HR

Gig Economy: Analyzing the Pros and Cons

Published On
September 28, 2023
Read Time
3.5 Minutes
Author
OnBlick Inc

Gig Economy: Analyzing the Pros and Cons

Gone are the days when people had to rely on permanent and in-office jobs. With the rise of the gig economy, short-term opportunities increased along with the freedom to work from anywhere. This resulted in a significant increase in the number of people working as freelancers.

This article helps you understand gig work and its pros and cons.

Gig Economy in Brief

The term gig economy refers to a labor market system where businesses can hire individuals to perform specific tasks and assignments. Gig work, in simple words, refers to the work that people do as freelancers or consultants. Businesses can hire individuals to perform specific tasks, assignments, or jobs in the gig economy. These workers, who are typically referred to as gig employees, have the liberty to work for multiple clients simultaneously.

While companies can benefit from a productive working environment, planning is required before signing gig workers. This calls for companies to understand the advantages and disadvantages before getting involved in a gig economy.

Why Choose Gig Work?

  1. The gig economy allows managers to get freelancers to work from home or remote locations, thus creating a diverse community.
  2. Managers can use the gig economy as a talent gap filler.
  3. Projects can be accomplished at a better pace.
  4. Companies can simultaneously create a backup for profit and income with the gig economy.
  5. There will be lesser expenses as companies can save on space, electricity, equipment, etc.

Pros of Gig Economy

The rise of the gig economy has completely changed how we look at traditional jobs. Companies can benefit the most through the gig economy. With the rise of app-based platforms, companies can now easily hire and manage gig workers and assign projects. With a task force of freelancers, firms can now find the ideal individuals for their needs. Through the gig economy, companies now can access highly skilled freelancers from anywhere in the world.

Less expensive: One of the main reasons companies use the gig economy is to save money. Many companies do not have to provide health insurance for their workers. Many of them can easily hire people with no background checks and make a better workforce.

Short time employees for short projects: If the company only needs a few people to help with a new program or service, hiring a gig employee may be the best option. The projects will be accomplished, and companies can save finances for better and bigger projects.

Save education funds: The gig economy provides opportunities for people who want to learn new skills and are willing to work. They can find work with the exact skills and credentials they want. At the same time, the company can save educational funds-a two-way benefit.

Round the clock service: Hiring a remote workforce will help companies be available for consumers at their needs. This could allow you to maintain your network and provide services at all hours of the day. The company visibility will be increasing.

Adds diversity : With the rise of the gig economy, companies can now find a wider variety of workers than they usually have in their local pool. This allows employees to meet their deadlines much faster. Managers can also create a structure where people can work from anywhere. This adds diversity to projects and gathers better ideas.

Cons of Gig Economy

Despite the advantages of the gig economy, many employers are still worried about the potential risks of hiring temporary workers. There are uncertainties to face with the gig economy.

Employee dropouts: Since gig employees look for new opportunities constantly, they may leave the projects when better openings are available. As opposed to permanent employees, gig employees may not be very loyal to the company. This will be tiring for the employers and the company as projects could get held up. The gig economy can be uncertain at times.

Legal challenges: Looking for freelance workers can be slightly challenging for businesses. Some states have written agreements, while others have “at-will” statements that allow employers to terminate the relationship at any time. There are often multiple forms and procedures that businesses need to follow to get their tax information. It can be a bit of a headache to navigate for companies.

Ethical issues: The gig economy has always been controversial. Companies that follow certain ethics can find it challenging to accommodate gig workers that lack commitment and sincerity to work. Since these employees are often casual workers, it can be precarious for a company that values an ethical reputation.

Final Thoughts

The gig economy is constantly altering the way businesses operate. While this system has some disadvantages, several experts agree that it benefits companies across sectors. Nevertheless, businesses should research well and develop appropriate strategies before hiring gig workers to yield better benefits.

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