How the Gig Economy Will Impact the Future of Work

The gig economy is the new trend that has gripped the labour market because of its benefits. Many skilled professionals opt to work as freelancers or independent contractors because of the popularity of remote work. Traditional employment is losing its charm for young professionals who want to become financially independent and choose their body of work. They work on a contract basis with several companies instead of sticking to one organisation for a long time.

The gig economy has become prevalent after the pandemic because workers do not want to go through the same corporate grind. Also, several organisations are known to create a toxic work culture that stresses employees and impacts their mental and physical health. The opportunity to work on their own terms makes several talented professionals pick the gig economy to earn a substantial income. Here is how the gig economy's growth will impact the future of work. It will help entrepreneurs understand the shift in the labour market and work around it to build a talented team.

1. Growth of the Gig Economy in the UK

The UK Government recognises the gig economy as offering time and skills to a third party through online platforms for paid employment. Although the number of workers in the gig economy is small, the interest of skilled professionals in this type of employment is growing. According to a recent report, only 1.4% of the total workforce in the United Kingdom is participating in the gig economy as a side hustle or primary employment.

The jobs that these workers most commonly take up include web development, food delivery, legal consultation, plumbing, electrical service, dog walking, etc. Most of these workers are highly satisfied with their work commitments found through apps and websites, even though they are not paid highly. However, the income depends on the kind of services the worker provides.

2. Impact of the Gig Economy on the Labour Market

It is estimated that the gig economy will contribute £63.25 billion to the economy by 2026. Thus, aspiring entrepreneurs who have purchased a business for sale United Kingdom must be prepared to adopt the new recruitment policies and work arrangements. The labour force will opt for contract-based projects and freelance work instead of staying with the same company until retirement. It will require regular hiring of independent workers to continue with timely deliveries.

Also, businesses must identify talented candidates for different tasks to satisfy customers. Thus, there will be less number of full-time employees in the workplace and more remote workers. Entrepreneurs must pay attention to their management and collaboration through digital tools and software. Thus, they need to improve the infrastructure for this type of labour force.

3. Advantages of the Gig Economy for Businesses

The gig economy labour force is quite affordable for businesses because they do not have to pay pensions and National Insurance Contributions or sick leave to the freelancers. In addition, they do not have to spend on leasing a big office space, amenities and utility bills since the labour force will be working remotely. It can help them go green.

They can hire these workers on demand from a vast pool of candidates without geographical barriers. It increases the probability of finding talented workers at affordable salaries for specific projects. Thus, entrepreneurs looking for business opportunities in the United Kingdom with limited resources can benefit from the gig economy to scale up quickly.

4. Benefits of the Gig Economy for Workers

The labour force can enjoy an excellent professional tenure with the gig economy as it offers flexibility to choose the company and work hours. They are not on any organisation's payroll, which allows the perfect work-life balance. They do not have to search for work and can easily find projects online. They can grow their network to find contract-based work and build a solid portfolio.

Another advantage of the gig economy is that it can be used as a side hustle by working professionals to earn an extra income. They can leverage their passion to grow as freelancers and make it their primary source of income. They can choose from a wide range of work that keeps them satisfied and inspired to find more assignments.

5. Disadvantages of the Gig Economy for Businesses

Entrepreneurs who purchase businesses for sale United Kingdom or have a start-up must be aware of the downsides of the gig economy. They must be prepared to feel the heat of this alteration in the labour market that reduces the workers' loyalty because they work independently with several companies. Maintaining a cohesive and cooperative relationship with the workers is challenging since they work remotely.

It can be hard to deliver the work on time from contract-based workers because they are not on the payroll. They might feel that they are not accountable to their employers and have several deadlines coinciding on the same day. Also, there is the risk of confidential business information getting leaked to competitors through freelancers. In addition, they might be doing the work as a hobby or as a second income, which can reduce the quality.

6. Drawbacks of the Gig Economy for Workers

The labour force can enjoy ample freedom and flexibility with the gig economy but cannot run away from its shortcomings. A freelancer or contract worker does not have any employment rights like pension and sick leave. They also have to face periods without work when they may not get required projects. It can affect their financial status, and they opt for low-paying contracts.

Many workers in the gig economy feel isolated while working remotely, which reduces interaction and collaboration. It can affect the quality of their output and lead to mental stress and frustration. Also, they may find it hard to sit down and work from home because of the distractions around them.

7. Overcoming Challenges of the Gig Economy

Embracing the gig economy can be difficult for aspiring entrepreneurs who buy a business for sale United Kingdom. They must have the technology to maintain collaboration and communication with the remote workers. They must use project management software and high-speed connectivity to streamline the workflow and make it time-bound.

Since finding talented candidates from the pool is hard, employers must screen their portfolios and speak to other employers and references. The payment terms and amount must be negotiated before signing the contract and should not be changed during the contract period. Businesses can create a repository of freelancers with satisfactory work and choose them for new projects.

Wrapping Up

The gig economy is not new since freelance work has been around for several years. The change is that many young professionals follow this work arrangement to grow and leverage the comfort of remote work. Technological advancements are also supporting its growth. Thus, businesses should be aware of its impact on the future of work.