Global market for gig to go big
Source: People Matters
According to a report by North Carolina-based procurement intelligence firm Beroe, Inc, the global market for temporary labor (currently valued at $463.1 Bn) is expected to grow at a CAGR of 3 - 4 % until 2020, with “major revenue growth” in places like China, Italy, France, Sweden, and India.
The rise of the gig economy is a global phenomenon and has been further amped by the increased use of technology, customers who expect goods and services to arrive faster and employees who seek more flexibly than ever before. While on the one hand, companies need highly skilled professionals for short-term projects to drive innovation and rapid change, workers are looking for work opportunities that offer greater flexibility and variety. This rising trend in the infusion of gig workers has multiple benefits both for organizations as well as employees. Largely, gig work is more cost-effective for businesses, at the same time enables flexibility and freedom of choice for employees.
Gig work also allows for a diverse pool of knowledge to circulate within the organization. As baby boomers approach the time for retirement and seek employment options to stay active with lesser work load, the gig working model allows retaining them as contingent workers with the organization, leveraging their vast knowledge pool to mentor Gen- X, Y, Z and millennials, without holding them back with long-term work commitments and allowing them to work in a less stressful and more comfortable working arrangement, in addition to staying relevant and having work in hand post retirement.
The findings of multiple researches that have been carried out state that the already buoyant gig economy market is only going to get bigger, offering a skills solution that is beneficial to leaders and workers alike.
Current gig scenario
A research by Payoneer, a digital payments provider on the Global Gig-Economy Index revealed that the US has topped the world in the growth of freelance earnings in the second quarter of 2019, with that figure rising to 78% since the same quarter in 2018. Asian gig workers are also quickly catching up, with Pakistan (47%) at the 4th position, the Philippines (35%) at the 6th position, India (29%) at the 7th and Bangladesh (27%) at the 8th position. The report drew data from more than 300,000 freelance workers within the digital payments platform Payoneer’s network. US was followed by the U.K.(59%) and Brazil (48%), which each saw a jump in gig worker earnings over the past year. Other countries in the top ten included Ukraine (36%) at number 5, Russia (20%), and Serbia (19%). Asia, however, recorded the greatest regional growth, with earnings up 138% across four countries. The boost in revenues over the past year is on account of improved perceptions over the viability of such freelance work, as per Iain McNicoll, Vice President and Regional Head for the Americas at Payoneer.
Two in five organizations expect to increase their use of the contingent workforce by 2020, as per an EY report. In fact, one in three employers of 100,000 employees or more expect to use 30% or more contingent workers in the same timeframe.
According to the EY Contingent Workforce Study, on average, by 2020, almost one in five US workers will be contingent - the equivalent of 31 million people.
Currently, in the UK, the number of self-employed individuals has touched a record high of 4.8 million, growing by 28% over the last 10 years. There are similar stories of rapid growth in the self-employed workforce in the Netherlands, Belgium, France and Australia.
What does the future look like?
North Carolina-based procurement intelligence firm Beroe, Inc, published a report stating that the global market for temporary labor (currently valued at $463.1 Bn) is expected to grow at a CAGR of 3 - 4 % until 2020, with “major revenue growth” in places like China, Italy, France, Sweden, and India.
The report cites the APAC region - particularly Singapore and Malaysia - as a prime example of the gig economy already driving market revenue, buoyed by a need for an increasingly flexible workforce and the growing use of online platforms.
Global business leaders forecast a 66:34 split between permanent and temporary workers by 2023, according to a Robert Half research, highlighting the need to learn how to manage the gig talent as it embarks on the next phase in its growth trajectory. Breaking down some of the key factors to enable the gig to big economy, some pointers to look into include:
- Hiring: Companies can either tap into existing labor-sharing platforms and networks or build their own, to take the first step in hiring gig workers. Social media and networking sites such as LinkedIn, Twitter and even Instagram offer tremendous opportunities to gig workers to showcase their skills and gain recognition and credibility in the market. Such social and professional networking websites and applications serve as a meeting place for companies and gig workers.
- Engagement and Integration: Once hired, leaders have to then work on truly integrating gig workers in the company’s culture. For this, they have to break free from the traditional corporate environments and create more adaptable workflows and processes.
Inclusive efforts for gig workers need to be prioritized to enable greater collaboration and a seamless workflow.
- Feedback: For gig workers, in addition to formal monthly/quarterly check-ins, a quick feedback helps bridge the performance-expectation gap.
- Technology: Technology plays a significant role in strengthening the gig economy. With geographical boundaries being blurred as technology advances, it is an opportunity for organizations to tap into the global gig talent pool, allowing the inflow of fresh ideas. It also enables gig workers to tap into the global spectrum of opportunities.
Companies that are thoughtful and diligently work towards in attracting, compensating, and retaining gig workers, and integrating them with the permanent workforce right now, will have a competitive edge and be able to build a massive global network of the gig population for the future.