We've been talking about gig workers at the Cafe recently, so I thought I'd pile on with some data about the employee's side of things.
The New York Times has given a reality check to our assumptions about who's participating in the gig economy and why. It seems the gig economy is not quite the business transformation we have all come to believe, although for better -- and probably for worse -- it is a disruptive employment approach as we heard earlier this week at the Cafe.
Here are some facts that The New York Times shared. I think you'll be surprised.
From 2007 to 2016, the share of the workforce reporting 1099 income has only risen by one percent. This minuscule finding is quite a surprise. However, I am reporting from the gig economy playing field to tell you that how you get project work, how your work is managed and remunerated, is typically platform-based any more if you are working with big companies and/or tech savvy mid-sized ones.
The number of people devoted to making their profession out of gig-type work seems to be lower than we imagined. More than half of those doing working in the gig economy earned $2,500 or less for that work in 2016. Not our usual employment pool, but listen to this. The Times took this finding to mean that these gig workers are '" . . . individuals whose primary annual income derives from traditional jobs and who supplement that income with platform-mediated work."' Face it, there are people in your workforce who are working all different types of second jobs for extra money.
They may not be employed how you think. In a national study of the "Economic Well-Being of U.S. Households in 2018," 3 in 10 adults report engaging in at least one type of informal paid activity. Three percent of respondents reported driving for a car service like Uber or Lyft -- compared to 5% selling goods at flea markets or 3% walking dogs.
Of course, most employers work with the over 50% of gig workers making more than $2,500 annually. In my experience, the following is true about 1099 work. (I'm glad the reporter put it into words.)
"The gig economy . . . is a form of capitalism that is brutally efficient. It can work well for people seeking a little extra cash. But it has major drawbacks for those who want a solid, predictable income and some protection from the ups and downs of the economy -- or for employers who need a reliable, collaborative work force."
Gig contracts may save the employer the cost of benefits and give Human Resources easy, online platforms for administration -- and you will likely always find willing employees. But you and the employee need to agree on the employment relationship that you are creating. Overdo it and you may find that you've tampered unwisely with your company's culture.
Margaret O'Hanlon, CCP brings deep expertise to discussions on employee pay, performance management, career development and communications at the Café. Her firm, re:Think Consulting, provides market pay information and designs base salary structures, incentive plans, career paths and their implementation plans. Earlier, she was a Principal at Willis Towers Watson. A former Board member for the Bay Area Compensation Association (BACA), Margaret coauthored the popular eBook, Everything You Do (in Compensation) Is Communications, a toolkit that all practitioners can find at https://gumroad.com/l/everythingiscommunication.
Comments