What’s Next for The Gig Economy?

What's Next for the Gig Economy?

What will the future of work look like? If recent trends continue, we may be looking at a workforce that will have more freelance workers than traditional workers. People are abandoning a traditional work environment in droves after realizing they can achieve the work-life balance they want and work remotely with a freelance career. In fact, 54% of people who left their companies last year ended up working as freelancers or starting their own businesses.

Technology has come leaps and bounds over the past few years, mostly driven by the pandemic. People have realized that they could connect with companies anywhere and companies have realized they could source talent from anywhere. Gig workers are taking full advantage of this trend toward flexible work to build their own career paths and connect with a variety of businesses and opportunities.

The gig economy is growing, fast. As of this year, approximately 70 million US workers have engaged in some way with the gig economy. The number of independent workers in the U.S. increased by 34% from 2020 to 2021. That’s over 13 million new workers!

So, what’s next for the gig economy?

More Skilled Workers + Niche Work

When you think of the gig economy, you may immediately think of Uber drivers or grocery deliveries, but gig work has expanded far beyond that in recent years to include more skilled and niche work. While more people move away from traditional careers, they’re taking those skills into the freelance world and connecting with several companies on several projects at a time.

This not only benefits workers, but companies can rely on this new flexible talent to help fill the skills gap. This can allow them to build faster and complete projects more efficiently by incorporating talent when and where it is most needed. The gig economy has shown itself to be extremely valuable to companies who want to grow quickly and build targeted elements of their business in a super flexible way. As the gig economy continues to grow, the work will expand to include specialized skills that can be applied across a variety of industries.

Compliance will be in the Spotlight

With this flexible workforce comes a whole new set of compliance and legal concerns. Managing and paying freelancers is much different from how companies may be managing full-time, salaried employees today.  Freelancers need to be classified based on what type of job they do, how often they will do it, and if that work is vital to your business. Classify these workers incorrectly, and companies could find themselves with a multi-million-dollar problem.  

Businesses need to look carefully at how they classify and pay their gig workers. Misclassification comes in when workers are improperly classified as 1099 independent contractors, when they are, in fact, W-2 employees who should be entitled to overtime, workers’ compensation, unemployment, earned sick leave, family leave, temporary disability, and other health benefits.

Recent court rulings have tightened the belt on 1099 vs W2 classification and businesses need to get ahead of this and protect themselves from future legal headaches.  If you have a business that hires from the gig economy, you need to take action now to make sure they are classified correctly and there are no surprises down the road. 

Planning to hire more Gig Workers this year? AllWork can help you onboard, manage, and pay your flexible workforce. We offer fast, easy, and compliant payment options. Get in touch at info@allworknow.com to learn more and see a demo of our platform here.