The Gig Economy is also known as a freelance economy, an agile or independent workforce and a sharing economy. At its essence, it is a labour market that has moved away from traditional employment models and become more fluid. Once understood, and with the correct partner, the gig economy can be leveraged to advantage a company on multiple fronts.
What is a Gig Economy?
The term “gig” in the context of the “gig economy” comes from the world of music and entertainment. In the entertainment industry, a “gig” has traditionally referred to a single performance or job engagement, such as a musician playing at a concert or a comedian performing at a comedy club.
The concept of the “gig economy” emerged as a way to describe a labour market characterised by the prevalence of short-term, temporary, or freelance work arrangements, where individuals work on a project or job basis rather than holding traditional, long-term employment.
This means that the employment market relies on securing the services of skilled Freelancers/Contractors to take up the available temporary or contract posts. The gig economy is driven by online platforms and technology. These make it easy for people to advertise their services and apply for jobs. And consequently, for companies and recruitment agencies to access top talent for specific tasks.
Who Benefits from a Gig Economy?
The gig economy has inherent advantages and disadvantages. For example, it promotes flexibility and independence. However, it does not offer true job security or employee protections. Essentially, the gig economy has pros and cons depending on what you’re specifically looking for as an employer or employee.
Employer Benefits of a Gig Economy
- Save money by only filling a position when and for as long it’s needed.
- No need to pay benefits, e.g.: health care, sick leave, or vacation.
- Ability to quickly scale up or down operations.
- Around-the-clock service.
- Strategically access skill sets and top talent.
While there are benefits there are also some drawbacks for companies that seek to use the gig economy. Thus, depending on your company’s needs and structure the pros and cons of accessing this type of labour model need to be weighted up.
Some of the disadvantages that need to be considered are the potential legal challenges of using self-employed personnel. A second possible shortcoming of the gig economy is that a short-term contracted employee is likely to always be on the lookout for their next job. The risk here is that should a better opportunity present, the freelancer might move on before completing the job. However, these challenges are not insurmountable. The easiest way to circumnavigate these risks is to work through an experienced recruitment agency such as the Key Recruitment Group.
How Does Gig Economy Work
The gig economy started with lower-skilled workers. Due to its advantages, it has over time grown to incorporate top talent. Consequently, there is a range of expertise and quality of services provided through freelance and contractor offerings.
When using freelancers and contractors, doing a robust background check is particularly important. This enables you to assess if they are reliable and how likely they are to successfully deliver the required services.
How to Thrive in a Gig Economy by Recognising Top Talent
- Vet potential freelancers by asking for qualifications, looking at portfolios and contacting previous employers.
- Only look at relevant and specialised skill sets that will benefit your company.
- Ensure that they have good communication skills.
- Test to see if they are proficient in using your company’s platforms.
- Discuss timeframes and expected deliverables to see if they match the project’s requirements.
Many freelancers enjoy the variety of work, autonomy, and flexibility of not being full-time employed by one company. However, retainers are often appealing as they provide security and therefore worth considering if a particular freelancer is a good company fit. An additional way of working on a longer-term basis with an individual is to explore options like performance-based pay incentives.
Africa’s Gig Economy
Throughout Africa, there has been an exodus from traditional employment to “gig work.” Given the security that traditional employment offers this might seem surprising. One of the primary reasons for this shift in employee focus is the high rate of unemployment. Africa’s unemployment rate is 7.7%, accordingly, there are approximately 112 million people who don’t have a job. Thus, the move towards a freelance and contract employment approach enables younger people to get work experience and the unemployed to access income streams when permanent positions aren’t available.
A survey found that the African gig economy has a growth trajectory of 20% per annum, which by 2030 will result in 80 million gig workers. It’s therefore likely that in Africa the gig economy is the future of work.
Gig Economy in South Africa
South Africa is similar to the rest of Africa in relation to unemployment and job opportunities for young people. In the first quarter of 2023, the country’s unemployment rate was reported as 32.9%. This means that the gig economy provides a viable employment opportunity for many by providing access to global job platforms. Already it has been reported as a mechanism that’s helping to relieve unemployment stress in South Africa
The traditional economy has long serviced South African industry. The roots of the gig economy can be traced back to informal and flexible work arrangements. For example, seasonal farm workers, artisans, and old-style trading. After the pandemic and within an increasingly volatile economy, the pace of change of the employment landscape has increased. This has resulted in an upsurge in those seeking to work within the gig economy.
3 Advantages for South African Gig Workers
- A broader range of opportunities to earn money.
- Ability to be self-employed.
- Enables work flexibility.
Ready to Participate in the Gig Economy?
There are risks to seeking employment online and employing someone via digital recruitment. However, not being willing to take on the risks does not preclude you from accessing the advantages of the gig economy. By taking a strategic approach and working through a recruitment agency, an extra layer of protection is added to processes. The Key Recruitment Group enables collaboration between freelancers and companies with the advantage of providing a higher level of safety and security for employers and employees.
The Key Recruitment Group facilitates both job-seeking and hiring processes. Some of the services offered are insight into job specs and advertising, finding, matching, and vetting candidates and companies, contract negotiation and employee payrolls. For more information and a complete bouquet of specialised services, contact the Key Recruitment Group today.