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HR professionals have undoubtedly heard the term “gig economy” in discussions about the evolution of the American workplace.


The term refers to an economy characterized by workers who rely on doing short-term, temporary work for multiple employers to generate income, in contrast to the standard model of long-term employment with one employer. It’s a new, standalone and distinct entity, as well as an aspect of the larger, traditional American economy.

The gig economy comprises an enormous cross-section of what we consider work — everything from rideshare drivers, freelancers and contractors, task-based workers, and on-call staff. As of late 2018, it’s estimated that 57 million workers in the U.S. are part of the gig economy.

And by all estimates, it looks like the gig economy is here to stay. The term “gig economy” began to spike as a search term on Google around June 2015. In this short period of time, it has gone from a relatively unknown term to a staple for economists, American workers, and employers to understand the way we work in today’s world.

It’s crucial for employers to be familiar with the gig economy and the way it impacts working life. Whether or not your human resources strategy directly includes hiring gig workers, the economic impact will reach your business. Even employers who don’t believe that they directly hire gig workers may be doing so in the contracting of freelancers or support staff. In a labor market where the stakes are rising every day for recruitment and retention, the better your understanding of the gig economy, the stronger your ability to create an HR strategy that is contemporary, flexible, and empathetic.

As the gig economy continues to evolve, here are the central tenants to be aware of:  

  1. The gig economy includes a broad group of people. With so much recent discussion around how younger workers approach working life differently than previous generations, it might make sense to assume that it’s Millennials and Gen Z workers who comprise most of the gig economy. In fact, 60% of Millennials are not involved with the gig economy, with 66% in full-time employment as of 2018, an increase from 45% in 2016. Gig economy work runs the gamut in terms of employee makeup, from retirees looking to make extra income, to new parents who need a flexible schedule, to workers whose former jobs were in declining industries. Developing a strong strategy for supporting gig workers is a deliberate way to demonstrate empathy to a diverse group of workers, all of whom are adjusting to a rapidly changing economy.
  2. Gig economy workers are seeking connection at work. Even though gig economy workers may not have a permanent “home base” to work from each day, they still seek personal connection at work. Social isolationism is a major problem facing American workforces, but employers who support gig workers have options to combat it. If you employ gig workers, consider face-to-face touchpoints to build connection, even if through video chat. Having a workspace set aside for gig workers can help, too, and give these employees a sense of permanence and belonging.
  3. It’s more than possible to offer benefits to gig economy workers. Employee benefits continue to be the lead strategy through which employees experience empathy from their employers. Offering benefits to employees is a massive investment, but there are ways to offset these costs while making gig workers eligible. You may consider offering voluntary benefits that are not employer-paid, with rates that are negotiated to be more reasonable than what an individual consumer might see on the open market. Workers will have increased options, while employers can maintain their employees’ status and avoid tax consequences.
  4. Employers must hold themselves accountable. This may seem like a given, but employers who rely on gig workers must have a solid system in place to manage timely payment and benefits administration. For many gig workers — especially those who freelance — the process of tracking down payment can be a part-time job of its own. Most established employers will have a system in place, but if not, it’s worth investing in a transparent, updated online system that shows a commitment to gig workers’ security and financial well-being.
  5. Supporting the gig economy can be a differentiator for your business. The gig economy is a new entity that employees and employers alike are still adjusting to. Although entering or supporting the gig economy can be an initial challenge, the benefits of doing so in the form of increased independence and flexibility for workers—and cost savings for employers—are worth the investment in the long term. The more your business is known to support gig workers, the more attractive you’ll appear to potential employees in today’s competitive labor market.

The workforce continues to change and evolve with more employees crafting together their own unique roles that work for them. In this tight labor market, employers need to meet these employees at the right place, and at the right time in order to attract and retain them long-term. 

Interested in learning more about how you can support your employees for higher engagement and retention rates? Check out our infographic: 

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