How COVID-19 has affected the gig economy
There’s no question that COVID-19 has hit the economy hard. From layoffs to business closures, to stock market collapses, it’s been a year. To say the least. According to Pew Research Center, the U.S. unemployment rate shot up from 3.8% in February – among the lowest on record in the post-World War II era – to 13.0% in May. This leaves a large amount of our population jobless and searching for work, where the gig economy can help.
Gig work is driven by digital platforms that include a variety of ‘jobs’ or temporary work. From Uber driving to food to delivery to shipping, catering, events – gig work gives the worker non-traditional benefits such as flexibility. The gig economy can add tremendous benefits and value to local economies, by providing jobs to those within your community, to spend within your community. Small businesses everywhere are struggling to hire and retain employees. Gig work is a solution that some may not know about, or know how to utilize to its fullest potential.
Benefits for the employee and employer
Gig work is almost a perfect situation for retired professionals, college students and those making career changes. For some people, gig work provides a convenient way to supplement existing income or help cover unexpected or additional costs. For others, it’s a way to steadily ride out an extended career transition or hold out for the right opportunity. Still others say gig opportunities enable them to explore different industries or simply provide a needed social outlet. In all cases, the short-term, optional nature of the work is the critical empowering factor. In a culture that celebrates the free agent, the gig economy also provides individuals a midway point between true entrepreneurship and corporate work. It enables workers to experience different kinds of work without necessarily identifying with it.
The gig economy also gives employers the opportunity to finally embrace worker turnover, which is simply endemic in some fields. In a recent study by SHRM, retention/employee turnover was the top workplace management challenge cited by 47 percent of HR professionals polled. Data from the study indicates that the three biggest challenges turnover causes include, employee turnover is costly, leads to a decrease in overall company productivity, and makes it difficult to retain sought after talent. In another similar study, results show that 78 percent of business leaders rank employee retention as important or urgent. Additionally, one-third of new hires quit their job after about six (6) months.
New platforms for temporary work mean that employers don’t necessarily need a team of exclusively full-time workers because they can access pools of equally (if not more) qualified gig workers on demand.
Using the gig economy to hire new talent
For many organizations, the hiring process has changed since COVID-19. With layoffs, furloughs, budget cuts, and hiring freezes, organizations everywhere are feeling the pressure to hire the right talent for future success. Recruiters and hiring managers are finding new avenues and ways to hire talent, and one of those ways is gig work. Gig work is the perfect way to “try it before you buy it” when hiring new employees. It offers a range of flexibility and freedom for not only the employer but employees as well. It provides a way to have a potential new hire come in, try their skills, meet the team, and see if they’re a good fit before having to make any long-term commitments. Also, the employee gets to build their resume by trying new jobs, broadening their skills, and experience within the workforce.
Other ways to utilize the gig economy
Not only can gig work be used to hire talent but there are several other ways that gig work can help benefit your organization. The upcoming holidays are one prime example of how retail, shipping, packaging, and other organizations can utilize gig work. During these few months, many organizations need extra help to meet demand but are hesitant to hire new employees due to all the hoops needed to jump through to onboard a new employee. That’s where the gig economy comes in. You can hire these temporary employees through temp agencies, and digital platforms to fulfill all of your organization’s needs, while never needing to hire new employees. This is extremely low risk with a high reward option during the next 2-3 months.
There is no doubt that COVID-19 is shaping how organizations hire, maintain, and retain talent. This is an unprecedented, never before seen time for businesses to make changes to their traditional models, one of those being the way they look at temporary workers. The gig economy has a bright future in front of it and based on what I’ve seen so far, gig workers could be the solution to problems companies didn’t even know they were facing.
I think it’s about time to stop thinking of the gig economy as “extra work” or “side hustles” and start realizing that this is how millions of people make a living, and is a force of good within our economy. Companies should use this opportunity to really hone in on the gig economy and how to best utilize its benefits for not only the employees but employers. It’s time to stop thinking of the gig economy as just a food delivery or taxi service, and start realizing its potential to scale your workforce, and assemble new talent in an innovative, new way.