By | Srikanth Karra | CHRO at Mphasis
The last decade has seen the rise of the gig economy, comprised of independent contractors in flexible jobs. Its trajectory has been slow, certain and steady. In fact, even before the pandemic, the Bureau of Labor Statistics reported that 55 million Americans — or 34% of the U.S. workforce — were gig workers in 2017. Alongside these trends, as Uber and Airbnb scaled up, grew in influence and epitomized tomorrow’s sharing economy, it seemed like the gig economy was indeed the future of work.
Then, the pandemic disrupted business as we know it. Lockdowns paralyzed global economies and unemployment soared. Initially, the gig economy was among the worst-hit: In one survey, 52% of respondents from the global gig economy lost their jobs and another 26% had decreased hours. Yet, the pandemic also introduced several improved ways of working for organizations. Most importantly, social distancing norms made it necessary for organizations to embrace remote working, which emerged seamlessly as the new normal. Now, a Gallup poll shows almost half of U.S. workers would prefer to work remotely post-pandemic. This has profound implications for the future of work as independence and location flexibility are cornerstones of many positions in the gig economy.
Even before the pandemic hit in 2018, it was estimated that by 2023, 52% of the workforce will have worked or will be working independently. Today, it is estimated that the gig economy already contributes over $1 trillion to the U.S. economy.
How The Gig Economy Went Mainstream
Two key factors have motivated workers to choose the gig economy over more traditional models.
• Flexibility as a facilitator: A key factor driving the relentless growth of the gig economy has been the increased flexibility it offers the workforce. In fact, long before the pandemic, a McKinsey report indicated at least 70% of independent workers were independent by choice, in part because of the greater flexibility it gave them. Some workers also saw this as an additional source of income. Yet, financial gain was not a major consideration for most of them. The primary motivation remained the ability to create a lifestyle of their choice.