The new gig economy

May 29, 2017

The new gig economy

A version of this article first appeared on MercerMatch

Customer demand for faster service and workers’ desire for more flexibility are triggering rapid change in the global workforce, with casual contract work – the “gig economy” – becoming the norm in a growing number of industries.

Technology is the driving force behind the new gig economy, allowing us to buy and sell skilled services and products in an online marketplace at the click of a button.

According to a 2016 study by Ernst & Young, the gig economy has been present in some corners of the economy for 30 years; in industries such as oil and gas, engineering, technology and scientific research.

“On-demand apps like Uber, Lyft, Handy, Task Rabbit and Deliveroo are the most conspicuous examples of the rise of the gig economy,” the report says. The gig economy itself has been operating for as many as three decades.

“The difference now is the accelerated, wide-spread adoption of a contingent workforce model across… a much larger proportion of the total workforce.”

While it’s difficult to measure the real size of the gig economy workforce, research suggests it’s growing rapidly, with technology making it much easier to connect available talent with prospective work. The Ernst & Young report predicts that by 2020 almost one in five US workers – about 31 million people – will be engaged in contingent jobs.

The win-win

The potential upsides of this gig deal – for both employers and employees – are clear.

For employers, the proposition of on-demand employees provides a workforce that is there only when you need it, without the longer-term responsibilities and challenges that come with permanent employees. Keeping skills up-to-date for example, becomes the employee’s responsibility.

For employees, there is an equally attractive proposition: a working deal that is 100% employee-centric; work on your own schedule, be accountable for your own performance and development, and avoid the potential miseries of being “stuck in a dead-end job”.

New deal, new challenges

There’s a catch though: while gig workers enjoy the empowerment of being their own boss, they give up some degree of security and structure in their lives. As much as flexibility is a huge drawcard, a predictable income and consistent working hours are pretty great too.

The downside for employers is that giggers are more likely to be individualistic in their approach to work and less likely to be interested in protecting the organisation’s brand – a substantial risk for any business.

The flexibility of the gig economy therefore becomes both its biggest strength and its biggest weakness.

Helping giggers thrive

Many companies have attempted to design complex incentive solutions and behavioral nudges for their workers, such as Uber’s reported psychological tricks designed to keep drivers on the job longer.

But creating strong short-term incentives for people to participate does little for engaging them in the mission, purpose, and performance of the company. Participation does not equal engagement.

Decades of research shows that people want three things from the work they do:

1. Meaning and structure
2. Belonging and camaraderie
3. Feeling important, valued and respected for the work they do

No matter what work they are doing, people crave these three things, and there is no evidence to suggest gig economy workers are any different.

Meaning and structure

Giggers like a “story” just as much as any full-time worker; a narrative that provides meaning to their work, something they can be proud of and share with their family and friends. They need to have a relationship with the brand that employs them.

A sense of connection

When employees feel a strong sense of connection between their identity and the work they are doing, they are more likely to feel invested and engaged in their work; giggers included.


We all want to feel valued and fairly compensated for our contributions. The work must be worthwhile with the right rewards and incentives. 

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