The global labour market has fundamentally changed by gig economy, the spread of hiring freelancers. About a third of employees worldwide are working independently, a tendency more notable in developed countries. This process is not likely to halt in the coming years, moreover, freelancers could make up even 50% of the total labour market in the future.
Gig economy might be a familiar phrase to many. In short, it means that employees are not committed to one single company, but rather work as freelancers, so they can work part-time and take more than one job.
It also means that the employee becomes independent, the worker’s salary entirely depends on his or her capacity and time management. Additional motivation could be that in this case, a higher income can be achieved and employee satisfaction could also be improved.
Let’s see the numbers! According to estimates, about the third of the global labour force is made up of freelancers. In the United Kingdom, France, and in the Netherlands the growth of freelance workers has exceeded that of the full-time employees. In 28 countries of the EU, the number of freelancers has doubled between 2000 and 2014, it has grown to 9 million. This way, basically, they are the fastest growing group in the EU labour market. The same process was rapid in the USA too; currently, 35% of the working-age population is a freelance worker, and this could potentially reach 50% by 2027.
Demographic and technological changes and sharing economy contributed to this process and started fundamental shifts in the labour market. These factors are also likely to maintain this tendency.
GIG ECONOMY IS FUELED BY DIGITALIZATION
Nowadays, employees do not have to be physically present in the workplace, so many people are working from a distance, from home. Basically, technological developments are the foundations of the freelance economy because currently there is a particular online platform or phone application that enables ‘gigs’.
Just think of Uber, TaskRabbit, or Airbnb – all of them are closely interwoven with sharing economy. Clearly, they are built on connecting demand and supply, there the employee liaises between a service and the customer.
As for technological advancements, we are heading towards a world, where we have to keep learning so that we can make a living in a rapidly changing environment (like the effects of automatization and robotization). Young adults today cannot take it for granted that they can work in one field, they have to be ready to learn an entirely new profession if they must, which encourages freelance working next to self-tuition.
CHANGING DEMOGRAPHIC TRENDS
The population of developed economies is constantly ageing, meanwhile, people are living longer. The elderly are already represented among freelancers, and their number is expected to go even higher. Especially that this form of employment allows working after retirement thanks to the flexible hours. This is likely to play a major part in countries where state pension is lower.
CHANGE IN CORPORATE CULTURE
Companies too see that certain tasks are done by freelancers, who practically are only in contractual relationship with them. It means that they have to have a more flexible attitude and accept that the employee is not working in the office and is not a part of the permanent staff.
Meanwhile, employing freelance-workers allows companies to expand their labour force base only in certain periods, and once the workload decreases, they can return to the original staff. Firstly, it could be cost-efficient, and secondly, it also enables companies to hire talents who probably would not want to work full-time.