The widespread adoption of digital technologies and increased internet access has given rise to innovative forms of economic activity commonly referred to as a ‘gig’ economy or ‘digital work’, ‘online outsourcing’ and ‘virtual work’.
It is based on this development that ‘gig’ is known as a one-off job for which a worker is paid for a particular task or for a defined period. The gig economy matches providers to consumers on a gig (or job) basis in support of on-demand commerce.
The supply (gig worker) and the demand (business or person seeking for job done) link up through either a mobile app or website.
There are various types of gig jobs as identified below:
–Location Based Gig Jobs: A digital platform assigns tangible tasks that require physical presence such as transport, delivery, domestic care and home maintenance services, which are fulfilled at a client’s location.
–Online Gig Jobs: This include tasks such as data entry, research and script-writing, website design or software development that are performed and delivered online by the gig worker.
–Microwork: This involves projects or tasks that are broken down into small subtasks that can be completed in seconds or minutes by remote workers through online platforms.
–Online Free Lancing: Often called e-lancing tends to involve larger projects that are performed over longer times; which typically includes complex tasks targeting more intermediate or high-skilled workers such as software development, graphic design and digital marketing.
In recent years, the gig economy has emerged as a significant force profoundly shaping the modern global workforce. Some countries have started tapping into the advantages provided by the gig economy. In Malaysia, the government has introduced a digitV al Malaysia Strategy to support the gig economy.
In the same way, the Nigerian government launched the Naija Cloud initiative while the Kenya government launched Ajira. Indeed, Ajira Kenya is a digital platform to empower the youth by providing them with online work opportunities, skills training and mentorship.
Drivers of the Gig Economy
Indeed, the gig economy is transforming the way we think about employment. It is characterized by short-term contracts or freelance work as opposed to permanent jobs. Many people are turning to gig-based jobs to supplement their income or even as their primary source of livelihood.
It opens doors to new opportunities for professionals looking to balance work and life on their terms. This allows them to diversify their skills and experiences, which can be advantageous in an increasingly competitive job market. Other reasons for the rise in the gig economy include:
- Leveraging Technology
It is worth reiterating that the rise in the gig economy is attributable to technological advancements that connect workers with employers. Thus, it makes use of the internet to match the demand and supply of work and services.
Equipped with numerous digital tools, gig workers can acquire skills in industry-specific software, independently manage projects and develop expertise in digital marketing strategies all of which are highly sought after across various industries. For workers, particularly young people, online work provides a low-barrier-to-entry opportunity to earn an income, while building their skills and digital work experience.
- Flexibility and Autonomy
One of the most attractive aspects of the gig economy is the flexibility it offers. It provides opportunities for workers to choose when and where they want to work as well as how much they willing to charge for their services.
Hence, it is reasonable to say that gig workers have the freedom and choices of flexibility that a conventional job would not provide. More so, the gig economy provides businesses and consumers access to low-cost on-demand labour. This flexibility can be a game-changer.
Flexibility to businesses may be functional, numerical or financial. Financially, businesses can profit from flexible working arrangements and allow them to easily adjust wages. Businesses can hire gig workers because it provides more flexible costing options such as ability to pay per task or per hour of work than traditional employment.
From the numerical perspective, the short-term assignments allow companies the flexibility to easily meet the changing demand for labour. That said, it functionally allocates different types of tasks across the available workforce.
- Resources Management & Economic Inclusion
For SMEs, the gig economy presents a source of labour poll for the recruitment of a diverse pool of flexible workers. Small and Medium-scale enterprises (SMEs) do not need to provide freelancers with digital equipment as they would with traditional or full-time employees. In that regard, SMEs avoid fixed costs of equipment.
The gig economy provides an avenue for an economic inclusion especially in the underserved sectors of the general economy. Some gig workers earn a commission based on the nature of the job and can be engaged to take goods and services such as selling insurance products to help in achieving economic inclusion.
- Entrepreneurial Growth
The gig economy often encourages entrepreneurial spirit. Gig work offers aspiring entrepreneurs, a valuable opportunity to validate ideas, develop business skills and build a client network, all with relatively low upfront costs. For example, freelance writers or digital marketers can establish themselves as experts in their fields by building strong portfolios through gig work.
Over time, they can leverage this experience to grow into full-fledged businesses. The gig economy, therefore, fosters a sense of independence and self-reliance that is highly beneficial for those looking to start their own ventures and access clients across the globe thereby expanding their market reach. It is worthy to note that workers with specialized skills, deep expertise or in-demand experience are the ones who win in this economy.
Challenges in the Gig Economy
The gig economy spans multiple industries and offers workers a wide range of options. Despite the advantages, the gig economy activities carry a number of risks and can lead to increasing casualization of jobs.
a). Competition and Market Saturation
With the rise of platforms that offer gig opportunities, the level of competition among workers has also increased. In highly sought-after fields like web development, graphic design and content creation, standing out from the crowd can be difficult.
To succeed in the gig economy, workers must constantly upgrade their skills and market themselves effectively. Moreover, with so many workers entering the gig economy, the oversupply of labour in some fields can drive wages down. Workers may need to juggle multiple projects to maintain a steady income which can lead to burnout if they fail to effectively manage their workload, time and personal energy.
b.) Occupational Vulnerability
The occupational challenge of gig workers refers to the difficulties they face, much like entrepreneurs. They have periods of good times and bad times. Gig workers are vulnerable to the economic and social demands of providing their own tools and equipment.
They are also prone to the demand for work from clients. Gig workers are also vulnerable to health risks stemming from the psychological strain of unstable work, as well as the lack of access to health and social insurance, collective bargaining and other benefits typically enjoyed by permanent employees.
c.) Isolation and Work-Life Balance
Due to the nature of gig work, which often involves working remotely or off-site, freelancers are usually excluded from office or social events of the employer. Gig workers are prone to exhaustion and burnout from consistently working extended hours due to pressure to meet client demands.
This is also due to the stress of looking for the next project to ensure a continued flow of income unlike the traditional form of employment which tends to be steady and secure. As a result, it is crucial for those entering the gig economy to establish clear boundaries, prioritize their well-being and cultivate a support network of peers or mentors to maintain connections and receive guidance.
Recommendations
The gig economy is a rapidly growing sector and offering numerous opportunities for entrepreneurs and workers seeking flexible employment opportunities. It is therefore necessary to address the inherent challenges with appropriate policies. Government needs to play a role in the gig economy because it is going to keep growing.
A standardized policy should be implemented by government agencies to provide clarity as many people currently have limited understanding and interaction with the gig economy. A coordinated policy in that regard must highlight the need for greater awareness and guidance.
A gig worker is an independent contractor and therefore needs a legally binding contract with a favourable condition to protect themselves. That aside, many gig workers develop a strong affinity for the companies they work with and ultimately deciding to establish long-term relationships and pursue growth opportunities within the organization.
Based on this, businesses can leverage on such relationships and enter into a regular employment with the gig worker. Regarding gig workers in full entrepreneurship, they need to charge rate or fees that enable them to subscribe to social insurance schemes and related benefits.
Conclusion
It is imperative for government and other key stakeholders in the general economy to harness their resources and explore the benefits of the gig economy. Issues relating to job retention, skills transfers and development should be addressed to make the gig economy more viable. Government will also need to improve access to digital infrastructure and use the potential of digital gig work to build human capital especially for the youth.
BERNARD BEMPONG
Bernard is a Chartered Accountant with over 14 years of professional and industry experience in Financial Services Sector and Management Consultancy. He is the Managing Partner of J.S Morlu (Ghana) an international consulting firm providing Accounting, Tax, Auditing, IT Solutions and Business Advisory Services to both private businesses and government.
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