Unlocking the Potential of Gig Work: How It Can Help Solve Your Hiring Challenges
As the challenge to hire skilled workers continues, more employers are joining the gig economy—that is, filling the gaps in their workforce with short-term employees. If your company is struggling to recruit personnel, or the time it takes to fill key positions is getting longer, maybe it’s time to consider using gig workers—also known as freelancers, temporary hires, and contingent employees.
The Growing Gig Economy
According to research by Upwork, gig workers contributed a hefty $1.35 trillion in earnings to the U.S. economy in 2022, an impressive $50 billion increase over 2021. Last year, more than 60 million Americans participated in some form of contingency work—up 3% from the prior year.
And it’s not just rideshare and food delivery drivers. Upwork’s study found that 51% of these workers provided skilled “knowledge services,” including information technology, computer programming, marketing, and business consulting. The healthcare industry has also emerged as one of the fastest growing gig market segments, according to Staffing Industry Analysts.
In other words, even if your business requires experienced professionals with very specific skill sets, there’s an excellent chance that you can find short-term workers who fit the bill.
Changes in Attitudes
The same shift in mindset that sparked the Great Resignation has fueled the migration to gig work. We know that gig workers prize a flexible schedule over steady, full-time employment. Their priority is often a better work/life balance, as well as greater control over when, where, and for whom they work.
Not surprisingly, younger workers—Gen Z and Millennials—are most drawn to the flexibility provided by gig work, although it’s more likely to take the form of part-time “side hustles” due to their low barriers of entry.
However, there is a trade-off for all this autonomy: economic uncertainty. Studies reveal that 1099 employees worry deeply about their financial futures, scoring twice as high as traditional employees on the Economic Anxiety Index. They also envy the employee benefits—and tax advantages—that conventional workers enjoy.
In other words, if you find you’d like to permanently hire a contract worker you’ve been using, it never hurts to ask. While many gig workers claim that they’ll never return to full-time employment, a change in their financial situation—or even, say, a looming recession—may also change their point of view. Never say never.
The Benefits of Using Contingent Workers
The gig economy doesn’t just offer flexibility to workers, but also employers. Using temporary workers allows businesses to seize short-term opportunities and react quickly to evolving market conditions.
In addition, it allows companies to hire workers on a project-by-project basis, while saving money on insurance and other benefits—which, according to the Bureau of Labor Statistics, increases payroll costs by an average of 31%. And of course, it allows businesses to see how a prospective employee performs, before making the commitment to permanently bring them aboard.
Not surprisingly, in a recent McKinsey survey, 70% of executives said that they planned to use onsite contract workers more than they did pre-pandemic.
Which begs the question: does it make sense for your business to leverage the gig economy, too?
Gig workers may offer you a solid, short-term solution—but an even better solution is to keep the workforce you already have! For this year’s most effective retention strategies, download our ebook on Employee Retention Strategies for 2023.
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