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A Mixed Bag: Navigating the Ups and Downs of the Gig Economy

A Mixed Bag: Navigating the Ups and Downs of the Gig Economy
Credit: Gaudi Labs/Shutterstock

The rapid rise of temporary work arrangements, collectively known as the gig economy, has offered people flexible working arrangements and a way to make extra money with the push of a button. This rising sector of the American economy has been lauded and denounced with equal fervor: Proponents say the gig economy creates additional opportunity, while detractors claim gigs represent a specific type of exploitation.

Regardless of perspective, gigs are disrupting longstanding industries and changing the relationship between worker and employer. As the gig economy becomes more prevalent and spreads across more industries, the waters have become muddier. Here's a look at what the gig economy means for workers and companies as well as how to land a "good gig."

Gig work comes with a set of pros and cons for workers. To start, gig workers benefit by gaining more latitude over their schedule and the type of work they create. That independence is refreshing for some workers, said Steven Soares, senior vice president of technology at professional staffing service KForce.

"For those working in the gig economy, this lifestyle provides more flexibility in that those working a 'gig' can work where they want, how they want and when they want," Soares said. "This appeals to many, including our large millennial workforce."

The other side of the coin isn't so glamorous. Gig workers also run the risk of inconsistent employment, meaning they must either chase down their own freelance work or hustle in the on-demand space. [How will automation impact workers in the gig economy?]

"When working in the gig economy, sometimes you do not feel the stability that you have if you were to work for a company," David Zamir, founder of home service gig company Nana.io, said. "You do not know if you will have daily jobs, and this uncertainty is not for everyone."

Another drawback, Zamir said, is that gig workers have to keep track of their own taxes.

For employers, the gig economy is also a hit or miss opportunity. On one hand, the benefits of using freelancers are plenty, said Satya Kothimangalam, founder of ZAG Studios.

"I've had great success with hiring freelancers for various parts of my projects," Kothimangalam said. "I regularly work with an editor, virtual assistant and transcriptionists, and I hire other people as projects come up. It has made me a lot more efficient, and I've also created processes with my staff to ensure that new freelancers can be on-boarded quickly and efficiently."

Kothimangalam said some of the most notable benefits of leveraging gig labor are:

  • Lower cost freelancers compared to local workers
  • Working with multiple, specialized freelancers
  • Hiring people in different time zones for around the clock work
  • The ability to scale easily as business grows

However, Kothimangalam said, it's a mixed bag, especially when it comes to reliability and project completion.

"It's difficult to find reliable freelancers who can keep up a high quality of work," she said. "They also have their own preferences, so they might change their area of focus midway, and you'll need to find a new person."

Some workers have struggled with finding a "good" gig – one that includes fair compensation and a potential pathway to full-time employment.

According to Zamir, there are several ways to identify and differentiate a good gig from a "bad" or dead-end one. By keeping an eye out for these signs, gig workers can latch onto a company that not only takes care of them in the short term but possibly opens up opportunities for advancement and more freelance work down the road.

  • Find a company that offers full-time conversion: "There's little incentive to stay with a company if they only offer small bonuses for particular gigs … without any benefits," Zamir said. "Aim for a company that rewards expertise with full-time positions later down the line."
  • Aim to be treated like an employee, even if you're a contractor: "Just because you're paid gig to gig doesn't mean you have to settle for an employer that doesn't care about you," Zamir said. "Look for companies that make gigs easier."
  • Bigger isn't necessarily better: "Smaller companies can provide a personal connection that's sorely lacking in Goliath companies like Handy or Uber, which, conversely, allow you to earn more per gig," Zamir said.

"[Gig companies] will disrupt assumptions about what work is and where it will take place, but at the same time, will create new opportunities," said Louis Hyman, professor of history and labor at Cornell University. "When industrial jobs came [about], we also struggled over how to turn those … into 'good' jobs. Hopefully this time around, we will not take a hundred years but instead recognize the opportunities."

Adam Uzialko

Adam C. Uzialko, a New Jersey native, graduated from Rutgers University in 2014 with a degree in political science and journalism and media studies. He reviews healthcare information technology, call centers, document management software and employee monitoring software. In addition to his full-time position at Business News Daily and business.com, Adam freelances for several outlets. An indispensable ally of the feline race, Adam is owned by four lovely cats.