Risks And Challenges Of The Gig Economy
The Gig Economy is also referred to as “side hustle” and has been growing a lot faster than traditional work. According to the Department of Labour projections, the portion of gig economy workers will increase in 2020 which could be due to more people turning to digital communication technology to cope with the threat of COVID-19 or the “New Normal”.
Freedom, flexibility in work time, room for enhancing skills, and the variety of work available, are some of the benefits of being part of the gig economy. However true this seems to be, there is always a counter risk and challenge when you opt to be a freelancer.
Win-Lose Profitability
For businesses, hiring contractual workers is an advantage. In a survey conducted by SurePayroll in 2013, of small businesses nationwide, 22% of small business owners were more likely to hire an independent contractor than a full-time worker. But why? Because hiring gig employees that are equipped to do a task and provide their own materials for that job are cheaper and often more focused than those of traditional employees where training and resources would be necessary. However, this is not always the situation for all businesses. For freelancers, one of the challenges posed in the gig economy is the idea of earning lots of money. Yes, you can earn but you need to invest first in yourself to gain future potential clients.
In theory, gig work is tailor-made for virus panics, or any broad economic swing. Proactive independent workers can move from one working relationship to another, with only a phone and an internet connection, as tools of the trade. For all that, it is also important to note that in this trying time, a lot of people have turned to freelancing to survive.
Competition
When there’s high demand, competition also rises. One of the challenges in the gig economy is intellectual threat among skilled freelancers. There is always a need to do better and provide the best quality to clients and gaining trust is not an overnight job.
In addition to that, although freelancers are independent and have the choice of their preferred projects it also comes with fewer job protections and opportunities.
Fewer Opportunities
A contract job is a part-time employment opportunity that guarantees no extra benefits (e.g. health care, commissions, bonuses) to its employees. You are on your own, meaning you pay for all your benefits. This is maybe the biggest disadvantage as we all want to have some kind of security in our retirement.
There are other negatives in the gig economy however, there is no denying that being a freelancer provides an individual more time to do other things aside from working to earn money. Like any work, the gig economy has its own share of advantages and disadvantages too. It is important to surround yourself when you are starting out as a freelancer with experienced and knowledgeable people to boost your career in the gig economy.
There are websites, networks and social media groups that you can join, learn from and socialise with in order to learn how to get the most out of your new chosen career path.
