Global Trends Emerging from the Growing Gig Economy

While it's projected that one-third of U.S. workers engaged in freelance work last year, some experts expect this number to jump to nearly three-quarters of the workforce by 2020. This has created a “gig economy” where remote workers are increasing in number by the day. These gig workers aren't constrained to just one employer, providing them the freedom they may adore. As it turns out, the growing gig economy is also affecting the world around it.

VoIP Is Becoming Dominant

Voice over IP (VoIP) phone services have been growing in popularity for years, but the rise of independent contractors in the gig economy has made the industry explode. With more people now working from home, the systems are more important than ever.

Between 2011 and 2016 the amount of data used for VoIP calls increased over 7 percent and, eventually, legacy phone systems may become a corporate world relic.

Worker Productivity Increases

Worker productivity has been on the rise lately, in part because remote workers are 87 percent more likely to love their jobs.

What does this have to do with productivity? Studies have proven that happy workers are 12 percent more productive than their office-based colleagues.

Workers Steadily Losing Benefits

Between 2005 and 2015, the percentage increase of remote workers outpaced that of overall employment and the percentage of conventional workers decreased during this same time period. While this may seem great for worker happiness, productivity and related industries, it actually causes difficulty for some employees.

This is because, as Neil Irwin of The New York Times described it, “employers have succeeded at shifting much the burden of providing social insurance onto workers.” When people enter the gig economy, they often do so as independent contractors. This means, at the end of the year, they'll bear the brunt of their self-employment tax, which is in addition to the state and federal taxes they'll have to pay.

In the end, employers avoid paying their share of self-employment taxes, and gig workers face a higher tax burden.

Social Changes for Millennials

More than just technology, employment and productivity have been affected by the rise of the gig economy. In fact, societal aspects are changing as well. Millennials make up an overwhelming number of gig workers these days, but it's important to note that these young adults must engage in different types of socialization.

Typical office banter and social interaction are removed when people work from home. This means an entirely new generation, the largest cohort currently existing, is learning how to socialize in an entirely different way.

Their tactics include working from coffee shops, sharing coworking office spaces, and attending industry conferences and networking events to meet peers. While this may seem like a bit more work than simply sitting down in an office and doing a traditional job, the rate of happy remote workers shows that socialization is possible even when a job means staying at home.

Complementary Industries Evolve and Specialize

The increased number of gig workers, who market themselves and their skills out for income as clients need them, has sparked evolution in industries that support them. One example is HR. Gig workers often don’t engage with a traditional HR department in the same way their office-based peers do. But just like office-based peers, they do do need work-related assistance from time time.

According to PersonnelToday, the HR industry is facing two key issues thanks to the exploding gig economy:

  • The need to shift company culture from the top down management style to an even level playing field based on collaboration, partnership and mentoring.
  • Movement from a performance-management focus based on formal reviews, policies and procedures to a performance culture focused on individuals taking responsibility for their own output.

The current gig economy is going nowhere, and as the number of remote workers increases, companies and industries that serve them will have to evolve to meet new demands. Independent contractors have taken technology, culture and the world by storm, and these gig workers will undoubtedly shape employment's very future.