Gig economy trends in the USA saw a sharp rise back in 2008 when millions lost their job during the Global Financial Crisis and the subsequent recession. The growth and evolution of the dot.com companies and the knowledge economy made freelancing and contract work increasingly attractive for talent as well as businesses. 

The workforce also began finding the gig economy more useful when they needed multiple sources of income to cover the ever-increasing cost of living. The rising trend of entrepreneurship further created a growing market for freelancers. The gig economy has become so important to the business world that 48% of Fortune 500 businesses relied on freelance platforms in 2022.

So, what is the impact of gig economy on talent pools and business models? Find out the answer in this guide.

Why You May Want to Hire Gig Talent?

It is important in the current economy to ask why your business may want to hire gig talent and why not stick to the conventional approach of hiring and maintaining in-house talent.

Consider a scenario where you have an instant skills gap within your company. Hiring independent talent is generally quicker than searching and hiring a similarly qualified full-time employee.

The gig economy has emerged as one of the biggest on-demand workforce trends. When you hire an independent contractor, it can also be beneficial in terms of cost savings. Gig workers are not permanent employees. This means you can hire them on a temporary basis or as and when needed. 

Here is an insight into the key benefits of this on-demand economy:

• Access to a Vast Talent Pool: Any time you have a project or need to fill an open position, you can do so quickly. You can have access to a diverse set of skills.
• Greater Flexibility: You can readily scale up or down your workforce based on your needs. For example, if you need access to an accounting team for short term, you can instantly assemble the right temporary workers.
• Reduced Costs: Hiring a freelancer almost always costs less than hiring and onboarding an employee. Gig workers, generally, are not offered any benefits. Additionally, access to such a workforce can also allow your business to work through business slowdowns without incurring high costs.

In the current economy, this is helpful for businesses of all sizes, including small and medium enterprises and large corporations.

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Gig Economy Trends USA

The freelance economy growth is taking place at a fast pace. This growth is being facilitated by two main factors:

• Growing inclination toward flexible work settings
• Emergence and multiplication of online talent platforms

According to reports, the American gig economy business models market was worth $204 billion in 2018. It reached $455 billion in 2023. 

Currently, more than a third of workers are part of the gig economy in one way or another. By 2027, over half the US workforce is expected to become part of this economy.

Impact of Gig Economy on Talent Pools

The gig economy gives talented professionals the control they desire over their careers. Some of the different ways it affects talent pools are as follows:

i. Greater Independence & Flexibility

Flexibility is one of the greatest benefits of this economy for workers. Freelancers and contract workers get the opportunity to work around their own schedules. This allows them to balance their work with personal life.

Such a level of autonomy allows workers to personalize their work-life balance. Such a culture has been found to help improve job satisfaction and well-being. Additionally, they can choose to work on projects that perfectly align with their skills and interests. This is an option that may not always be available to a permanent, in-house worker.

ii. More Work Opportunities

One of the most important ways how the gig economy is reshaping talent pools in the USA is by creating the opportunity to work for clients from all over the world. The talent pool can reach clients and markets, not just in other states, but worldwide.

The talent can work remotely on projects regardless of where they or their clients are located. Being able to access global markets further means gaining access to higher-paying opportunities. 

Additionally, they get the opportunity to take up versatile professional challenges. 

iii. Opportunity for Skill Development

As indicated above, an important impact of gig economy on talent pool is the opportunity it creates to engage in projects across various industries. This further enables them to engage in ongoing learning while growing professionally. 

Such exposure benefits the workers by enabling them to:

• Develop a broader range of skillsets
• Enhance their marketability in the gig market
• Enhance their ability to adapt to market conditions

Another unique benefit of exposure to the gig economy is that these workers tend to stay up-to-date with the current technologies and market trends. These workers are required to adapt to client demands and new projects.

Such a level of skill development benefits both freelancers and their potential clients.

Impact of Gig Economy on Business Models

The growth of this sector has led to the creation of versatile gig economy business models. It is built on innovative solutions and it has emerged as a lucrative model for different types of businesses. The following case studies provide insights into on-demand workforce trends on different business models:

B2B Business Models

The B2B business model’s growth has significantly benefited from the emergence and expansion of internet technology. Online platforms have provided enterprises with a more efficient, simpler, and secure approach to collaboration. The following case study is a splendid example of this economy’s impact:

Foxconn has built strategic partnerships with various industry suppliers. It is a Fortune Global 500 company. A few of the company’s key clients include Apple, Sony, and HP, of which its B2B relationship with Apple is most notable. Apple and Foxconn’s B2B relationship is more than a buyer-supplier set-up where the latter acts as more than a manufacturer and supplier. It also acts as an extended workforce for the tech giant.

This model showcases a dynamic and flexible cooperation involving both permanent and gig workers and how promising the future of the contingent workforce in Fortune 500 companies is. This B2B model’s distinctiveness can be noted in its ability to integrate freelance and contract workers into the production chain successfully.

In this partnership, Foxconn can be considered a B2B service provider. It has access to a vast pool of on-demand workers, whether for specialized tasks or for peak times. 

Access to gig workers enables Foxconn to handle varied production demands while operating in a conventional manufacturing setting. This dynamic contingent talent sourcing framework helps follow a flexible resource utilization approach.

B2C Business Models

The gig economy business models also include the B2C model. The following case study sheds light on the impact of this economy on this business model:

Uber is an excellent example of the integration of the digital labor economy with the B2C market. In its model, Uber is a facilitator and helps connect consumers requiring transportation with independent drivers operating their vehicles.

The adaptability of this model depends on the gig economy. The drivers, in this case, are freelance drivers and can work on their own terms. They become a flexible and dynamic workforce by choosing when they are available for work. 

Uber’s business model operates as one of the most profound gig economy trends USA in the current moment. It involves independent and short-term work contracts. It enhances end-user experience by using tech-based features such as:

• Live location tracking
• Digital payments
• Upfront pricing

The consumers, thus, receive an on-demand and convenient transportation solution. Thus, the integration of the contract-based economy with B2C principles benefits not only the consumers but also the ride-hailing drivers seeking opportunities for generating income. Thus, this economy creates a mutually beneficial relationship between the new nature of work, technology, and business.

The Future of Work Gig Economy

The number of freelancers has increased significantly over the past few years. The growing prevalence of artificial intelligence (AI) in programming, content development, graphic design, and other areas has raised concerns about the future of work gig economy in various sectors. 

Still, the following statistics shed light on the future of the freelance economy: 

• According to McKinsey, there were 36% independent workers in the U.S. in 2022. The figure was 27% in 2016.
• According to Global Workplace Analytics, 70% of the overall workforce is likely to work remotely 5 days or more a week.

Conclusion

When you outsource in the gig economy, you will be leveraging an effective way to acquire specialized skills and talent. Such an approach goes beyond reducing costs. It also increases flexibility. You will be accessing the vast pool of independent contractors and freelancers to complete your projects. Still, effective outsourcing in this economy relies on factors such as proper planning, communication, and management. If your organization can implement the right practices, you will be well-positioned to benefit from an increasingly connected and complicated world of work.

If you need professional staffing solutions for your organization, feel free to contact Infojini Staffing Services. Contact us today at 410-919-9440 or write to us.

Hiring the Right Fit – Strategies for a Skilled and Diverse Workforce

• • Competition in the Job Market
  • Cost of Hiring
  • Skill Shortages
  • Attraction and Retention of Skilled Workers
  • Diversity and Inclusion in Hiring

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