How the growth of gig work is creating a mix of challenges and opportunities  

From transforming daily work patterns to forcing the development of new collaborative practices, the COVID pandemic brought unprecedented changes to the way we conduct business. Among the effects, one of the most notable shifts was a surge in the growth of the gig economy. Although these roles were already becoming popular, it's safe to say that the pandemic played a huge role in accelerating the growth of gig work.

In this blog post, we will explore the factors contributing to the increasing prevalence of gig work, the opportunities this creates, and the potential challenges associated with this evolving labour model.

Understanding how the gig economy works 

Gig work refers to short-term or temporary work undertaken by individuals on a contingent basis, as opposed to committing to a traditional full-time position with a single employer. This can encompass anything from brief tasks like mowing a lawn to undertaking larger professional projects such as designing a website.

Gig workers include freelancers and independent contractors who operate under flexible arrangements. These workers will have the freedom to concentrate on a single project or work on multiple tasks simultaneously.

A study conducted by Payoneer involving 2,000 freelancers in 122 countries found that 46% of the gig workers surveyed saw a surge in demand for their work during 2023, suggesting that businesses increasingly depend on freelancers. In the same vein, a 2023 report from the World Bank found that the gig economy constitutes 12% of the global labour market, a much higher number than previously estimated.

This research gives an indication that many people are ready to let go of the safety of a full-time job with a stable income in exchange for the various perks the gig economy offers.

What's driving the rising popularity of gig work?

While there can be many reasons behind the increasing prominence of the gig economy, we can point out three clear reasons.

The role of technology

Today, there are many digital tools out there that help people find and get paid for various types of gig work. Platforms like Upwork and Fiverr have made it much easier for businesses and freelancers to connect with each other, breaking down geographical barriers. This empowers individuals to work from anywhere, increasing their earning potential.

The allure of flexibility

Work-life balance is an important priority for today's workforce. Being a part of the gig economy can give people the autonomy to decide their working hours and not be confined to a single employer. This freedom lets individuals work at a pace that suits their preferences and lifestyles.

The need for supplemental income

Economic instability during the pandemic led many to explore gig work as a means of bringing in extra income. The flexibility of setting their own rates and determining how much to work has been an attractive option for many. In addition, gig work gives an opportunity for many individuals to monetise their passions and skills. By pursuing their hobbies or interests in a commercial context, gig workers can earn extra income doing what they love and make work feel less like a chore.

What are the biggest challenges and risks?

Job insecurity

One major drawback of depending on gig jobs is the uncertainty about how much work will be available and the absence of a regular paycheck. Gig workers often struggle to forecast their monthly earnings, as the income one earns from a project can be highly unpredictable. The variability of gig opportunities can cause situations where a worker finds more gigs than they can handle in one month and none during the next.

Continuous skill development

The job market is becoming increasingly competitive, making it difficult to secure work without continuous skill development. Gig workers face constant pressure to stay ahead of the competition by actively updating their skills to meet evolving industry needs. Neglecting or being slow to learn new skills can not only limit one's income potential but also restrict one's access to opportunities. It's also crucial for gig workers to learn how to promote their expertise and secure new clients.

Effects on work-life balance

Having a gig job doesn't always guarantee a good work-life balance. While the gig economy offers the flexibility to tailor your work schedule around your life, the same flexibility can also lead to burnout if one doesn't know how to set boundaries effectively. Not having set work hours can tempt or force individuals to push themselves too hard, sacrificing personal time and overall well-being.

Lack of employment benefits

One significant challenge in the gig field is that, in many regions, gig workers don't receive benefits and perks comparable to those of employees in traditional employment. In Australia, independent contractors are not covered by the National Employment Standards. Consequently, many gig workers miss out on occupational safety protections, minimum pay, and sick leave.

However, the current Minister of Workplace Relations in Australia is taking measures aimed at protecting gig workers. The ongoing reforms are designed to address these issues by recognising the serious challenges faced by gig workers whose roles are similar to those of traditional employees. The reforms will focus on reassessing minimum pay rates and offering clarity on what differentiates gig work from employment.

Balancing the challenges and opportunities of the gig economy will be a major challenge for workers, businesses, and policy makers for years to come. But despite the uncertainty, it's clear that gig work will continue to expand and play an important role in labour markets and the broader economy.