A generation ago, a permanent job was considered the norm. Searching for a job that gave you the basic benefits such as insurance, medical benefits, employees' provident fund, bonus or gratuity along with a good pay and leaves was all it took to hold an employee to a job. As generations moved forward, so did the choice of employment. The standard of living today, no matter the country, is high and maintaining it is all the more difficult.
Unlike earlier days, companies are no longer lax when it comes to permanent employees. Jobs are demanding, and working hours are intense, leaving no room for a personal life. The gig economy received a significant boost post, ever since the Great Recession of 2008. when unemployment took a downfall. Individuals began to rely on their skills to get employed. As housing markets collapsed and unemployment rates started to climb a little too quickly, things changed within the American society bringing about a domino effect among other nations as well. Companies began realizing that it is possible to balance multiple clients with the best skills of the market without having to hire them permanently.
Let's take a look at some of the developments surrounding the gig economy across countries and what are some of the implications.
Developments across countries
Countries have slowly but steadily accepted and made gig working a norm in many sectors of the economy. While the US tops the list of gig working economy, the UK is not far behind showing a 59% growth followed by Brazil and even Pakistan.
The US and Europe
Since its inception and now the constant pull of people towards skill-based jobs, countries like the US have left no stone unturned to accommodate the gig economy. However, Europe is still evolving and getting accustomed to this form of working. It is facing resistance because it lacks a framework for job security within the economy.
It’s easier for the workforce to undergo this transition of working full time to independent work because they can access social benefits like health care much more easily on their own. Whereas for gig workers in the US, they must pay a separate self-employment tax that contractors in many other countries do not have to contend with.
Some countries promote the gig economy and provide benefits to the workers involved in them. In the UK, for example, there are tax advantages for working for yourself. Whereas in countries like EU, national benefits are provided to citizens, thus making them self-reliant and motivated to work for themselves instead of a permanent job. Such benefits have helped countries climb the chart of becoming top countries leading in the gig economy.
Developing countries too are taking this economy by a storm by being a part of the top 10 countries contributing to the gig economy. According to a recent report by Payoneer, countries like Pakistan, Philippines, India and Bangladesh together contribute more than half the gig economy of the world.
India is one of the few Asian countries that has shown significant growth in freelance jobs being offered globally. A significant reason for this is also the youth in the country, which constitutes to be one-fifth of its population and expected to be half the total population by 2020.
Implications of the Gig Economy
A mindset shift concerning work models
There has been a shift in the way people perceive work. More and more individuals are opting out of traditional working patterns and choosing to join the gig economy. There are several factors for this shift, namely, the flexibility to choose own hours and freedom to pursue jobs based on skills resulting in job satisfaction. Companies should adopt and adapt to this working culture since most companies now are going digital. This means that work can be done from anywhere without being chained to a desk. The millennials and Gen Zs too have joined the workforce, where prime choice of work would be based on skills and flexibility of jobs.
Unsteady flow of jobs
The flip side to the gig economy, inconsistency with no flow of jobs; therefore, no job security. With no permanence in jobs, there is also the fear of not having the cover of benefits like health care and insurance that come with it. There is always someone better than the last one, which is making the economy competitive and sharp to remain at the top of their skills to be ahead. It is also seen that, both gigs and gig workers have grown drastically, paving the path for a greater degree of competition.
The growth of the gig economy has shown consistency so far and no signs of slowing down.
Intuit and Emergent Research predicted that the number of people working gig jobs would grow from 3.9 million Americans in 2016 to 9.2 million by 2021.
Although developed countries like the US and the UK are leading the way, developing countries are not far behind.