The term ‘gig economy’ has become part of our day to day language. Whether you’re taking a taxi from one location to another, working with a contractor to add additional resources to your business or having a package delivered to your home - chances are you are interacting with someone who works gig based jobs.
In recent years this way of working has also begun to receive some heavy criticism. While this way of working gives workers unlimited flexibly and an opportunity to work on a huge variety of jobs, many people have pointed out how a gig based economy comes with a lack of social safety and more job insecurity.
What’s more, businesses working with multiple freelancers often find it difficult to create a coherent team, having to spend weeks considering ways of working, establishing processes and getting people to invest in the team.
However, in order to truly understand the pros and cons of the gig economy, we need to first define what it is and understand its history. In this article we will take a look at the gig economy, where it began, the increasing prominence of it in our society, and how new businesses are making it easier for companies to find flexible teams in new ways.
What is the gig economy?
The easiest way to define the gig economy is to look at how it’s distinguished from traditional employment. The gig economy is a labour market made up of short term work contractors or freelancers, as opposed to permanent jobs.
Unlike the traditional job market, workers employed in gig based jobs will usually work for multiple businesses in a short period of time or even at once.
The gig economy also includes companies where workers can check-in and check-out of working at any time. The most popular examples of services who work with this model are apps such as Uber and Delvieroo.
How long has the gig economy existed?
The term ‘gig economy’ was coined in 2009, and while short term contract work, in the form of temp agencies, has existed around the world since the 1940s, many people credit the internet for the gig economy’s increasing prevalence.
With the creation of Craigslist (1996), Upwork (1999) and Amazon Mechanical Turk (2004) employees were not able to get access to a huge number of short term job opportunities, from in-person jobs to tasks that could be done from the comfort of their own homes.
Today, with the creation of apps like TaskRabbit (2008) and Uber (2010) workers can get access to gigs even faster, anytime and anywhere. (Source)
Today, the gig economy is a huge part of many countries' economies. In the US, in 2022, it made up 5.7% of the country's GDP. In the UK the number of employees employed by the gig economy doubled from 2016 to 2019, totalling to over 4.7 million jobs.
Ride sharing apps have become increasingly popular in the past decade.
While the gig economy offers more flexibility and connectivity for people today than ever before, there is increasing criticism surrounding the uncertainty of jobs and low wages of workers.
This is why many people are now trying to find alternatives to the gig economy which still offer the same flexibility, while also maintaining vital social safety measures for workers. Companies like Deazy have been created to assure the same flexibility as gig based freelance workers, while also ensuring workers have a reliable work pipeline and are paid a fair wage.
While the gig economy offers more flexibility and connectivity for people today than ever before, there is increasingly a trade off felt by businesses who value the flexibility of adding additional skills to their team for short bursts, but want more dependability and the retention of knowledge.
This is why many people are looking at alternatives to the gig economy for flexible resourcing. Companies like Deazy provide the same bursts of work but use developers from a pool of established agencies around the world. This means co-workers can step in to cover the gig if required and knowledge is retained within the agency that developer is placed in.
Learn more about this below!
How big is the gig economy?
According to Trade Union Congress, a UK based workers group, there are around 4.4 million people working for gig economy platforms at least once a week in England and Wales.
The gig economy is also rapidly growing. The number of people who work on a gig economy platform at least once a week has increased from 1/20 in 2016 to 3/20 in 2022. The key services provided by gig workers include delivery, driving, household services and remote digital tasks.
Why is the gig economy growing?
The gig economy is a continually growing sector in many countries around the world. While there are a huge number of reasons for its growth, here are just a few of the most regularly cited:
Cost Effective for Businesses
Cost effectiveness is often the number of cited reasons for the prevalence of gig based jobs. For businesses who need extra hands on deck for short periods of time, it is often easier to hire a freelancer or third party contractor than to hire a new member of staff.
Freelancers give businesses a unique opportunity to work with people who have the skills they need, only when they need them. What’s more, working with a third party contractor or freelancer often comes with tax benefits and cost cutting for businesses.
The agile model refers to a new approach to running businesses, where companies are able to quickly pivot their offerings in order to react to unexpected changes. Over the last few years, the global pandemic, increasing speed to technological advancement, and other factors have made this business model become increasingly popular.
A key way that businesses can stay agile is by choosing to work with third party contractors and freelancers. This means they can maintain a lean in-house team, and ‘plug in’ talent when and where they need them through the use of short term contracts. This means, businesses can easily pivot and restructure their business if unforeseen circumstances call for it.
Increased access to remote working
The global pandemic has also greatly increased people’s trust in remote working. This has allowed people to apply for jobs anywhere.
As more teams begin working in a hybrid or fully remote environment - working with third party contractors in different locations has become more common. With companies creating effective remote working processes, businesses can add extra team members to their business with more ease.
The prevalence of remote working has also given people an opportunity to scout the best of the best talent from around the world regardless of location. With the flexibility of remote working and gig based engagements, businesses can work with the best talent around the world when and where they need them.
Food delivery services, such as Deliveroo and Uber Eats, work with a gig based structure.
What are the pros and cons of the gig economy?
More Flexibility and Variety
For companies looking to engage talent and people working within the gig economy, flexibility is often the most important factor.
For freelancers, being self-employed allows them to pick and choose when they want to work, what projects they want to take on, and how much they want to charge for an engagement. This means their workload can stay exciting and flexible.
For businesses, engaging with freelancers gives them an opportunity to work with talent when and where they need them. A gig based talent pool also gives them access to a wider range of talent, meaning they can choose from more skill sets, experience and expertise.
Access to more opportunities around the world
Working as a freelancer gives people an opportunity to work with top brands, from anywhere around the world. As a short-term contractor, you can apply for jobs regardless of your location.
What’s more, since the cost of living varies greatly depending on your location, working remotely can give freelancers a unique opportunity to offer competitive rates.
Access to a wider talent pool
For businesses, working with freelancers gives them a unique opportunity to work with talent anywhere around the world. Unlike general remote hiring, freelancers often juggle multiple gigs meaning they can flexibly commit to many businesses at once.
This allows businesses to get access to talent who might otherwise be too expensive, too busy or already working for other businesses.
Lack of Strong Team Culture
One of the key challenges of delivering a whole product or long term project using freelancers is creating a team culture. Establishing ways of working, processes which suit each member of a team, and building team loyalty can be a time consuming task.
Businesses will often have to also consider the time it takes to onboard teams. Unlike a pre-established team, such as in-house employees, knowledge transfer, creation of ways of working, and other admin tasks can take weeks or even months to complete with a new team. This may delay projects, or halt new teams adding value to a business for weeks or months at a time.
Furthermore, a team of independent freelancers will likely lack a sense of team culture, and have lower team engagement. This is a hindrance as studies have shown that strong team culture increases employee engagement and profitability.
Less Social Protection
One of the biggest flaws of the gig economy often cited is the lack of social protection for workers if they get ill or can’t work for any other reason. While traditional employment contracts usually provide paid sick leave, travel expenses and pension contributions - short term contracts often exclude these.
These vital benefits are included in long term employment. provide people with an important safety net. The removal of these can put workers in a difficult position if they experience illness or a sudden change in their circumstances.
For a business hiring a freelancer, this lack of protection can also cause issues. Since there are thousands of freelancers available to work for your businesses (regardless of your requirements) it can be difficult to choose the right fit.
If you are working on a time sensitive project with a freelancer, hiring someone who isn’t the right fit, or doesn’t work up to your standards can be devastating for your businesses. Without any protection when it comes to a freelancer completing a project successfully, businesses can lose time, money or even clients if a freelancer cannot complete work on time.
Working on your own can be lonely
As a freelancer or short term contractor, you will likely move from one job to the next every 3 to 6 months. Working primarily on your own without a community of coworkers can be lonely.
What’s more, some freelancers find that this lack of community can affect their motivation. A lack of support through a team can leave third party contractors demotivated.
Without the safety net of a permanent employer, freelancers often struggle to turn down new gigs, even if they lack capacity. Third party contractors also often have to wrestle with client expectations and meet tight deadlines.
It can be difficult to choose to turn new gigs away, even when freelancers are at capacity. Some third party contractors also struggle with managing client expectations leading to long work days to complete projects with tight deadlines.
While being self-employed or working as a third-party contractor does give people more flexibility to set their own hours, this often leads to people working more hours than a traditional job. Furthermore, without a set 9 - 5 routine, freelancers may find themselves working outside of time they have set for themselves to meet client demand.
Many gig based jobs can now be done from the comfort of a workers home.
A new approach to the gig economy
As criticism towards the traditional gig economy model mounts and government pressure on contractors such as the UK’s IR35 law makes freelancing and gig based work more difficult, businesses are trying to find a new solution.
This is where companies such as Deazy can help. Unlike traditional freelance agencies, Deazy pre-vets full teams and development houses, working with the developers employed by these agencies. This gives Deazy’s clients a unique opportunity to work flexibility with tech talent who are part of an established team.
Why full teams?
Working with existing development houses and businesses, gives you unique access to flexible development talent, who have a pre-established internal culture. What’s more, hiring through an existing development team means you can be assured that your developers have appropriate social protection and a reliable work pipeline.
When working with multiple freelancers, businesses often have to spend a long period of time creating ways of working, processes for successful delivery and team culture. Deazy gives you access to multiple developers from one team, or developers from multiple teams who work in similar ways, ensuring you can quickly and successfully onboard full teams.
Start saying yes to more opportunities
Unlike freelancing agencies, Deazy’s limitless ecosystem gives you access to a huge range of talent from 60+ teams, specialised in 60+ tech stacks. This means you can say yes to more opportunities for digital innovation and don’t have to worry about the tricky decision of hedging your bets against one tech stack.
Less pressure on finding and vetting the right talent
Working with pre-vetted teams allows you to find talent who have already been screened for their culture, comms, and technical knowledge. This means you don’t have to spend time on lengthy due diligence processes to screen development houses or individual developers.
Deazy also helps you mitigate the risk of working with nearshore teams. We believe in the quality of our developers, which is why we will replace any devs you are unhappy with during their probation period.
Deazy also helps mitigate the risk of working with nearshore teams, allowing you to swap out contractors if they don’t suit your style of working.
Pre-established team culture
Unlike creating your own team with multiple freelancers, hiring flexible talent from existing development houses gives you access to a company’s tried and tested delivery method. This means you can plug in developers who have an established way of working and a strong team culture.
When finding you developers, our delivery team takes into account your preferred ways of working, meaning we find developers who like your style of working. Many of our delivery partners also have experience collaborating with each other. This means they can easily begin working as one cohesive team regardless of location, project length or engagement model.
Deazy’s delivery partners are also responsible for finding replacement developers, if their placement is unable to continue a job. Unlike working with freelancers, where contractors can often choose to cancel a contract anytime, Deazy’s flexible solution ensures that your placed developer will be replaced without any extra cost.
Deazy’s delivery oversight team offers an extra layer of support to help ensure successful delivery. Our in-house team has experience working with each of the development houses in our ecosystem, meaning we can help you delegate tasks to the developers best suited for each job.
With decades of experience across dozens of industries, our team also gives you a great first point of contact for all questions, changes and escalations, if and when you need.
The Same Flexibility
The Deazy solution is able to offer you the same flexibility as working with freelancers, while drastically reducing the cost, time and risk usually involved in hiring third-party contractors. Deazy’s model gives you a unique opportunity to flex developers up and down whenever they are needed.
Furthermore, with existing processes for onboarding and knowledge transfer, you can start working with new team members in as little as 2 weeks.
The gig economy has given companies an opportunity to run in a more agile, flexible and cost effective way. However, with mounting criticism against this way of working, such as the rights of workers, a lack of strong team culture, and long vetting processes, businesses are looking for new solutions.
This is where companies like Deazy can help. By giving you access to existing development teams who can engage with your projects flexibly, get access to the best nearshore talent and reduce onboarding time. Deazy’s automatic substitution of developers, means you can also be assured that a project will never fall through again.
With the help of pre-vetted development experts and teams, you can deliver your ambitious digital transformation roadmap, while also remaining flexible.