Future-Proofing the Workforce: The Role of the Gig Economy in Global Employment

Gone are the days when people relied on a 9-5 job with a single employer under direct payroll. Nowadays, people prefer working independently by balancing various job streams. This is where the concept of the gig economy originated. 

Before discussing this economy and its related aspects in detail, let's first understand the meaning of the gig economy. 

Also known as the access or sharing economy, a gig economy depends on temporary and part-time work positions. 

Labor is exchanged against monetary benefits between two individuals or companies via digital platforms. 

This economy connects customers and service providers on a payment-by-task basis, mostly for short terms. 

Want to know the future of gig economy? 

The gig economy is pivotal in reshaping the global workforce, with its share of advantages and business challenges. Continue reading to learn more.

Understanding the Gig Economy

As mentioned above, a gig economy is an economic model where individuals are hired as independent contractors or freelancers for various temporary jobs via digital platforms or applications. Various communication technologies help outsource tasks to the informal labor market. 

Gig work is different from traditional work models. In fact, with the advent of this new economy, traditional work models have undergone upheavals for businesses and workers alike. 

The traditional work models have full-time jobs with fixed hours, regular salary, a fixed pay structure under the company payroll, and certain benefits. These models offer predictability and stability. 

The gig economy is in complete contrast to short-term contracts with various employers. Payments are on a work or project basis with no fixed salary. Workers are distributed globally and have flexible working hours. 

Some of the best gig economy examples are Uber, Airbnb, and Upwork. These platforms have become the professional identity and personal brand of the worker employed by the company. 

These platforms bring together employees, independent workers, and customers under one roof for easy collaboration. 

Gig Economy Statistics and Growth

A look at the current gig economy trends and gig economy statistics is sure to amaze you. 

The global gig economy market size was USD 556.7 billion in 2024. With a CAGR of 16.18% from 2024 to 2032, the market size is estimated to reach USD 1,847 billion in 2032. These figures indicate a rapid growth of the gig economy in the coming years. 

According to a report from the World Bank entitled “Without Borders: The Promise and Peril of Online Gig Work,” there are estimated to be almost 154 - 435 million online gig economy workers globally, representing 4.4 -12.5% of the global workforce. 

Freelancers are the future of gig economy. As per reports, there were 73.3 million freelancers in the US only in 2023. The figures are expected to reach 90.1 million in 2028. 

Another interesting fact about the gig economy is the percentage of workers. Approximately 42% of online gig workers are females. In the traditional labor market, this percentage is 31.8%.

What is Driving the Growth of the Gig Economy?

Various factors have contributed to the growth and development of the gig economy globally, making the future of the gig economy bright. Some of them are as follows:

• Change in work approach: Millennials and other younger generations see their careers from a perspective that is different from the traditional work approach. They design their careers to align with their interest areas and passions. 

• Technological advancements: The advent of various technological advancements, such as Artificial Intelligence (AI), online platforms, cloud computing, and various remote work tools and applications, has made working convenient. People can collaborate and work with employers globally right from their homes via different online platforms. 

• Flexibility and convenience: Being a part of the gig economy brings flexibility and convenience in working. Employees can choose to work according to their schedule and set deadlines accordingly. Work convenience is a great factor contributing to the growth of this economy. 

• Increasing demands for contractual workers: Post-pandemic work models have evolved greatly to suit the needs of the hour. Instead of hiring full-time employees, many organizations now look for contractual workers for a particular work or project. Apart from making the payment for the contract work, there is no other liability on the part of the employer. 

Technology Enabling the Gig Economy

The growth, success, and future of gig economy depend greatly on technological advancements. 

Let us take a look at what types of technology have helped the gig economy grow. 

• Cloud Computing: Cloud computing enables workers to access important files and programs from anywhere and at any time. They can track assignments, manage contacts, and collaborate on documents. With a digital connection, companies can access a pipeline of work and talent from anywhere in the world. ‍
• Artificial Intelligence (AI): In the gig economy, staffing agencies use AI extensively to find the right candidates for a job profile. AI also helps job seekers find the right assignments in their interest areas. ‍
• Big Data: With Big Data, organizations can assess prospective workers' various behaviors and patterns. This helps in establishing the right connection between organizations and job seekers. Gig workers can find the best fit for short-term assignments to secure future clients. ‍
• Digital payment systems: With digital payment systems powered by Blockchain, gig workers get paid for their work right in their bank accounts anywhere in the world. Geographical boundaries are no barrier to making the payment. Most importantly, these transactions are safe and quick. 
• ‍Mobile technology: Mobile technology is at the heart of the gig economy. With advancements in mobile technology, customers can connect to service providers within seconds.

Opportunities in the Gig Economy 

Needless to say, the gig economy has many benefits for businesses and workers alike. Let us explore some of the advantages of such an economy:

1. For Gig Workers
   • Flexible working schedule as per convenient time
   • Location-independent work scopes
   • Better payouts - dependent on the work or project
   • Opportunity to work on different gig platforms in varying industries

2. For Employer Organizations/Businesses
   • Access to the global talent pool with a wide range of talent
   • Reduced expenses in hiring and recruitment
   • No liability for workers like paid leave benefits, health insurance, pension, and so on
   • Saving costs with innovative employment models

Challenges of the Gig Economy

Figures state that the number of jobs in gig economy is increasing and will increase further in the coming years. The gig economy future is also bright. 

However, there are various challenges in this economy as well. Let us look at some of them:

• Lack of job security: Since gig economy jobs are contractual, there is no job security. Once the job and the contract are over, workers have to look for a new job/project. 

• Income instability: The gig economy offers no income stability. Since the jobs in this economy are contractual and temporary, there is no fixed monthly salary. In case of job non-availability, there is no income. 

• Lack of benefits: Like traditional jobs, these jobs do not offer benefits from employers, such as medical bills, health insurance, pensions, paid leave benefits, and more. 

• Regulatory concerns: There are various regulatory concerns regarding hiring contractual or temporary workers in different industries. These concerns and regulations vary from country to country and might impact that country's gig economy. 

These challenges are common for distributed and hybrid workforces, along with problems like working in different time zones, communication barriers, a lack of team cohesion, and work-life balance. 

Regulatory Landscape and Worker Protections

Gig workers are not covered by traditional labor laws, which leads to a gap in various social security offerings, such as health insurance, pensions, paid leave benefits, and others. 

To bridge the gap, governments worldwide are working together to amend gig economy rules and regulations so that both workers and employers remain protected and covered. 

Steps are being taken to ensure workers' rights, fair wages, and benefits so that workers are not deprived. Some examples are as follows:

• In March 2021, the UK Supreme Court gave a verdict classifying ride-hire drivers as employees. They are entitled to a minimum wage, holiday pay and pension. 

• In May 2021, Spain introduced the ‘Rider Law,’ where food delivery gig workers are categorized as employees.

The Gig Economy and The Future of Work

The gig economy is reshaping traditional employment norms and styles. Fixed working hours, physical presence at a workplace, paid leaves, pensions, etc., have become things of the past. The rapidly evolving gig economy is integrating various work models, such as distributed and hybrid work models, to remain competitive. 

In a distributed workforce, workers work remotely from various locations and collaborate on works and projects using different technologies. 

These workers are decentralized and have no official physical location. In a distributed workforce, workers can work in different time zones. 

A hybrid work model combines remote and office work. The work environment is flexible, balancing collaboration and productivity. 

Many employees in the hybrid model work as gig workers in their free time to make extra money. The same applies to a distributed workforce. The gig economy seamlessly integrates these trends for the overall growth of both workers and business organizations. 

Employee Experience & Future of Work in The Gig Economy

Whether it is the gig economy or a traditional workplace, employee experience is a major thing to watch out for. Businesses have to focus on enhancing the employee experience for gig workers, just like full-time workers. 

Here are some ways in which businesses can improve employee experience for gig workers:

• Compensation and Benefits: Proper compensation and benefits are crucial for a positive employee experience. Businesses must have proper work rates along with performance-based bonuses. If possible, benefits like health insurance and wellness programs are also great. 

• Emphasizing autonomy and flexibility: Flexibility is the mantra of gig work. Businesses must ensure that flexibility is the key to a positive employee experience for gig workers. They must have flexible working hours and autonomy in their work. The business policies should be formulated accordingly. 

• Effective communication channels: Effective communication channels are mandatory for the effective management of gig workers. The workers should be regularly updated with available projects, company news, and policy changes. Feedback and an open-door policy are also effective. 

• Building a sense of community: Gig workers often miss the common connection in a traditional workplace. Creating a sense of community enhances the employee experience for gig workers. This can be done through online forums, recognition programs, or virtual meetups. 

The Future Workforce: Hybrid and Distributed Models

There are no two ways about the fact that the gig economy is the future of workforce. 

Business organizations knew how a traditional workplace operated with full-time employees. 

The pandemic popularized the idea of remote work and a distributed workforce globally, where people could work from anywhere in the world at their convenience. 

Post-pandemic, many organizations started using the hybrid work model, which combines remote work with working from the office. 

Businesses and workers have understood the working models' advantages and disadvantages. Businesses foreseeing the future blend the three work models to form an adaptable workforce. 

While some employees are full-time, some are remote workers, and others are gig workers. 

Maintaining this combination ensures enhanced productivity, better collaboration, and overall growth and development of the business and its workers.

Preparing for the Gig Economy’s Future

Workers and businesses alike must prepare for the future of work, gig economy. Career paths and business landscapes have undergone a huge transformation with the popularity of the gig economy. 

Here are some effective preparation tips and strategies for both workers and businesses for the gig economy:

• Understanding the functioning of the gig economy: The operations of the gig economy are different from those of the traditional work setup. The first step towards preparing for this economy is to understand the concept well. Both workers and businesses must consider the pros and cons of the economy. ‍
• Emphasizing digital literacy: One of the most important things for thriving in the gig economy is digital knowledge. Workers and business organizations must be proficient in various technologies and digital tools. They must be able to use various digital platforms for online collaboration, project management, remote work, and communication. ‍
• Developing soft skills: Honing soft skills is imperative for the gig economy. These include problem-solving abilities, adaptability, communication skills, and so on.
• ‍Facilitating networking: Businesses and gig workers must have a robust professional network to connect with potential clients and employees. Some of the best networking sources include alumni engagements, networking events, industry-specific seminars and conferences, webinars, and so on. 
• ‍Developing an entrepreneurial mindset and embracing life-long learning: The gig economy demands innovative, creative, and adaptable professionals with an entrepreneurial mindset. The professionals should be open to continuous learning and adapt to new trends and technologies.

Embracing the Gig Economy

Now that we have an idea of the future of gig economy, opportunities, and challenges, it is clear that there is a massive shift in the working pattern globally. 

Both workers and businesses are taking advantage of the new economy to make the most of it. 

Flexibility, adaptability, innovation, and consistent learning are the pillars of this economy, and gig workers and businesses are strategizing accordingly. 

The gig economy is the future of work and is here to stay. To strive in this work landscape, workers and businesses must strike the right balance between the flexibility of gig work and the security of traditional jobs. 

How Skuad Can Help

Skuad is a Global Employment and Payroll Platform through which businesses can hire contractors, full-time employees, and gig workers in more than 160 countries. 

With Skuad’s Employer of Record Platform, businesses can build teams worldwide. 

Skuad has simplified international hiring so businesses can seamlessly hire, pay, and manage gig workers globally. In addition to running a secure global payroll, Skuad ensures local employment law compliance and work permits. 

Request a demo today!

FAQs

1. Is the gig economy the future?

With a massive change in the work landscape, where people are looking for flexibility and convenience, the gig economy is undoubtedly the future. Both workers and businesses are reaping the benefits of this economy. 

2. What is the prediction for the gig economy?

The global gig economy market size was USD 556.7 billion in 2024. With a CAGR of 16.18% from 2024 to 2032, the market size is estimated to reach USD 1,847 billion in 2032. These figures indicate a rapid growth of the gig economy in the coming years. 

3. Who benefits from a gig economy?

The future of gig economy is bright for both businesses and workers. While workers have flexibility and convenience in their work methods, businesses can hire gig workers on a contract basis without taking on any other liability. 

4. Does the US have a gig economy?

Yes, the USA has a gig economy, where 56% of gig economy workers have two or more projects or jobs. 

5. Is the gig economy sustainable?

In the current situation, sustainability is a small problem for the gig economy. However, with initiatives from businesses and other organizations, the economy can become sustainable in the long run.