The Gig Economy in 2023: The Pros and Cons of Freelancing and Remote Work
The widespread use of the Internet has made a lot of changes in the traditional workforce. As we can all witness in the time of the 4th industrial revolution, the gig economy is flourishing.
In 2022, 36% of the US workforce chose freelancing as their way of livelihood, and the number is growing 15% a year. In fact, a leading freelancing platform, Upwork, has predicted that there will be 86.5 million freelancers only in the US by 2027.
Remote work and quick digital communication have revolutionized our work by providing more flexibility and access, which played a key role in the rise of the gig economy.
The era of being stuck at a 9-5 job is over, as people choose more freedom in how they structure their employment. Many people (and not just millennials and Gen Zs) are coming out of confinement and choosing short-term gigs over long-term jobs.
But, have you thought about what makes the gig economy a game changer for the future of work? Let's dive deep to know what the gig economy is, how it works, and the exciting possibilities that lie ahead!
What is the Gig Economy, anyway?
The gig economy is a segment of the service economy where the labor market focuses on offering employment based on freelancing or temporary contracts rather than offering traditional full-time jobs or a very long-term commitment.
In this economic system, individual contracts are known as 'gigs,' and the people assigned to do the gigs are freelancers or gig workers. You can find freelance jobs in various positions in a wide range of industries, such as construction, IT, media, real estate, marketing, finance, software, customer service, etc.
Gig Economy in 2023 | All You Need to Know
Earlier, the term 'gig' was referred to as an artist's performance, but with time, the meaning has expanded to encompass various forms of short-term, independent work. Whether called small businesses, side hustles, or gig work, many individuals now make a full-time living in this thriving gig economy.
The gig economy may lack the security offered by traditional full-time employment, but it surely compensates with other perks professionals look for, such as the freedom to work from anywhere, remote employment, independence, etc.
Gig workers include:
An Upwork study has shown that around 36% of the US workforce was a part of the gig economy (freelancing) before the Covid outbreak. So, if you think the gig economy is still a niche workforce, think again. In fact, the World Bank has stated that nearly 47% of the workforce worldwide are freelancers.
Here are some amazing stats on the gig economy:
Globally, an average freelancer earns US$ 21 per hour.
The gig economy CAGR is projected to be at 15.7% during 2021-2027
Coming to year-by-year economic growth, the US has seen the highest leap of 78%, followed by the UK (59%) and Brazil (49%).
Pros of Freelancing and Remote Work for Workers
The gig economy has seen a huge boom in recent years, especially after the Covid-19 outbreak. Individuals seeking sustainable income sources or to supplement their income can hugely benefit from freelancing or remote work.
1. Flexibility of Work
One of the main reasons why skilled workers choose freelancing over traditional full-time (in-office) jobs is the flexible nature of the work. In fact, a recent study by Upwork reveals that 78% of skilled professionals prefer freelancing because of 'schedule flexibility,' while 73% participate in the gig economy for location flexibility.
Besides the flexible working hours and the freedom to work from anywhere, gig work allows you to work on various projects in different industries, helping you build a diverse portfolio and follow your passion.
2. Independence of Working: No Micromanagement
Gig workers or freelancers are usually skilled and experienced folks who are self-starters. Most employers hire freelancers for standalone tasks or specific projects, where they are expected to execute the job based on their expertise.
This creates an independent space for working and reduces the chances of micromanagement, boosting the quality of work and job satisfaction. Besides, workers get to choose gigs at their own time and pace, making it easier to maintain a healthy work-life balance.
Adding to this, Aryan Jalan, an organic growth consultant and founder of a digital marketing agency, shares his perspective: “Embracing the gig economy as a freelancer and now as a business owner, I've seen its transformative power firsthand. It's about flexibility, adaptability, and the freedom to chart your own path. But remember, success in this landscape requires continuous learning and clear communication.”
3. Smart Telecommuting
Remote working has radically changed business communication. As freelancers usually work from their preferred locations, telecommuting has become the new normal. Emails, phone calls, and video calls not only save time and gas but also increase productivity.
A study conducted by PGI reveals that 82% of telecommuters have reported lower stress levels (good quality of life). And 82% have stated that telecommuting boosts morale and lowers absenteeism significantly.
4. Personal Brand Building
Freelancing offers a wonderful opportunity to build personal brands. It allows you to showcase your skills, knowledge, and expertise in your chosen field, and you get the freedom to define and shape your brand image.
As an employee's online activities influence 85% of US employers' hiring decisions, workers in the gig economy can position themselves as thought leaders in their niche and bag more clients.
Networking provides an opportunity to build relationships, collaborate on projects, and expand your professional circle. By fostering meaningful connections, you can enhance your personal brand and create a high-value network that supports your career growth.
Cons of Freelancing and Remote Work for Workers
With its superb benefits, workers in the gig economy face some downsides of remote working, such as:
1. Lack of Stability
In the gig economy, freelancers heavily rely on individual clients to get projects/assignments. Naturally, gig work doesn't guarantee a secure and consistent client base. If you lose an important client, it will adversely affect your income. This lack of long-term commitment and a stable income can leave a freelancer stressed and anxious.
2. Social Isolation and Lack of Communication
Freelancers mostly work remotely, without the physical presence of colleagues or a traditional office set-up. This may result in lacking social interaction, which often makes gig workers feel isolated and lonely over a period of time.
Besides that, an isolated working environment can make it difficult to build professional relationships and expand one's network, hindering professional growth and other employment opportunities. Moreover, the absence of a traditional workspace can sometimes affect freelancers' motivation and productivity.
3. Lack of Professional Benefits
Compared to traditional full-time employees, freelancers or gig workers don't get employer-sponsored health insurance policies, retirement plans, paid time offs and scheduled holidays, sick leaves, disability benefits, maternity leaves, etc.
On top of that, freelancers are not subjected to legal employee protections such as protection against wrongful termination, workplace discrimination, and unemployment benefits.
The silver lining: With the rising popularity of independent contract workers, the State of California passed Assembly Bill 5 in 2019, which protects gig workers, independent contractors, and freelancers to some extent.
4. Lack of Accountability and Dependence
Freelancers are solely responsible for managing their workload, deadlines, and deliverables. Without oversight or direct supervision and a lack of effective communication, it's hard to stay organized and meet project deadlines.
Moreover, freelancers often manage multiple projects simultaneously, which often concerns some employers about their accountability and commitment.
Conclusion: Gig Economy is Here to Stay
As I've said before, the gig economy is not just another millennial trend out there; it's going to stay for a long, long time. With almost half of American workers choosing to work from home, it's become a new normal for the global workforce.
In a shocking yet expected revelation, Google, one of the largest companies in the world, has more freelance workers than full-time employees. And as the global gig economy market size is about to reach US$ 918944.83 million by 2028, this is the perfect time to shift your career path and join the gig economic growth.
There are many of you who are just starting out or thinking about giving it a try. Here are some tips to help you kickstart your freelancing journey:
Manage effective and clear communication with clients
Time management is a must; use a calendar or time-scheduling tool
Set the right value of your service based on your expertise and experience
Upskill yourself and start establishing yourself as a thought leader
Lastly, try to maintain a healthy work-life balance
And if you own a business, I'd suggest considering the opportunity of hiring highly-skilled freelancers to scale your business faster. However, there's no rush; the gig economy is here to stay.