The gig economy concept is a free market where companies hire people on a short-term basis for temporary posts. The new system of the gig economy benefits both companies and contract workers.
In this economy, workers have the freedom to determine their work type, which allows the company to hire on-demand workers to meet the needs of their customers.
Along with the benefits of the gig economy, there are also some challenges that companies and contract workers may face. This article will cover the challenges and opportunities of the gig economy to help you decide whether to work in this free market. Let’s dive into it!
Challenges of the Gig Economy
- Low Benefit
The gig economy has drawbacks as well. A survey found that gig workers, including freelancers and contractors, make 28% less money compared to regular workers. However, the fact that the gig workers work fewer hours is also a factor.
More than 70% of businesses that employ workers do so by hiring individuals from the gig economy, enabling them to swiftly change the size of their workforce without spending as much time searching for qualified candidates.
In addition, companies use the gig economy model to prepare employees for particular jobs based on their needs while saving money on business profits. Low benefits in the workplace gig economy are considered significant challenges for gig workers.
- Lack of Job Security
Because the gig economy is generally unregulated, workers have minimal job security. Also, in this system, gig workers receive lower social security benefits. The advantages of pensions, gratuities, health insurance, etc., are not available to the workers.
- Less Scope for Skill Up-gradation
In the gig economy, employers invest little in training to upgrade the skills of their workers. Therefore, gig workers must manage at their own cost to upgrade their skills. In addition, the unionization of workers is difficult in the gig economy.
- Not Enough Flexibility and Unstable Income
Although gig workers have the flexibility to choose a working schedule, they still have to work outside their schedule at times. When companies need them to do extra work, they pressure or force them to work; the workers have to follow the company’s instructions.
In terms of income, in this system, the income of the workers is unstable.
Workers’ salary is based on their completed work, and their monthly wages are uncertain.
- No Legal Protection
There are no legal protections in the gig economy; hence, gig economy workers are considered independent workers or contractors – not employees. Without any legal protection, these contract jobs are always at risk.
- Inequality
In the gig economy, bargaining power is based on people’s talent and job position. More skilled people like video editors and consultants have more bargaining power and earn fair remuneration.
In contrast, people in lower positions, such as drivers, and delivery boys, have limited bargaining power. They only sometimes get proper remuneration.
Opportunities of the Gig Economy
There are vast employment opportunities in the gig economy where more and more people can work on a contract basis. Finding a job in today’s job market has become difficult. Still, the gig economy is giving people a variety of job opportunities on a contract so that people can fulfill their financial needs.
These contract jobs are helpful for jobless or unemployed people. The gig economy has created employment opportunities not only for men but also for women. Women can also become self-reliant with the gig economy.
The significant feature of this economy is that it allows workers to choose the schedule of their working hours. Also, the workers have the flexibility to work in the geographical areas of their choice.
The gig economy provides benefits to workers as well as organizations. Here employers get access to a wide range of talent that they can hire to meet their workforce needs.
If workers are suitable for providing service to customers, they can keep them for the long term. On the contrary, if they do not meet the expectations of the employer in producing quality work, the employer can dismiss them, as these are contract basis jobs.
The gig economy has exploded recently. The Covid-19 epidemic significantly contributed to the growth and trend of the gig economy. Due to Covid-19, many people lost their jobs and were forced to stay at home. Nevertheless, people were able to significantly improve their financial circumstances by working in the gig economy.
Future predictions indicate that the reach of the gig economy will expand significantly. In the year 2023, there will likely be 78 million gig workers working throughout the globe.
Conclusion
Employers need help finding talented people. The process of selecting suitable candidates costs the employer a lot. But with the gig economy, the employer can try the people’s talent by hiring them for the short term. On the other hand, by doing short-term jobs, people can increase their work experience, which can later be helpful in getting a job in another sector.
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