Small Business Financial Article

Small Businesses Must Embrace the Gig Economy

Small Businesses Must Embrace the Gig Economy

In a tight labor market, many small businesses are challenged when it comes to finding, hiring, and affording good talent. That’s why many businesses are turning to the "gig economy" for their staffing needs. The rise of the gig economy is good news for small businesses in need of skilled workers who are ready, willing, and able to perform tasks and work on projects without having to commit to long-term hires.

What Exactly is the Gig Economy?

The gig economy is not a new phenomenon. People have always worked gigs. However, today’s gigs are tech-enabled kinds of work with no geographic requirements, enabling businesses to search worldwide for talent to fulfill a specific need on demand. The work platform exists in the cloud, with businesses and gig workers sharing technology that allows them to work and communicate as if they are in the same building.

Jobs in the highest demand include virtual assistants, accountants, graphic designers, digital marketers, programmers, social media, writers, IT consultants, and web designers. The gig economy connects workers with businesses through technological platforms like Upwork, Guru, Freelancer, and Hubstaff Talent. Businesses post their jobs or projects, and gig workers line up to bid on them. You can then vet the prospects and interview them to arrive at your match. There’s no HR paperwork, taxes, benefits, training, and learning curves - just an immediate fulfillment of your needs on a contract basis.

More Workers Reside in the Gig Economy

The opportunity for businesses to find their perfect gig match is rapidly expanding. According to the Bureau of Labor Statistics, as many as 53 million people in the U.S. participate in the independent workforce, representing nearly a third of the working-age population. The Intuit 2020 Report estimated that percentage to grow to 40 percent by the end of 2020.

This digital workforce is diverse, represented by people of all ages and experience - from college students looking to gain job experience to career builders looking for side hustles to retirees with more to offer.

Scaling the Growth Wall with Gig Workers

Businesses hoping to get on a growth trajectory are often challenged by the lack of scale in attracting and hiring quality talent. A contingent workforce offers small businesses access to specialized expertise without substantially increasing labor, equipment, or office space costs.

Businesses can now scale up quickly without concern for the overhead that accompanies new employees. When a staffing need comes up, they now have the luxury of asking themselves whether the need can be better filled by a temporary worker rather than a full- or part-time employee.

They can also scale down anytime they want to provide more flexibility and agility to their budgeting. Small businesses can achieve the scale they need to grow their profit margins by outsourcing projects and tasks to freelancers.

Rise of the Remote Worker

The same technologies that ushered in the gig economy have paved the way for the remote worker, who is an actual employee working from home. Solutions such as live chat, video calls, internet meetings, and cloud-based intranet systems allow businesses to work seamlessly and productively in a digital workspace with gig workers or remote workers. Online services such as Slack, Google Suite, Google Drive, and Dropbox can bring all employees - remote or housed - together for collaboration and on-demand meetings.

Remote Work is a Win-Win

In a tight labor market, job seekers are in the driver’s seat with greater freedom of choice of opportunities. With 66 percent of companies allowing some level of remote work, remote workers now comprise 16 percent of the U.S. workforce - up nearly 100 percent over the last ten years. By accepting remote workers, a small business can significantly expand its pool of qualified job seekers without having to ask them to relocate.

Today’s workers, especially among the millennial and Gen Z populations, cite flexible work hours and a better work-life balance as their most important considerations when looking for a job. Studies have shown that companies that hire remote workers report higher retention rates due to increased job satisfaction. Three-quarters of workers who work remotely would stay with their current employer if allowed to work at least a portion of their hours remotely.

Time for Businesses to Get on Board

The rise of the gig economy and remote work can best be explained within the broader context of an increasingly competitive landscape for hiring and retaining quality talent. Businesses of all sizes are beginning to recognize the bottom-line benefits of creating a digital workplace to accommodate both temporary workers and permanent employees. With continued technological advancements and increasing demands from job seekers in a tight labor market, businesses can expect continued momentum around the digital workplace.

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