to hiring. US-based company Yoss states that freelancers can fill gaps immediately within an organization, particularly in tech roles where the business may have a skills shortage. This reduces the chances of companies delaying projects while they train their regular employees.

Access to diverse skills and expertise across the world

Freelancing platforms are breaking down borders and giving companies unprecedented access to a globalized labor force. In an interview with Business News Daily, Satya Kothimangalam of ZAG Studios said that leveraging gig labor gives companies the ability to work with multiple and specialized freelancers across the world. He also said that hiring people from different time zones can ensure your project is being worked on around the clock.

Maximizing the Lead

As the gig economy is still developing, there remain some challenges that executive managers need to overcome to fully take advantage of its progress. A poll published on Harvard Business Review reveals that as many as two out of three people who work remotely are not engaged in their work. Managers can mitigate this lack of investment with the company by creating regular feedback mechanisms and making them part of the team.

There’s also a considerable integration curve when incorporating freelancers into your business model, including creating work outlines, teaching them proprietary tools, and vetting mechanisms among others. Luckily, this can be minimized through developing your business model to accommodate contract workers seamlessly.