Many people are opting for freelance, flexible, on-demand work instead of steady, full-time employment.
The impact of the gig economy is still poorly understood, even though the labour market continues to adapt to the new global, digital marketplace.
Muhammed Goolab, executive committee member of the South African Rewards Association, said that there are both advantages and disadvantages to participating in the gig economy.
“The gig economy is a system that rewards people per task or gig in smaller increments than salaried employees. ‘Giggers’ would need to understand the demand for their particular job in the market and what that job would typically be priced at. Negotiation is a two-way discussion, framed by affordability and economic conditions,” said Goolab.
Some online platforms such as Uber allow participants to choose the jobs they want and at the rates they are prepared to work for. Problems, however, may arise when many people start offering your skill at a lower price.
“The challenge with pricing jobs in the gig economy is that technology allows for thousands of entrants to compete for jobs. In cases where there is a dramatic increase in the supply of people willing to do a job, there will be a massive decrease in rates of pay. This can have detrimental effects on pay and it opens the possibility of exploitation,” says Goolab.
The “real money” in the gig economy, said Goolab, lies in the ability to provide specialist skills that support industry disruption, innovation or growth in a digital economy.
Foregoing rewards and stability for flexibility and freedom
Despite the risk of being outpriced in certain industries, the gig economy provides an earning outlet for anyone who requires greater flexibility in their lives.
A retiree who wants to increase the longevity of her work life with the benefit of being able to work beyond her retirement age, or a graduate who wants to do freelance work while travelling instead of pursuing a 9-5 job are all prime examples of those who may opt to achieve their lifestyle goals through gigging. To achieve this lifestyle, they would typically sacrifice on the benefits that permanent employers offer, such as a pension, medical aid contributions and job security.
“It is just as important for ‘giggers’ to keep an eye on their savings and retirement, despite the perceived ability to work beyond retirement constraints. ‘Giggers’ should also consult a financial advisor and keep track of their financial security,” says Goolab.
A satisfying but sometimes stressful life
Although participants in the gig economy sacrifice many benefits that a salaried employee would normally receive along with a certain amount of financial security and income predictability, surveys show that gig economy participants have higher levels of job satisfaction, which is generally linked to the flexibility that the gig economy provides.
“The key to success in the gig economy is building good networks and demonstrating a good and reliable service. This will help you build credibility for repeat work opportunities,” Goolab concluded.