Advantages and Negative Implications of the Gig Economy

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Human Resource management
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Table of Contents
Introduction......................................................................................................................................3
Advantages of the gig economy......................................................................................................3
Negative implications of the gig economy......................................................................................6
Conclusion.......................................................................................................................................8
Bibliography..................................................................................................................................10

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Introduction
The traditional model of working environment largely viewed those with permanent working
jobs as having an advantage compared to contract workers. However, this perception is changing
greatly with the rise of the gig economy which is rapidly transforming the traditional working
model. Most of the contemporary skilled workers are opting out of the normal full time working
structure and creating their own path. Working in the future will be characterized by flexibility in
working conditions, working hours, and the independence of choosing working locations.
Currently, there is an increase in demand for short term contractors. The increase in gig economy
growth can be attributed to a large number of millennial exploring opportunities in this working
model. Young professionals prefer the autonomy and flexibility that is provided by the gig
economy. The gig economy refers to a working environment that supports short-term
engagements, temporary contracts, and independence in contracting. It is widely known as the
‘freelancing economy.’ There has been an increase in both employers and employees supporting
this form of working, indicating a fast changing working environment. For example, a study
carried out in the USA indicates that 20-30 percent of its population earn through independent
contracting (Kuhn, 2016, pp.160). Many corporations across the world have a high demand for
specialized skills and they are opting for freelancers to fill the gaps. In gig economy workers
operate on a part-time basis as independent contractors and they are responsible for paying their
own taxes and savings. Unlike the traditional working forms, the gig economy does not offer
typical employee benefits such as retirement investments, health insurance cover and saving
accounts.
Advantages of the gig economy
The gig economy is expanding with more than a third of the workforce identifying themselves as
gig workers. The gig economy has been positively viewed due to its numerous advantages such

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as flexibility in working hours, ability to work remotely, and the ability to select projects or
works that suit the worker. Additionally, many businesses are benefiting from the reduction of
costs that comes with the gig economy such as health cover insurance, retirement benefits and
creating saving accounts for the employees (Friedman, 2014, pp.180). There are a number of
benefits that the gig economy poses for different stakeholders including the employer, worker,
government and trade organizations. For example, between the period of 2005 and 2015, more
than 90 percent of net employment growth in the US was attributed to alternative work
arrangements (Huckle, Bhattacharya, White and Beloff, 2016, pp.462). Following the advent of
technology, there exist various companies that support the gig economy. Silicon Valley has
given rise to renowned companies such as Uber, Airbnb, and TaskRabbit that gives opportunities
to employees to freelance (Healy, Nicholson and Pekarek, 2017, pp.242). Freelancing enables
employees with fulltime careers to supplement their income easily. Freelancing gives the
workers flexibility in terms of working hours and increases the earning potentials as they are able
to negotiate higher perks. In a study of 600 Uber drivers, they were asked ‘if both full-time
employment with some benefits and net salary or part-time Uber-driving were available, which
will they likely choose?’ interestingly 75 percent opted for the part-time driving due to the
flexibility it offers (Todolí-Signes, 2017, pp.200). Among the benefits of the gig economy, are
the low barrier of entry and the endless opportunities for the worker. In the gig economy, the
worker has to just carry out a cost-benefit analysis based on the resources and expertise the
worker has for example if the worker has a vehicle, he can opt for Uber or Lyft, for an extra
room there is Airbnb, for expertise in organization and technical skill there is Zirtual company
(Lehdonvirta, 2018, pp.28). Freelancing enables novices to gain experience in their new field.
The employees are able to take inventory of their skills and interest and freelance on