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Why The Gig Economy Will Drive The Future Of Employment

Forbes Coaches Council
Mike Volkin
Lead Instructor at Freelancer Masterclass.

Before diving into the reasons why I believe the gig economy will drive the future of employment, let me define what the gig economy is. The traditional economy as we now know it comprises mainly of long-term salaried employees who work for one employer, typically within driving distance to where they live. The gig economy is comprised of short-term freelancers with no geographical boundaries in proximity to those that are employing them.

The traditional job market was born as a result of need and convenience. Before the internet, and even before (reliable) mass transportation, the only option to be employed was to find a company to give you consistent long-term work that was located close enough to where you lived. This became the standard not because it was the best option, but because it was the only option. Technology has and will continue to change that.

Factors Changing The Traditional Job Economy

The Internet: Now that high-speed internet covers much of the first-world countries and is quickly becoming available elsewhere, job opportunities are opening up outside of one's local geographic region. Now, a person can find, apply for and get a job without ever being near the company they are working for. Moreover, a gig worker can even get training, anywhere in the world, to specialize in just about any area of business they prefer. The internet has not only given us the power to find opportunities, but also the power to find and get training that is desirable for employers.

Brain Science: What we have learned about the brain in the last decade is astounding. We now know that human beings aren't meant to work for eight hours straight, they aren't even meant to sit in chairs for long periods, both of which traditional jobs require of their employees. So how did we get here? The eight-hour workday is a product of the 1938 Fair Labor Standards Act, which limited the workweek to 44 hours, or 8.8 hours per day. This was an improvement on the 100-plus hour workweek that many factory workers at the time experienced; however, the nature of work is once again changing.

Numerous studies have confirmed that working in short bursts makes us more productive and efficient workers. Ohio University conducted a productivity study and found that the top 10% of highly productive workers do not work eight-hour shifts. They found that the human brain needs 15-minute breaks for every hour of work to run at peak performance.

Many freelancers, who make up the gig economy, know this and utilize the popular Pomodoro Technique to maximize their efficiency. With the Pomodoro Technique, you work in increments of 25 minutes on, five minutes off. That interval is one set, and every fourth set you take a longer break of 20 minutes.

Competition: Companies are constantly feeling the pressure of increased competition. This causes companies to have to squeeze every penny they can to maximize profits. In doing so, it is easier and cheaper for a company to hire a freelancer to work remotely without having the added costs of hiring and onboarding an employee. Freelancers don't need office space, benefits, expense reimbursements or any of those other factors that employees require.

How The Gig Economy Benefits Companies

Many people think that freelancers are the ones who benefit most from the gig economy. I would argue it is the companies that benefit the most. Other than the reasons stated above where companies don't need to provide freelancers with office space, corporate benefits or expense reimbursements, companies get to select from a huge pool of candidates. Quality talent is the single biggest contributor to a company's success. In the gig economy, instead of having access to talent in your geographic area, companies can now access highly specialized talent anywhere in the world. And because of recent innovation in the space, companies can now manage these freelancers more easily than ever before. Companies like Teamwork, Asana and Trello, to name a few, offer companies and freelancers the ability to manage tasks, priorities and timelines. While Upwork, GoLance and others allow companies to find the most skilled freelancers for their needs. With a task force of freelancers, companies can now hire highly specialized and flexible workers from around the globe with minimal effort.

How The Gig Economy Benefits Freelancers

The days of a company defining how much an employee is worth are dwindling. A report by the Kauffman Index shows that 550,000 Americans start businesses every month. Americans and freelancers around the world are taking a big interest in aligning their life's passion with their work. In doing so, they are starting their own businesses and side hustles to command their own salaries. A comfort to many employees is the convenience of a consistent paycheck. Entrepreneurs and freelancers think differently. More and more people are starting to see the consistency of a steady paycheck as a convenience, and not a means to get ahead. Now more than ever there is an opportunity for entrepreneurs and freelancers to take control of their income, and many are seizing that opportunity.

In addition to creating their own wealth, gig economy workers value flexible work schedules as well. I believe we'll see the number of 8 a.m. to 5 p.m., Monday through Friday jobs decline because in today's connected world, it's now easier than ever to work whenever it's convenient to do so.

In my experience, companies that embrace freelancers will be more flexible and innovate faster. On the flip side, becoming a freelancer and commanding your own salary is now easier than ever before. With more than 50 million people now a part of the fast-growing gig economy, those companies that aren't embracing gig workers will soon be left behind.
