Between 20 and 30 percent of people in the US and Europe are working independently, according to a new McKinsey Study. In fact, McKinsey go a step further to claim that between 30 and 45 percent of the working age population around the world is unemployed, inactive or working only part-time. So why is the term Gig Economy still relatively unknown in large parts of business circles?
The Gig Economy, according to the Financial Times, can be defined as working individuals who provide services to an organisation for a certain amount of time, gradually shifting away from being labelled as a traditional, contracted employee - of which is generally done through a platform or marketplace of some sort.
In this blog, we look at a few varying shapes that the so-called Gig Economy has taken across the world to date.
According to the On-Demand Economy Group, the On-Demand Economy, also known as the Gig Economy, can be defined as, “economic activity created by digital marketplaces that fulfil consumer demand via immediate access to and convenient provisioning of goods and services.” Business Insider warrants the massive rise of the On-Demand Economy to rapidly changing consumer behaviour. “Immediate access to messaging, e-mail, media, and other online functionality through smartphones has generated a sense of entitlement to fast, simple, and efficient experiences.” It’s about wanting something, and getting it now.
The Sharing Economy, also known to many as the shareconomy, collaborative consumption or peer economy, is an umbrella term which is often used to describe economic and social activity involving transactions within a hybrid market model. A somewhat contentious term, the Sharing Economy traditionally grew out of the open-source community where goods and services were shared amongst peers. In the present-day, the sharing economy merely refers to the ability to source what you need from a peer, as opposed to being solely reliant on the provision from larger organisations.
Wikipedia describes the definition of the word Access Economy as a “business model where goods and services are traded on the basis of access rather than ownership: it refers to renting things temporarily rather than selling them permanently”. Slightly different to the defined Sharing Economy, the Access Economy referred to an economic agreement whereby goods and services were traded fairly, as opposed to more commercially-heavy definitions of the Sharing Economy where access to a service is purchased.
The concept of a trust economy has also emerged as a state of mind, rather than a state of economy. Tech Crunch described it perfectly, “As we get into cars with complete strangers, sleep in the beds of people we’ve never met and lend money to others on the other side of the world, a powerful new currency is emerging — and it’s based on trust.”. The notion of the emergence of a Trust Economy is one that sees businesses, more and more, relying heavily on online marketplaces in order to make fundamental change, and see immediate progress, within their organisation.
An online marketplace can be described as an e-commerce platform that allows for the online trade of goods and services. Traditionally started as the trading of goods, such as eBay, Amazon and Alibaba, the online marketplace has diversified to now also include the trade of professional services such as Freelancer, blur Group, Fiverr and more. Such is the rapid growth of Online Marketplaces, and specifically online talent platforms, that McKinsey predicts that the rise of these talent platforms and this new way of independent working could boost global GDP by $2.7trillion by 2025.
So just what is the commonality that brings all these various elements together under one Gig Economy hat?
- Work within the Gig Economy is usually acquired, resourced and sometimes delivered, through an online marketplace or platform of some sort.
- These online marketplaces usually aim to seek out the most qualified, relevant service providers to satisfy a work requirement.
- The Gig Economy usually steers heavily away from traditional hierarchical hiring structures which now includes a new, contingent workforce who becomes as much part of the organisation as a permanent employee is.
- The realisation by organisations and individuals that the world of work is rapidly changing and in order to succeed and cater for a new generation of working, businesses need to adapt or risk falling victim to stubborn, unchanging organisational strategy.
What we do know is that organisations actively using online talent platforms to identify and recruit candidates and to source solutions for their internal business requirements, could increase their output by up to 9 percent and reduce the cost of recruiting talent and of human resources generally by as much as 7 percent.
Isn’t it time that you take your first step towards a new way of working? Talk to us today about how we can help.
About the AuthorMore Content by Katy Roberts