It’s all sweet in the ‘Gig Economy’. These are the findings of a recent EY report, ‘Is the gig economy a fleeting fad, or an enduring legacy?’. Also known as ‘the contingent workforce’, the Gig Economy is where businesses contract talent on a short-term project or even a daily basis to deliver their services and expertise.
The practice is not new. What’s changed is the scale – largely prompted by the focus on costs control following the 2008 GFC/Recession. Businesses love the savings of only paying for what they need when they need it, rather than carrying the costs of full time employees. With many former corporate workers, freelancers and consultants seeking greater variety and flexibility, there is a ready, able and willing supply of experts on tap.
EY Report key findings:
50% of organizations have seen an increase in their use of contingent workers over the last five years
By 2020, almost one in five US workers will be contingent — the equivalent of 31 million people
55% see contingent workers as helping to control labour costs
50% believe contingent workers can help to overcome resistance to change within the legacy workforce
42% are using contingent workers to respond to seasonal workforce requirements
Inevitably, the rise of the Gigger has seen a steady decrease in full time jobs. Even Australia, which boasts a low headline unemployment rate of 5.9% (Jan 2017, ABS), is experiencing a decline in full time jobs (down 40,000 yr/yr, ABS). It’s not hard to see why. Giggers are not only flexible, compared to full time workers, they’re cheap! They don’t attract super contributions, sick pay or annual leave. With the true cost of a full-time employee estimated at 136% of their salary, you can see the attraction. Great talent on tap at the right price.
Everyone’s a winner?
Whilst there would seem to be scope for giggers to feel aggrieved, EY’s report finds that, for now at least, the experience is positive:
56% of giggers agree that contingent working is how they want to progress their career
66% believe the benefits of contingent working outweigh the downsides always or most of the time
My view is that this will change. The Gig Economy is a human version of technology-enabled disruption. Like many of these markets, early participants are excited by the new possibilities. Over time however, returns diminish as more resources (in this instance people) become available.
Airbnb gone flat?
We recently put a granny flat onto Airbnb. We’ve been watching the market for a while and it’s clear that we’re not alone. Supply is exploding as others also see the possibilities of deriving rental income from underutilized space. If you remember your high school economics, when supply increases and demand stays the same, prices fall. The gold rush may have passed.
Uber drivers taken for a ride?
In Melbourne recently, Uber drivers went on strike in protest of the over-supply of vehicles and low effective wages (as little as $11/hour). Former evangelists now see the downside of a completely flexible, agile model where nothing is guaranteed. They are now seeking better conditions and a minimum wage (like taxi drivers!)
The Boss knew
As Bruce Springsteen sang in pre-digital times, “you don’t work and you don’t get paid!”. That’s the rub with all of these models. An empty airbnb room, a stationary Uber driver and a Gigger who ain’t gigging all earn the same - nothing.
A race to the bottom
There are of course benefits from the Gig Economy, but I think it’s best treated with caution. Newscorp recently made most of its photographic staff redundant – only to re-hire many of them as freelancers. This is a good example of the business imperative to gain access to talent on a flexible, low-cost basis (and damn the ethics!). Great for the business – but for the Gigger?
The commoditization of white collar jobs
There’s little downside for organisations in transferring as many roles as possible to the gig economy and the EY numbers support this. Everyone’s doing it right? And as the supply of Gigger talent increases – following the uber and airbnb examples - it’s likely that the day rates will fall. We’re already seeing this with the rise of agencies like Expert 360 and ICG in Australia. These match organizations with the experts they need on a project basis (e.g. CIO, CFO, Change lead). Models vary, but Giggers are invited to tender for a gig and the best 3 selected are forwarded to the client at a predetermined price for final selection. Not my idea of income security or fun.
You need to stand out from the crowd
The gig economy is here to stay. It makes sense to play in it, but only on your own terms. That means making it part of your career portfolio mix as a consultant, expert or entrepreneur. But relying on it for your future – even if current levels of reward appear attractive – is high risk.
It’s far better to build your own position as an influencer and thought leader. That means creating a clear position in the market – who you are, what problems you solve and who you help. Next you build a personal brand around that and obsess on communicating with power, empathy and elegance.
In a gig world, investing in building your personal brand is a smart way to stand out. Indeed I reckon it’s essential. You’ll be hard to pidgeon-hole or commoditize. You’ll attract your own customers and command the high prices your talent deserves. You can still pick up the gigs that fit, but you’ll be in the driving seat.
Work with Mark
Since 2010 Mark Hodgson has been successfully helping executives, coaches and consultants to build confidence, gain clarity in their message and position themselves as influential thought leaders who people want to work with.
He is the author of Time To Shine - Adapting who you are and what you know to succeed in the ideas economy and a leading thinker and speaker on adapting our personal leadership to succeed in a volatile world. To book Mark as a speaker for your next event contact him here.
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