What is Gig Economy? | Definition & Meaning | Akrivia HCM

The gig economy is a free labor market characterized by temporary work arrangements, often facilitated through digital platforms or apps. In the gig economy, individuals work freelance or independently, taking on various “gigs” or assignments rather than being employed in traditional long-term, full-time positions.

The gig economy offers workers flexibility, autonomy, and control over their time, which has been largely absent in traditional employment structures. However, it also comes with challenges such as income volatility, lack of employment benefits (e.g., health insurance, retirement plans), and uncertain job security. The gig economy has gained significant attention and has grown rapidly in recent years, transforming work and impacting various industries and sectors.

What factors are behind the gig economy?

Many factors have contributed to the rise of the gig economy, but some of the most important include:

• The rise of technology: The internet and mobile devices have made it easier for people to search for potential employers and clients, as well as find work that suits their skills and interests.
• The desire for flexibility: Many people seek jobs that allow them to control their schedules. The gig economy provides this flexibility, as workers can choose when and where they want to work.
• The decline of traditional employment: The traditional employment model, with its full-time jobs and benefits, is becoming less common. The economic recession, which led to many layoffs and job losses.

What are the pros and cons of a gig economy?

Pros for workers

• Flexibility: Gig workers have more flexibility in their work hours and location than traditional employees. This can be a major advantage for people who want to balance work with other commitments, such as childcare or school.
• Earnings potential: In some cases, gig workers can earn more than traditional employees. This is especially true for skilled workers who can command high rates on freelance platforms.
• Freedom: Gig workers are more free to choose their projects and clients. This can be a great way to find fulfilling and financially rewarding work.

Cons for workers

• Lack of benefits: Gig workers typically do not receive benefits such as health insurance, retirement plans, or paid time off.
• Uncertainty: Gig work can be unpredictable, both in terms of hours and earnings. This can be a challenge for workers who need a steady income.
• Isolation: Gig workers feel isolated from colleagues and employers, which can lead to feelings of loneliness and lack of support.