The Gig Workforce Market in 2022
The characteristics of the modern workforce have been transformed in the last 2 years. While the shift towards a gig workforce had previously been predicted, the pandemic has acted as a massive amplifier. Indeed, the true effect the pandemic has had on the labor market is still yet to be fully appreciated. One trend that has become clear, however, is the shift towards gig working is gathering pace.
Why? Workers are increasingly valuing flexibility and the choice of when and how they do their work over traditional and rigid full-time employment. Moreover, the “great resignation”, and the deluge of job vacancies that have flooded the market, has made it harder than ever for businesses to fill vacancies. We can expect 2022 to be the year post-pandemic behaviors bed down to forge new social habits and a new normal for workforce design. These behavioral shifts are an opportunity for enlightened employers to reimagine the makeup of their employee base and celebrate the individuality of gig workers.
What is a Gig Workforce?
If you’ve ever used an app to call a taxi, booked a holiday home, or ordered a food delivery then you may have had first-hand experience as a consumer in the gig economy. Indeed, the gig economy surrounds us in our daily lives. It’s become essential for day-to-day life. Think about using Uber to get about a cityscape, or using Just Eat to get fed, maybe even Deliveroo to have a parcel delivered. The extension of a gig economy is a gig workforce. Put another way, the people that make up a typical workforce, are now increasingly gig workers, not employees.
A recognized definition of the gig economy is hard to come by. The best answer arguably comes from the UK government. They say the “gig economy involves the exchange of labor for money between individuals or companies via digital platforms that actively facilitate matching between providers and customers, on a short-term and payment-by-task basis.”
The gig workforce is empowered by tech
The key ingredient that allows the gig workforce to function is technology. But more than that, the gig economy itself is supported and accelerated by the rise of technology and customers who expect goods and services to arrive even faster and more reliably. In this sense, the gig workforce can be broken down into individuals providing specific services and skillsets for a predetermined period of time or function. Undoubtedly this is a huge shift from traditional full-time employment where workers are tasked with carrying out a continuous range of roles and functions with no set end date. The disruptive nature of the gig economy is therefore inherent in its definition.
What are the biggest gig-working factors that are going to shift the overall workforce market?
What does this all mean for the labor market in 2022? You may rightly ask. There are 3 key factors of disruption that the gig workforce will bring over the coming year:
1. Huge growth in gig adoption and what it means for the labour market
While the gig economy itself as a concept has been around for the last few years, a huge shift in the proportion of the total workforce has yet to happen. That is, until now. Indeed, in recent estimates, as much as 40 percent of U.S. workers are thought to have joined the gig workforce over the past few years.
Moreover, another study has shown, that the number of people regularly using gig work online platforms has tripled over the last 5 years. Specifically, the research shows that 14.7% of working-age adults, equating to roughly 4.4 million in the UK, were gaining work through gig-work platforms at least once a week. This compares with just 5.8% in 2016 and 11.8% in 2019.
What is less clear is the growth factors behind this massive increase. While it is evident that gig working was on the increase before the pandemic, new acceleration in that growth can also be contributed to the pandemic itself. This can be put down to the twin effect of accelerating the decline of full-time roles in service-based jobs due to international lockdowns, but also the changing attitudes and values of workers in response to the health crisis. This has spawned a greater need for flexibility as well people choosing to pursue opportunities that they had previously put to the back of their minds. The gig economy has provided the perfect landing point for both of these.
2. A huge shift in the acknowledgment of gig economy work and the challenge this presents
The gig workforce has previously been left to near obscurity in the minds of businesses and employers. Many people themselves did not even categorize gig work as genuine freelance employment. However, more recently steps have been taken to properly categorize and respect gig working roles. Most evidently, a McKinsey study categorized gig economy workers into four separate categories:
- Free agents, who choose independent work and derive their primary income from it.
- Casual earners, who use independent work by choice for supplemental income.
- Reluctants, who make their primary living from independent work but would prefer traditional jobs.
- Financially strapped, who do supplemental independent work out of necessity.
While the impact of this categorization might not at first seem significant, the opposite is true. This categorization itself shows that employers are starting to see gig working roles as a supplement and even a replacement for traditional employment; no longer confined to obscurity, the gig workforce is slowly being recognized as the disruptive challenger to traditional employment. This lends the opportunity for gig work not only to snowball in growth but to also change the very nature of traditional employment, as employers must adapt to meet the benefits and features that are driving such a large percentage of the workforce into gig work.
3. How adoption of technology and AI is helping the gig workforce and the companies they serve
The use of technology and AI to create, track and review the gig workforce will explode in 2022. To meet the newly found demands of flexibility and the influx of workers into the gig economy, technology is going to have to get much more intelligent to process the huge amounts of data and jobs. Luckily, gig working platforms are already starting to adopt artificial intelligence to help them track, score, and even review gig working roles that will lead to overall gamification of the market. Here, AI will be able to tell employers what pay rate they should be paying their gig workers for a specific task based on their location and the time of completion. Moreover, gig workers themselves will be able to build up a profile and dataset on these platforms that will promote and celebrate their unique skillset.
Indeed, for millions of people, working 9-to-5 is a thing of the past. The desire for job security in a mundane job has been replaced with needs of flexibility and desires for workers to be their own boss. This will result in the balancing of various income streams job-by-job. Therefore, employers will need to adapt their workforce solutions to cater to the growing number of gig workers. This not only means the adoption of new technologies and AI but also the adoption of new attitudes towards the labor market itself. Gig work is no longer seen as immature side hustles but rather a real threat to the traditional job market. Now is the time for employers to fully embrace and celebrate this opportunity.