The Rise of the Gig Economy
Recent years have witnessed an unprecedented surge in platform-based gig work reporting to the IRS, and people often give numerous reasons for taking on additional income sources.
Some freelance workers take on contract work as an escape from 9-5 job grind, while for others it provides a way of supplementing gaps or fluctuations in regular income streams. Yet these workers also face many unique challenges.
What is the Gig Economy?
The gig economy refers to alternative means by which individuals can earn money, including freelance work, temporary employment and contracting services. People participate in gigs for a variety of reasons including controlling their schedules or pursuing passion projects not related to their day jobs.
People are turning to the gig economy for increased flexibility and higher pay than traditional full-time jobs can provide. Furthermore, its rising popularity can be traced to consumer demand for convenience and better service; evidenced by Uber and DoorDash’s immense success as ride sharing apps or on-demand food delivery platforms such as Grubhub.
Accounting and finance (independent consultants), mortgage representatives, musicians or graphic designers may all find gig work suitable. Unfortunately, its inconsistency makes meeting financial needs challenging while disrupting workflow and long-term relationships between employees and clients.
How is the Gig Economy Changing the Way We Work?
Many individuals see the gig economy as an alternative to traditional nine-to-five work environments, or use it as an effective means to supplement income during times of financial need.
The rapid expansion of the gig economy has presented businesses, workers and regulators with new challenges and concerns. Classifying gig workers has become a key issue as this determines whether or not they have access to benefits or legal protections.
More than 23 million Americans have earned money through gig economy platforms such as Uber, DoorDash or Instacart within the past year. And many are using these platforms as their main source of income: 31% of current and recent gig platform workers indicate this work as their primary income source. These financial reliance individuals cite factors like gap payments or changes to earnings as key motivations behind taking this type of employment opportunity; others list flexible work hours among others as major attractions to this work.
How is the Gig Economy Changing the Way We Live?
Supporters of the gig economy emphasize its flexibility for workers. A majority of Americans who make money through gig work cite being able to set their own hours as one reason why they took on these jobs; other reasons cited included wanting to be their own boss and not having many options nearby. Unfortunately, critics note that these jobs don’t come equipped with benefits like health insurance and do not guarantee job protection as would typically come with full-time, traditional employee roles.
Businesses also take advantage of the gig economy by hiring off-site workers, which reduces their need for large workspaces and eliminates costs such as insurance coverage. Global platforms like Uber and DoorDash connect workers with customers from around the world allowing for gig work opportunities in various sectors from driving ride-share vehicles to writing freelance articles.
How is the Gig Economy Changing the Way We Bank?
The gig economy provides businesses with access to an expanding pool of talent – such as experts with specific specialisations or expertise they would otherwise need to pay for – which allows them to enhance their offerings and reach more customers.
However, gig workers often face unique difficulties with their employment arrangements. They do not typically receive the same benefits as full-time employees and can face complex tax and insurance challenges; additionally their unpredictable income makes it hard for them to budget and save effectively.
Financial institutions that seek to attract gig workers must first understand their needs and expectations. One way they can do this is by developing products and services tailored specifically for this demographic – for instance, creating payroll accounts with earned wages, microloans and insurance packages tailored to each gig worker’s unique requirements. They could also streamline operational processes to allow gig workers to quickly open accounts, apply for loans and manage payments quickly – this way helping them remain in control of both earnings and expenditure.
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