If you’re anything like most professionals, you’ve heard of the gig economy, but you don’t know exactly what it means for your business.

This new term is the latest entry in buzzword bingo, and it describes an emerging labor market characterized by the prevalence of temporary freelance or contract work instead of traditional full-time employment.

So where does the term “gig economy” come from? “Gig” refers to the slang term for work often used by musicians, actors and comedians, as in, “I’ve got a gig singing at the club tonight.” The gig economy is representative of an entire market segment of people earning a living through these one-off jobs, or “gigs.”

The Growing Gig Economy

The gig-based labor market is expanding at a rapid pace. From 2014 to 2016, the number of Americans doing freelance work grew by 2 million, from 53 to 55 million. That’s 35% of the U.S. workforce, and by 2020, it has been estimated that more working Americans will be freelancers than not.

And while the U.S. Census Bureau doesn’t officially recognize “gig workers,” since 2003 it has tracked a category known as the nonemployer worker. This is someone who is self-employed and operates a small, unincorporated business with no paid employees – such as a freelancer or an independent contractor.

Since 2003, the popularity of the nonemployer worker has grown in all industries. In the professional, scientific and technical services industry in particular, the number of workers in this category grew by almost 600,000 between 2003 and 2013.

What It Means for Businesses

It’s clear that there’s a brand new segment of talent ready and eager for more flexible work, and today’s businesses are starting to leverage this growing on-demand workforce at an unprecedented rate.

According to the Aspen Institute’s Workforce of the Future study, 60% of companies now use on-demand or contingent workers, and 70% of employers predict that more companies will move toward a gig-based labor model in the future.

Utilizing contract, freelance and on-demand workers poses a number of benefits for businesses, including less overhead, faster turnaround times, and, believe it or not, greater employee satisfaction. According to a study from Freelancers Union, 79% of freelancers say this type of work is better than a traditional job, and 63% switched to this type of work by choice rather than necessity.

Action Items for Your Company

So as a business, how can you start taking advantage of the growing gig economy? Here are a few suggestions to help you get started:

1. Know the value the gig economy can provide.
   From engineers and developers to content and data specialists, there are a variety of experienced professionals looking for work in the gig economy. Whether you need skilled or unskilled labor, nearby or remote, online talent marketplaces now make it easy to find freelancers for any sort of project.
2. Assess your current staffing needs.
   Assess your current open positions to see if freelance or contract workers could fulfill your needs. A simple analysis will reveal if investing in an independent professional is more cost- and time-effective than hiring a full-time employee. With proper training and a good on-demand workforce partner, you can even develop a transition program to move your current employees to a more flexible workforce model.
3. Grow with the gig economy in mind.
   As your company’s on-demand staffing needs grow, look for a more scalable, economically prudent way to leverage your contingent workers. Managing a large remote workforce can be tedious and time-consuming, leaving you in need of better ways to communicate, collaborate, and manage performance. Platforms such as OneSpace are designed with this opportunity in mind, letting you build and manage your entire workforce in one central place.

As the workers of the future continue to prefer flexible job opportunities to full-time employment, there will need to be more gigs for the taking. Leveraging an on-demand workforce gives your company tremendous benefits in resources, timing and risk mitigation. It makes little sense to not be plugged into the gig economy.

To discuss your company’s opportunities or any challenges presented by an on-demand workforce, drop us a line. One of our consultants will get back to you soon.