Temporary employment, the ‘Gig Economy’, contract employment or working as an independent contractor are all different names for what is coming into focus as one of the most significant developments in the job market in recent years.
The people who do these jobs find there is a compelling trade-off to be had when they become their own boss and start working on a project by project or ‘gig’ by ‘gig’ basis. Employers call it the ‘contingent workforce’, which is a generally accurate euphemism for the ‘just-in-time’ employee. The same kind of economic dynamics have been applied to product supply chains for some time, so it is understandable that companies would begin to experiment with the same dynamics for their workers.
Many governments aren’t entirely sure what to make of the new employment landscape. Much of the middle class economy has been built around the idea of a full time regular job that continues indefinitely and might result in the occasional salary increase or promotion. But with employers now able to shave their budgets down to atomic valuations of fractions of a cent, and also able to compare those costs with alternatives, every inefficiency has been carved out of the workforce, and with them went a lot of good jobs.
As with any change in conditions, when the employers act to preserve their profits, employees act to preserve their incomes, and that has led to significant ‘contingent worker’ populations at many companies. To be fair, the idea of hiring an independent contractor or working in the ‘Gig Economy’ makes sense in a lot of situations for both employer and employee.
Projects become more focused. Management doesn’t have to worry about the political ramifications of hiring and also doesn’t have to spend time making sure everyone gets along. The independent contractor finds he or she can build a formidable resume quickly and can often command higher pay depending on their skills and the demands of their projects. All of this comes with tradeoffs, of course, but companies and contractors are finding often those tradeoffs are more than compensated for by the power and flexibility of breaking their productivity up into smaller, more manageable segments.
Some of the more formal ‘gig’ organisations like Uber and AirBnB have created competitive obstacles for other firms due to their ability to step around some of the more expensive regulations incumbent businesses face. Some would say this qualifies as ‘disruptive’ technology, which by all rights should lead to the metaphorical rising tide that lifts all boats, no pun intended. At the same time, those incumbent businesses have a point when they complain to government: namely they bought in under one set of rules only to find the playing field upended and their investments in jeopardy.
Whatever the outcome of the ever-changing workplace dynamics, the advantages of the ‘Gig Economy’ and its endlessly flexible army of specialised independent contractors are obvious and will continue to be the goal of employers looking for ways to increase their productivity or cut costs (or both) in the short-term at least.
For individuals and companies both, these developments can be good news if each is willing to respond by playing to their own strengths.