Small Businesses: Don’t Fear the Gig Economy

By Beyond

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For decades, visionaries have been forecasting the growth of a flexible workforce. The 1990s brought us the concept of "brand me," where individuals chart their own career and lifestyle rather than relying on their employer. But change has been slow to come by. Today the majority of people continue to work in traditional jobs, working set hours five days a week to earn a paycheck. There is comfort and familiarity in this arrangement for both companies and workers.

The "great recession," however, forced many people to forego their desire for a full time position. With jobs hard to come by, people took what they could get to earn a living. As a result, the number of workers taking on gigs, independent contractor and other non-traditional jobs grew rapidly, rising from 10% of the total workforce in 2015 to 16% today, according to research by Alan Krueger and Lawrence Katz.

Many Millennials grew up with this reality, and are enticed by the flexible work hours and earning potential. And, they have a new option. On-demand companies, such as Uber and TaskRabbit, are growing rapidly, and already account for .5% of the entire workforce. These companies provide the flexibility that the majority of people desire, with the infrastructure that enables an individual to essentially manage their own business.

As a result, a growing number of people are ready to consider working in the gig economy. According to a Beyond survey of more than 5,000 job seekers, 32% of respondents indicated that they would work for an on-demand company and another 36% would consider it. When asked what they found to be “most appealing” about working for an on-demand company, job seekers cited "flexibility" (52%) and "the ability to be my own boss (25%).

There is change coming. More people are intrigued by the potential to be independent, and the vast majority of workers believe work/life harmony is essential. And, these will often be the most entrepreneurial and driven individuals – the type of person that businesses want to attract. Small businesses, however, shouldn't fear the rise of the gig economy. Rather, this is an awesome opportunity.

While workers of all ages value and seek the flexibility that the gig economy can offer, the majority still prefer the known stability of a full-time position. In the Beyond survey, job seekers cited "lack of job security" and guaranteed income" (53%) and "lack of health benefits" (28%)  as the "least appealing" aspect of working for an on-demand company.

Job seekers today expect more from employers, wanting both freedom and job security at the same time. And while bulkier operations lack the agility to reinvent the traditional employer-employee relationship, small businesses are nimble enough to offer the best of both worlds. And many have with tremendous success; for instance, by implementing flexible work policies that entrust employees to manage their own time. It's amazing how something as simple as allowing employees to flex their hours can have an amazing impact on employee acquisition and retention.

Small businesses also compete directly in the gig economy. Many operations can't afford to hire full time staff for every specialized skill set, so they employ freelancers and independent contractors. The number of skilled independent contractors will grow and small businesses can continue to hire freelancers, setting contracts that enable freelancers to predict how much they will earn while maintaining their independence. In doing so, small businesses will serve as the ideal partner for the new rising trend of workers who prefer to work for themselves.

The rise of the gig economy has shown that there is no shortage of people seeking alternative arrangements such as freelance work. The number of workers in the gig economy will continue to grow. Small businesses should jump on board this trend, and capitalize on the excitement of this new workplace trend to reexamine the traditional worker-employee relationship in order to recruit the most talented workers to grow and advance their organization. 


Joe Weinlick is Senior Vice President of Marketing at Beyond 

 

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