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How your company can take advantage of the gig economy, not fear it

(NEWS) The gig-economy is increasing in popularity and you shouldn’t be quick to write it off.

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Gigs are expanding

The gig economy is buzzing. The term has now come to signify any contractual, part-time, freelance work, and is not limited to the tech universe.

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Freelance freedom

Between 2004 and 2014, independent contracting employment increased from 12 percent to only about 18 percent. In the last several years the gig economy has exploded onto the scene.

The 2016 Bureau of Labor Statistics report shows that the rate of self-employment in America is falling, and yet more people are engaging in freelance work, which last year stood at an impressive 35 percent of the total economy.

What gives?

The answer, backed by several surveys, is simple.

People with full-time jobs are increasingly participating in part-time gigs.

And although the Uber driver has become the poster-child, the scope of the gig economy is much wider.

A growing gig nation

The BLS report clearly states, “Gig workers are spread among diverse occupation groups and are not easily identified (added emphasis) in surveys of employment and earnings.”

Linkedin predicts that by 2020, 43 percent Americans shall be engaged in gig economy.

Really not a shock

This should not come as a surprise. By now it is well known that our out-of-date model of success — “study hard—earn a degree—get a job” is failing.

There are too many graduates, and too few well-paid full time jobs.

The private sector has also struggled. In most American metro areas, more businesses are closing than new ones are opening up.

For many millennials, it is the sole source of income. For others, it is an easy way to make some extra cash. Today’s millennials have less purchasing power than Baby Boomers or Gen Xers. But this picture no longer accurately portrays the essence of the gig economy.

Many of today’s gig economy participants, especially younger employees, actually have full-time jobs.

However, instead of opening their own businesses by quitting their full-time jobs (a common practice in the past), they are pouring their passion into these freelance gigs IN ADDITION to their full time jobs.

The gig economy today has thus become an outlet that captures their expressions of creativity.

Gigs reaching beyond their stereotypical niche

The tech industry is already well known for a thriving gig economy. Contractual Web-developers (~$31/hr), Software developers (~$48/hr), Graphic Designers, and Multimedia Artists are all experiencing high demands.

But gig economy culture is spreading to other sectors of the economy, largely facilitated by the internet experience.

It is infiltrating administrative & support services, healthcare and even real estate.

Seasonal gigs are still a thing

Some demands are very much seasonal. Contract Accountants (~$30/hr) are in high demand as taxpayers try to submit their returns before April 15. Other gig economies are in demand year round.

Truck delivery is one of the highest paid gigs, which got a boost through the popularity of Amazon and eBay.

Low barriers to entry also make gig economies attractive. Take for example, Airbnb. So long as you have a spare room in a well-located, highly visited city, you can partake in the hospitality business!
This is good news for our economy! The criticisms it faces are mostly unfounded, and must be resisted.

Don’t listen to the haterz

The media and the government often unfairly characterizes the gig economy. The contract worker is seen as a victim, as being preyed upon by the big businesses, entering an exploitative arrangement, often unknowingly and against his own best interest.
The advent of the gig economy is painted as the death of salaries, health insurance and vacation days.
The goal of such criticism seems to be to reduce the number of contract workers and increase the number of definable “employees”. This argument overlooks the fact that each of these contracts were entered voluntarily and fulfilled a service that was a gap in the market.

Too many benefits

A 2016 Fastcompany survey found that 75 percent of employees still prefer health benefits to usual industry benefits like remote work.

While that is certainly true of a job seeker without any other job, statistics show us that more freelancers are full-time employees fishing for side gigs.

Forcing contractors to supply fringe benefits would result in duplicative benefits.

Gigging is not predatory

The debate over how to appropriately regulate the gig economy shall continue.

Obviously, companies may come up with strategies to exploit contract employees.

But at a time when traditional employers are experiencing downward pressure on their profit margins and retaining employees while tackling soaring insurance costs has become a challenge, engaging the best and the brightest from the gig economy becomes increasingly necessary. Industries that engage in it should not be seen as predatory.

Helping not hurting

In fact, it is quite the opposite. Gig economies empower the labor market in new innovative ways, when traditional markets have failed them.

Even the best schools in our land now advise their graduates to stop looking for full time jobs and participate in the gig economy.

Therefore, the caricature that the eager job seekers of the gig market must be bottom-of-the-barrel talent pool is also grossly erroneous.

Gotta up the ante

Yet, many companies have under-invested in this area. They have done too little to lobby for themselves and entirely miss out reaping its benefits.

Some still wait for traditional application to populate their inbox instead of actively recruiting from the gig-economy.

Their recruiting strategies are also failing. Mentioning “working remotely” as a reward on the job description is simply not good enough anymore.

Take the first step

Instead, companies should stress on their own unique story: a passion-driven project, with lots of creative leeway and good pay.

Research shows that the modern employee wants flexible hours, fair but few rules, and transparent pay structures.Click To Tweet

All of this can be easily achieved in a gig economy setting. What are we waiting for?

This editorial originally ran on March 21, 2017.

Barnil is a Staff Writer at The American Genius. With a Master's Degree in International Relations, Barnil is a Research Assistant at UT, Austin. When he hikes, he falls. When he swims, he sinks. When he drives, others honk. But when he writes, people read.

Business News

Hobby Lobby increases minimum wage, but how much is just to save face?

(BUSINESS NEWS) Are their efforts to raise their minimum wage to $17/hour sincere, or more about saving face after bungling pandemic concerns?

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Hobby Lobby storefront

The arts-and-crafts chain Hobby Lobby announced this week that they will be raising their minimum full-time wage to $17/hour starting October 1st. This decision makes them the latest big retailer to raise wages during the pandemic (Target raised their minimum wage to $15/hour about three months ago, and Walmart and Amazon have temporarily raised wages). The current minimum wage for Hobby Lobby employees is $15/hour, which was implemented in 2014.

While a $17 minimum wage is a big statement for the company (even a $15 minimum wage cannot be agreed upon on the federal level) – and it is no doubt a coveted wage for the majority of the working class – it’s difficult to not see this move as an attempt to regain public support of the company.

When the pandemic first began, Hobby Lobby – with more than 900 stores and 43,000 employees nationwide – refused to close their stores despite being deemed a nonessential business (subsequently, a Dallas judge accused the company of endangering public health).

In April, Hobby Lobby furloughed almost all store employees and the majority of corporate and distribution employees without notice. They also ended emergency leave pay and suspended the use of company-provided paid time off benefits for employees during the furloughs – a decision that was widely criticized by the public, although the company claims the reason for this was so that employees would be able to take full advantage of government handouts during their furlough.

However, the furloughs are not Hobby Lobby’s first moment under fire. The Oklahoma-based Christian company won a 2014 Supreme Court case – the same year they initially raised their minimum wage – that granted them the right to deny their female employees insurance coverage for contraceptives.

Also, Hobby Lobby settled a federal complaint in 2017 that accused them of purchasing upwards of 5,000 looted ancient Iraqi artifacts, smuggled through the United Arab Emirates and Israel – which is simultaneously strange, exploitative, and highly controversial.

Why does this all matter? While raising their minimum wage to $17 should be regarded as a step in the right direction regarding the overall treatment of employees (and, hopefully, $17 becomes the new standard), Hobby Lobby is not without reason to seek favorable public opinion, especially during a pandemic. Yes, we should be quick to condone the action of increasing minimum wage, but perhaps be a little skeptical when deeming a company “good” or “bad”.

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Business News

RIP office culture: How work from home is destroying the economy

(BUSINESS NEWS) It’s not just your empty office left behind: Work from home is drastically changing cities’ economies in more ways than you think.

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An empty meeting room, unfilled by work from home employees.

It’s been almost six months since the U.S. went into lockdown due to COVID-19 and the CDC’s subsequent safety guidelines were issued – it’s safe to say that it is not business as usual. Everyone from restaurant waitstaff to start-up executives have been affected by the shift to work-from-home. Even as restrictions slowly begin to lift, it seems as though the office workspace – regarded as the vital venue for the U.S. economy – will never truly be the same.

Though economists have been focusing largely on small businesses and start-ups, we are only just beginning to understand the impact that not going back into the white-collar office will have on the economy.

The industries that support white-collar office culture in major cities have become increasingly emaciated. The coffee shops, food trucks, and food delivery companies that catered to the white-collar workforce before, during, and after their workday, are no longer in high demand (Starbucks reported a loss of $2 billion this year, which they attribute to Zoomification). Airlines have also been affected as business travel typically accounts for 60%-70% of all air travel.

Also included are high-end hotels, which accommodate the traveling business class. Pharmacies, florists, and gyms located in business districts have become ghost towns. Office supplies companies, such as Xerox, have suffered. Workwear brands such as J. Crew and Brooks Brothers have filed for bankruptcy, as there is no longer a need to dress for the office.

In Manhattan – arguably the country’s most notorious white-collar business mecca – at least 1,200 restaurants have been permanently lost. It is also is predicted that the one-third of all small businesses will close.

Additionally, the borough is facing twice as many apartment vacancies as this time last year, due to the flight of workers no longer tied to midtown offices. Workers have realized their freedom to seek more affordable and spacious residence outside the city. As companies decentralize from cities and rent prices drop, it isn’t all bad news. There is promise that particular urban white-collar neighborhoods will start to become accessible to the working class once again.

Some companies, like Pinterest and REI, are reporting that their shift to work from home is in fact permanent. The long-term effects of deserted office buildings are yet to make themselves evident. What we do know is that the decline of the white-collar office will force us to reimagine the great American cities – with so much lost due to the coronavirus, what can now be gained?

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Business News

2020 Black Friday shopping may break the mold

(BUSINESS NEWS) Home Depot states their new plan for deals and discounts over two months, in place of a 1-day Black Friday event.

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Men shopping in an empty aisle, Black Friday to come?

Humans change and adapt – that’s just in our nature. Retail stores have struggled to maintain their sales goals for years as more and more people move to ordering online. Online prices still seem to be within customer expectations and often come with free shipping. Additionally, people that may have preferred to shop in an actual brick-and-mortar store have changed their shopping habits dramatically in 2020; it’s hard to social distance and be safe in crowded stores or in small aisles. Black Friday may be next to change.

Amazon and other big box store’s online ordering platforms have simplified getting what you need delivered right to your front door. According to Statista, “Amazon was responsible for 45% of US e-commerce spending in 2019 – a figure which is expected to rise to 47% in 2020.”

Retailers count on the holiday season, specifically Black Friday deals (the day after Thanksgiving), to bring in up to 20% of their annual revenue. It’s hard to just remove that option completely. But considering the times of social distancing, wearing masks in public, and especially avoiding large crowds, the tradition of Black Friday will need to look different this year.

It will also be interesting to see what supply chain disruptions from early 2020 will have the most effect this shopping season. We saw predictions in March that said the United States would see the biggest disruptions in about six months. Black Friday falls right on that timeline.

Home Depot has announced their plans to go ahead and give the deals over a two month span, starting in early November through December (both online and in stores with the possibility of adding some special deals around the actual Black Friday date) to help encourage a more steady stream of shoppers versus so many packing in on the same day.

The home improvement chain has actually seen a great sales year. This is likely due to people working from home and being interested in doing more home projects (and possibly having a bit more time to do them as well). As of May 2020, “The Home Depot®, the world’s largest home improvement retailer, today reported sales of $28.3 billion for the first quarter of fiscal 2020, a 7.1 percent increase from the first quarter of fiscal 2019. Comparable sales for the first quarter of fiscal 2020 were positive 6.4 percent, and comparable sales in the U.S. were positive 7.5 percent.”

Home Depot, along with many other retailers like Walmart, Target, and Best Buy have confirmed that they will be closed on Thanksgiving Day, which may not be new for all of them but has always signaled the kickoff of the holiday shopping season.

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