The workforce is changing. With each passing moment, more people are craving flexibility and a better work/life balance. And they’re willing to leave their 9-5 jobs to find it.
Welcome to the gig economy.
The gig economy is an umbrella term used to refer to anyone who works a temporary or short-term job (a “gig”). Some people work multiple gigs rather than a traditional full-time job, while others choose to add a gig on top of their full-time work (a “side hustle”). Some examples of popular companies employing the gig economy include:
- Uber & Uber Eats
- Lyft
- DoorDash
- Instacart
- Amazon Flex
Gig workers can also be musicians, artisans, tutors, teachers, writers, web developers, or any other individual with a specialized skill that can meet an organization’s needs.
Let’s dive deeper into the gig economy and explore some of the things employers need to know.
Employers: Here’s What You Need to Know About the Gig Economy
As an employer, you can save money on recruiting, benefits, and payroll expenses by hiring gig workers for short-term projects. In turn, the people you hire benefit from a flexible work environment, the ability to set their own schedule, and the opportunity to work on something new and exciting.
Are you looking to recruit gig workers? Here are a few things to keep in mind:
1. Employee Classification
Especially if you’ve never hired gig workers before, be careful when classifying employee types (part-time, full-time, independent contractor, etc.). Accidentally classifying an independent contractor as a full-time employee, for example, can come with costly penalties. When determining an employee’s status, consider three things:
- What is the duration of the individual’s contract?
- Are they self-directed and in charge of their own hours?
- Are they receiving the same benefits as full-time employees?
If you’re not sure how to classify an employee, consult with your Human Resources and/or legal team.
2. Employee Benefits
There’s an important difference between “gaining access to” and “receiving” benefits. Here’s the distinction: full-time employees receive benefits as part of their employment agreement. Independent contractors can gain access to benefits if the employer offers such an opportunity.
One way to give independent contractors access to the benefits they need is by providing a platform they can use to build an insurance portfolio. Essentially, you’ll be opening a marketplace for these workers to buy benefits they may not have access to otherwise. This can help you stand out from the competition, especially in today’s marketplace. For more insight into the world of benefits, check out trusted online sources like The Society for Human Resources Management (SHRM).
3. Attract and Retain Talent
If you can’t give gig workers access to benefits, there are still other things you can do to help your organization stand out. Here are some examples:
- Engage gig workers as part of the greater team by including them in communications, meetings, and events.
- Provide new workers with company swag like notebooks, coffee mugs, t-shirts, pens, and more that feature your company logo.
- Recognize significant effort on a project with a monetary bonus.
- Give gig workers access to trainings or seminars to help them build upon their existing skills or learn something new.
Keep in mind, any perks that provide financial value to independent contractors must be reported on their 1099 form. Talk with your legal or financial advisor to make sure these bases are covered.
Now that we’ve explored what employers need to know about hiring gig workers, let’s approach the gig economy from the employee’s perspective. How do you know if a side hustle is right for you? We’ve put together a list of pros and cons to help you decide.
Is a Side Hustle Right for You? Read Pros and Cons.
“Side hustle” is a common term used to describe any type of employment that is pursued on top of a full-time job. For example, if you work a 9-5 office job during the week and deliver for DoorDash on the weekends, DoorDash is your side hustle.
Are you considering a side hustle? Here are a few pros and cons to keep in mind:
PROS
- Unlimited earning potential, depending on how many projects you accept.
- Boost your bank account by pursuing a passion, such as music, dance, carpentry, metal work, etc.
- Be your own boss and work your side hustle schedule around your life.
CONS
- Increased pressure when combined with a full-time job and responsibilities outside of work.
- Unexpected costs. Here are a few examples:
- Rideshare Drivers: gas, mileage, vehicle wear
- Musicians: instrument maintenance, special equipment
- Carpenters & Creators: raw materials, shipping costs
- Distraction from your full-time job.
Side hustles can be helpful and fulfilling, but they can negatively affect your primary source of income if you’re not careful. Make sure you prioritize your full-time job and remember – it’s paying most of the bills.
Gig Work Benefits Employers AND Employees
As the workforce evolves, gig work is fulfilling the needs of both employers and employees. For instance, recruiting gig workers allows employers to save time and money by hiring individuals whose skillsets are perfectly suited for specific tasks. In turn, gig workers benefit from a flexible work environment, complete control of their schedule, and the opportunity to pursue new and exciting projects.
Gig work is an essential part of how work gets done and money gets made in today’s world. How are you leaning into the gig economy? Share your insight with the community by leaving a comment below.