How and why employees and employers are embracing the gig economy model

There was a time when the phrase “gig work” was associated with low wages, no benefits, and a lack of opportunity.

The modern (and remote) workforce — a workforce defined by flexibility — has changed that.

Recent research shows that 16% of Americans have earned money from an online gig platform.

Yes, short-term and contract work existed before smartphones, but technology has ushered in and elevated today’s gig economy. People can, with a few clicks, find work — on their terms, on their time. Companies such as Uber, Instacart, and DoorDash were founded on these very principles, adding a new layer to the labor force. Today’s flexible worker is seeking flexible income options, and forward-looking companies are meeting workers where they are. Leaders at these organizations are asking: How can gig workers support my company’s needs, and how can the company support workers in ways that matter to them? Let’s take a closer look at the different types of gig workers, how organizations can accommodate each, and how the gig economy will continue to redefine the workplace.

Different goals, different types of gig workers

I define the “gig economy” as a labor market in which workers earn income by providing on-demand work or services. This setup allows a company to be flexible in its growth and expansion of labor while creating opportunities for gig workers to have flexibility within their work that has uncapped potential. Some workers are seeking an Etsy or Airbnb side hustle. Others may seek a temporary position in a specific geographical area, such as a travel nurse. TaskHuman has a client called Intelycare that offers their registered travel nurses the same benefits packages offered to full-time employees.

If the Great Resignation, Great Reevaluation, and quiet quitting workplace trends have taught us anything, it’s that today’s workers need (and demand) flexibility. People continue to change jobs, pivot careers, retire early, take sabbaticals, or start their own businesses.

Basically, there are four tiers of gig workers that power the gig economy:

• Multiple shifts, multiple jobs: This person is seeking flexible working hours and work that doesn’t require specialized training or educational degrees. They may work multiple shifts for multiple companies.
• Career pivot: This person may be a stay-at-home mom who, during the pandemic, reassessed their life and career goals. They opted out of a demanding corporate job to focus more on family and now takes on influencer marketing contract work, content writing, or administrative assignments.
• The nomad: This person embraces the gig economy to fuel (and finance) their nomadic lifestyle. They can take work as much (or as little) as they want, when they want, where they want. After one assignment, they may opt out of work for a month to travel.
• Side hustle: This worker may already have a full-time position and seeks a side hustle for extra revenue. This could even be more passive revenue in the form of maintaining a real estate portfolio and serving as an Airbnb host.

On-demand, scalable talent

The modern worker is seeking more flexibility and diversity in their day-to-day life. Many people are renegotiating their relationship with work while companies struggle to hire and retain talent. Traditional career factors such as compensation, titles, and promotion opportunities are no longer enough to attract and keep talent. People want flexible schedules, non-traditional career paths, and faster career pivots. Employees are opting out of the long commutes, open offices, and the “retire at the end with a gold watch” career path. Workers want to take a different path, and the gig economy offers a solution.

From a corporation standpoint, the gig economy allows organizations to be agile, scalable, and creative with their talent pool. This is key, considering a potential recession and daily headlines about layoffs. In fact, 421 tech companies have laid off more than 119,500 employees in 2023 (so far). Many affected employees will move away from the 9-to-5 norm, some becoming bloggers or influencers. Meanwhile, companies will examine how they create, structure, and manage specific roles. A pool of gig workers is low-risk for the organization and can be mapped to supply and demand needs.

A newer company may not yet have the budget for several full-time employees, but could benefit from contract workers for critical projects. Or, the company may be scaling too fast and may not be able to offer full-time benefits to a huge influx of employees. Companies can tap the talent resources they need when they need them within the gig economy. Companies can evaluate employees on a project basis before offering them a full-time role. Also, a contract engagement allows an employee to assess whether they are a fit for an organization before making a full-time commitment. The employee, loyalty-wise, is not limited to that organization; they can consider other options as the company scales.

Flexible work, flexible benefits

Speaking of loyalty, smart companies will treat their gig workers with the same respect they extend to their full-time employees. Any person working for an organization wants to feel cared about by that company; they don’t want to feel “less than” a full-time employee. Communication and transparency matter — and both can build champions within the gig economy.

Organizations that may have foregone benefits to non-full time workers will need to be as competitive in their offerings to contracted workers to reduce churn. As the gig economy becomes more prevalent, we may see organizations extend their same full-time benefits to contracted workers. Companies can also offer gig workers benefits based on a sliding scale that correlates to the workers’ commitment to the organization. Someone who works 20 hours per week will have a different set of benefits than someone who works one hour. However, these benefits, which could include personalized coaching or wellness stipends, should be competitive from an industry point of view.

Related: Nearly half of U.S. gig workers report difficulty accessing health insurance, study finds

As more workers and organizations embrace flexibility, the gig economy concept will become normalized. I think we will see more companies adopting this gig economy model in the coming years, especially as we see more next-generation workers, including Generation Z, in the workforce. No longer is gig work viewed in a disparaging light; just as remote work has become the norm, gig engagements will become an integral part of tomorrow’s labor landscape.

Ravi Swaminathan is founder and CEO of TaskHuman, a real-time digital coaching platform that connects each employee 1:1 with a global network of coaches over video call in nearly 1000 topics of daily work and personal life.