Learn how to do business and manage employees successfully in the gig economy.
The gig economy (a.k.a. digital platform work) is getting bigger. In America, around a third of the working population is already in some gig capacity.
Not surprisingly, the trend is going strong in the post-pandemic world and in the economic recession. Many companies are opening up to new and unconventional ways of doing business to cut costs in uncertain times.
So how can your business make the most of the gig economy? Are you ready for it? Do you have the right technology in place?
In this guide you’ll learn about:
Get ready to welcome more gig workers into your organization and get it right!
Click the links below to go directly to the stats of your interest:
What is the gig economy?
Significant gig economy statistics
The benefits of the gig economy for employers and employees
The impact of technology and automation in digital platform work
The challenges of the gig economy
Regulating the gig economy: the EU example
Regulating the gig economy in practice: Spain
Gig economy: trends and the future
The gig economy allows companies to hire independent workers for short-term commitments: part-time hires, freelancers, independent contractors, project-based workers, or other temporary workers.
It’s also called digital platform work as digital platforms connect freelancers/gig workers with potential clients.
Gig economy jobs are common in:
Uber, the largest ride sharing company in the world, is a great example of a company employing gig workers. Uber’s business model is dependent on large numbers of people (drivers) who don’t feel particularly attached to the company, mainly due to the type of contract.
Other examples of gig economy jobs include:
Top gig economy platforms include Fiverr, Upwork, Toptal, PeoplePerHour, Uber, Bolt, Glovo, etc.
In 2020, the gig economy experienced significant increases, mainly in response to COVID-19. This was the effect of significant job losses, but also the new independent work opportunities the pandemic created, e.g. virtual assistants in digital customer experience.
Technology and automation played a big role in this shift. Additionally, new opportunities made many workers reevaluate their priorities. Companies, in turn, decided to reevaluate their budgets.
Fast forward to today, and the number of gig workers has gone up since the pandemic hit. It’s expected to keep rising.
First, in uncertain times, more and more workers are on the lookout for alternative incomes. Second, people are increasingly prioritizing lifestyle over earnings. This appears to be easier for freelancers than for those working full-time jobs.
Independent workers who switched to the platform economy by choice are the most satisfied group within the workforce.
The world of work keeps changing and employers need to adapt to the new reality.
The spreading of the gig economy is a phenomenon in both developed and developing countries.
Unfortunately, it's difficult to estimate exactly the size of the gig economy, especially when freelancers work in addition to their main job.
Still, the stats below will help you better understand the overall size of the gig economy.
Who exactly are gig workers and how much do they earn on average?
Check out these stats:
Interested in HR and payroll statistics 2023? Check out our articles:
What are the benefits of the gig economy? Who benefits most from this employment trend?
The gig economy benefits both employers (businesses) and employees by making work more adaptable to the needs of the moment and the demand for flexible lifestyles.
The digital platform economy has many benefits for businesses, especially for economic reasons.
Consider these stats:
Using freelancers instead of full-time employees (an on-demand model) often means better efficiency, increased productivity, and lower costs.
In a nutshell, integrating an alternative workforce into their operating model can help businesses:
Unfortunately, some processes can also get complicated, especially for high-volume employers who deal with the dynamic process of hiring and paying a flexible workforce and frontline workers.
Symmetrical can help such companies radically simplify the way they hire and pay people. Our automated payroll services will improve your payroll system, and reduce your existing costs, especially the high cost of running payroll.
The digital platform economy also benefits employees. The majority of gig workers enjoy the independence, flexibility, and job variety this type of employment allows.
Many gig workers report higher happiness and satisfaction levels with their work compared to people in traditional full-time employment, even if they have to work more and/or earn lower salaries (BCG Henderson).
Increase the satisfaction of your employees with HR Calendar 2023!
According to BambooHR’s survey, the top reasons why people leave their jobs include dissatisfaction, mental health, poor pay, and unethical leadership.
Consider these stats:
The majority of independent workers want to stay independent.
Some of the key reasons for freelancing include:
For this reason:
Get ready to welcome more gig workers into your organization.
The impact of technology is significant in the gig economy. Above all, thanks to technology, “gigs” have become easily accessible. As a result, freelancing, which used to be a side hustle, has turned into a trillion-dollar industry with millions of participants.
There’s a wide range of gig work apps and freelance platforms, such as Freelancing, Upwork, or Fiverr.
Consider these stats:
The Gig economy has become accessible to a large number of people thanks to the recent advances in technology and connectivity. Online talent networks are growing quickly and are employing hundreds of millions of people around the world.
With platform workers using new gig apps and digital processes, the new digital engagement opens up unexplored territory in gig work.
The bottom line: Businesses can expect some rapid changes.
The question is: Will companies have the technology to meet the new gig reality?
One thing is certain: companies employing gig workers will need software and digital apps that simplify complex processes, e.g. an app that would allow gig workers to pay into a healthcare fund.
Take Uber as an example. The company has been so successful as it delivers a data-driven unified experience. For instance, the Uber app shows drivers what goals they need to accomplish (and how). This model shows the importance of simplicity in gig work.
The gig economy needs only apps that simplify processes. This is the future of the gig economy.
Piotr Smolen, CEO at Symmetrical
Now consider payroll: one of the most important aspects for HR and finance departments to deal with when hiring gig workers. Flexible work, high-volume recruitment, and global hiring opportunities mean much more complex and volatile hiring and payroll operations, especially when gig workers sell their skills and services ad hoc.
As a result, simplicity, flexibility, and efficiency are essential. The truth is that manual work and multiple spreadsheets are not an option any more. Unfortunately, most payroll solutions are not ready for this change.
Still, the gig economy is growing fast. For this reason, get ready to hire more platform workers. Don’t wait to prepare your business for the future.
The growth of the gig economy brings not only opportunities, but also challenges.
From the employee’s perspective, for instance, there’s the issue of job security and medical coverage. The self-employed lifestyle doesn’t come ready-made with benefits such as a healthcare plan. However, in the USA, 84% of workers cite health insurance as the benefit they care about most, followed by sick leave (83%).
Furthermore, platform workers miss out on “soft” benefits like corporate discount programmes and subsidized gym memberships. It's also more difficult for them to find advice and mentorship without a workplace.
According to Brodmin:
In a nutshell, gig employees are concerned about:
From the employer’s perspective, hiring gig workers means lower costs. However by moving to a more on-demand model, businesses lose the institutional knowledge historically held by regular employees.
Employers are also concerned about:
From a wider social perspective, the gig economy can resemble a modern servant economy with underprivileged social groups that have to choose between flexibility and stability.
From a legal perspective, digital platform work remains unregulated and has numerous legal loopholes and outdated laws. This may have long-term consequences for both employees and employers.
For this reason, the EU is planning to better regulate digital platform work and improve the protection of gig workers.
Technology, automated solutions, and digital apps can also help centralize and optimize many processes, especially if one gig worker has multiple employers.
Over 28 million people in the EU are currently working via digital platforms. Now the big debate is over the working conditions of platform workers, which may affect up to 4.1 million employees.
In December 2021, the European Commission proposed legislation on improving the working conditions for gig workers. The EU law would set minimum requirements across the bloc, which national lawmakers might decide to develop further.
Thanks to the EU Directive, EU-based gig workers would be reclassified as employees and would enjoy the same labor rights as other traditional employees. The remaining could be recognized as genuinely self-employed.
Gig workers classified as employees would gain the right to:
The EU has set a deadline of 2025 for the rules to be written into national law books. This should happen before the gig economy becomes too big to handle.
In a nutshell, regulating the gig economy will help:
Digital platforms connecting gig workers to jobs usually use algorithms and automated systems to monitor workers, allocate tasks, organize shifts, and set prices.
Algorithmic management is a set of practices whereby decision-making functions are assigned to AI-driven software and apps. Unfortunately, this automated decision-making system may leave some workers unable to understand the logic behind their chores and fees.
Still, it’s important that gig workers feel comfortable using platforms and automated systems that monitor their performance and support the decision-making process in terms of assignments and earnings.
Hence, the EU directive aims at increasing algorithm transparency. The goal is to strengthen human monitoring of automated decisions and, if they’re incorrect or unfair, introduce the right to contest and rectify them.
Additionally, workers will be able to obtain more information on how they’re being supervised and evaluated. Platforms won’t be allowed to collect personal data that is not related to the workplace. Using Artificial Intelligence also requires a regulatory framework.
The EU proposal predominantly impacts the ride-hailing and food-delivery industries. It affects not only employees, but also consumers, restaurants, lawyers, and the wider economy.
Unfortunately, the legislation is expected to bring more legal clarity, but also disappointment. For instance, employees may need more protections, but not all of them want to go through a contract. Some of them like their current flexibility and wages.
Platforms are skeptical, too. They say that workers should be able to choose their own form of employment. The EU proposal will make it impossible for many platform workers to work for more platforms or to decide their working hours. It may also put thousands of jobs at risk.
Potential negative consequences related to the new regulations include:
In August 2021, Spain became the first European country to significantly regulate the gig economy. The Supreme Court declared that riders were not self-employed workers but rather employees.
The so-called riders’ law was the Spanish government’s response to protests against low wages and job insecurity in the gig economy.
The law requires that delivery companies:
However, a law to improve the working conditions of gig workers in Spain backfired as companies were reluctant to implement it. Many employees, in turn, got paid less and had to work more hours, which made riders confront their employers.
The truth is that not all riders dream of becoming staffers, but prefer being contractors working for several platforms.
After the riders’ law came into force, most delivery companies in Spain worked hard to subvert or ignore the law.
Gig companies like UberEats were supposed to provide employee status for their riders. Instead, UberEats fired 3,000 self-employed workers (so they didn’t have to hire them) and started hiring riders through third-party companies (unions consider this practice illegal).
The British unicorn Deliveroo decided to leave Spain entirely.
Glovo attempted to respond to the employment court’s orders without explicitly changing workers’ status. The goal was to create a new “independent contractor collaboration model” to provide the flexibility, autonomy, and independence that many employees value.
In reality, however, the changes to the algorithm undermined the freedom for riders to work when they chose and for the rate they wanted.
It’s an important lesson for the rest of Europe. Before other European states contemplate similar laws to regulate the gig economy, policy makers should learn from the mistakes made in Spain.
Piotr Smolen, CEO at Symmetrical
Despite all the challenges, the future of digital platform work looks bright.
The gig economy is expanding 3 times faster than the total US workforce. There’s a massive shift from traditional work and full-time employment to freelancing, independent contracting, and working part-time.
The fact is that in the post-pandemic world, more and more job seekers will be turning to digital platform work. As most gig workers seem to be happy working independently, gone are the days of working 9-to-5 in a cradle-to-grave job.
The future of the gig economy is bright.
All facts considered and according to some projections, gig workers may outnumber the traditional workforce in many sectors. This will impact both workers and businesses.
Consider these stats:
Thus, independent work has big growth potential.
#1. The gig economy is expected to impact the legislative and payroll processes.
In the future, gig workers should have more rights and protection. They should also be payroll employees. Without being on a regular payroll, they may struggle with getting paid on time, or at all.
Thus, a modern automated payroll solution will be a must for employers, especially if they hire large numbers of gig workers.
Automated solutions will be essential for employers. In fact, they already are. Having the right technology and software will be extra important for HR, payroll and finance teams.
Piotr Smolen, CEO at Symmetrical
#2. Technology will help gig workers collaborate more easily (and more often).
People want to earn more from work than money. Gig workers usually do similar work activities as traditional employees, but they don’t collaborate. Luckily, technology and digital transformation can help them form a community.
For example, a gig work app can have its own built-in social feed. Users could:
Digital platforms can help harness the full potential of technology to make gig/remote work easier for millions of people.
Symmetrical’s automated solution does that, too: it makes work easier for gig workers (as well as for HR departments and other business executives).
#3. Traditional office employees are likely to demand a setup that looks more like gig work with all its flexibility.
Not everybody feels comfortable returning to the office in the post-pandemic world. Many people have redefined what work is. Businesses and HR departments must be ready for this. They will also need simple solutions that will make their lives easier.
The gig economy creates new opportunities for employees, but also for employers who can attract the right talent at the right time.
However, it also poses new challenges on business, social, human, legal, and technological levels. With more and more participants, it will soon require new legislation to regulate it.
The pandemic and a disrupted economy have accelerated the growth of digital platform work. If the gig economy continues to expand so rapidly, it can overtake the traditional job market.
Digital platform work is changing the contemporary business landscape. Thus, your company must be ready to welcome more platform workers … and put them on payroll!
Is your payroll solution ready for the gig economy?
Symmetrical is a better way to run payroll and HR admin. We enable fast-paced companies to onboard at scale and run their payroll invisibly. To run your payroll hassle-free and on autopilot, contact our experts to learn more!
The gig economy and future of shared services and GBS delivery models
The Future of Employment
The Gig Economy: flexible freedom or wage slavery?
Gig Economy Statistics and Trends
Gig Economy Trends 2024: 5 Predictions
23 Gig Economy Statistics
COVID and the Gig Economy
Projected gross volume of the gig economy from 2018 to 2023
Gig Economy: Definition, Statistics & Trends
Gig Economy – The Economic Backbone of the Future?
The hidden downsides of freelancing
Gig Economy Statistics: Demographics and Trends
The EU’s plans for improving gig working conditions
EU Proposes New Protections for Gig Workers
New EU rules could turn 4.1 million gig workers into regular employees
Improving the working conditions in platform work
5 things to know about the EU’s gig worker plans
EU launches bid to regulate gig economy
Spain’s failed plan to fix the gig economy
Spain had a plan to fix the gig economy