Gig, Ahoy!

There, on the horizon, the future of work goes by G-I-G

A stunning event does not usually initiate a new trend. It accelerates an existing trend by curbing the forces that were previously resisting it.

Self-employment built this country. Artisans worked in small workshops with manual tools. Migrant workers routinely fulfilled seasonal farm demand. Babysitting, lawn mowing, and other casual jobs are routinely done off the books for cash. Michel de Certeau, the French theoretician, even gave a name to a side gig while being fully employed: la perruque. It is an office worker using the company’s computer or a professor doing side consulting.

More recently, the number of people working part or full time as fractional contractors with no benefits or independent small businesses has grown. New York University sociologist Eric Klinenberg, in his book Going Solo, claims that this is the most significant demographic shift since the baby boom. This trend spans all generations, from college students seeking job experience to experienced retirees working for extra cash.

All four generations in the workforce have already embraced this freelance lifestyle.

Boomers choose it for impact, Gen Xers to avoid being controlled, millennials for making a difference, and highly entrepreneurial Gen Z members to be a solopreneur. The common features are the flexibility in hours, location, and work they want to take on.

The gig economy really took hold during the previous crisis — in 2008, with the financial meltdown. With unemployment rampant, people who had been laid off started taking any job available, even if temporary. They found security in multiple clients; employers saw a way not to add to headcount. A transitional step between two permanent jobs became a thing in itself.

As demand-supply grew, job titles like freelancer, self-employed, solopreneur, and entrepreneur popped up in the workplace. The best estimates put the percentage of such a workforce at around 30 percent pre-pandemic.

The gig economy looked as if it were here to stay and grow. But California introduced a law this year converting contractors into employees with benefits. Legislators in a few other states like New York, New Jersey, and Illinois follow that lead.

Then came the Covid-19 outbreak. As people stayed home, ride-share drivers’ earnings plummeted. Simultaneously, gig workers have become a crucial lifeline, delivering groceries, meals, and other supplies to people living in self-isolation. Online shopping has surged. Some laid-off people are taking up gig work for the first time.

The fundamentals that drove the previous growth of the gig economy remain solid and point to it continuing in the post-crisis “normal”:

• Employers will continue to find great benefit because they can hire the best talent from around the world. Even with any additional hourly rate, it is still cost-effective because they come with specialized skills and are ready to go.
• New emerging technologies expose a shortage of trained personnel. These can often be filled by a skilled and competent person who prefers to remain freelancers.
• Solopreneurs have an internal locus of control. Their efforts and abilities focus on outcomes in their chosen specialty. They have no desire for a full-time job.
• Entrepreneurs will build more temp placement firms and platforms in specialized domains to efficiently match the right person at the right time. If needed, they will make them staff employees.
• Entrepreneurs will embrace side-giggers for scaling their own early-stage companies. They can attract an experienced and connected part-time team member who can out-deliver a junior full-time employee they could hire otherwise for the same cost.

The recent crisis adds to these trends:

• The lockdown created a surge in demand for take-out meals, as well as in manufacturing, transportation, and shipping. The pandemic has also spawned a new job, contract tracing, which will require thousands of workers. These various job niches may come down a bit post-crisis but will likely settle at a much higher plateau than before.
• People realize that “essential workers” are often low-wage employees with few if any, benefits. They are building public goodwill, and consumers will become allies to protect the- employees or gig workers.
• Pressure from workers, advocacy groups, and lawmakers have already led companies including Lyft, Uber, DoorDash, Postmates, and Instacart to roll out policies to protect gig workers. Online shopping platforms like Amazon, as they continue to hire more warehouse workers, will also adjust. Other gig economy platforms will also have to evolve and become better employers and corporate citizens.
• The increase in work-from-home protocols and supporting new technologies will accelerate change in how gig workers are integrated.
• People who’ve recently lost their jobs or had working hours cut will turn to gig work for income and may not look back.

My prediction is that post-pandemic, like a post-financial crisis, workers and companies will accept even more gig work in an expanded number of roles. The gig economy will continue to grow and may become the future of work.

A version of this article first appeared in Twin City Business Magazine in June 2020.

To see other opinion columns go to medium.com/@rajivtandon.

Rajiv Tandon is executive director of the Institute for Innovators and Entrepreneurs and an advocate for the future of entrepreneurship in Minnesota. He is an adviser to fast growth Minnesota CEOs. He can be reached at rajiv@mn-iie.org.