The Gig Economy & Contingent Workforce: Why networking is vital
We all know the days of having one employer, or even one career throughout your lifetime are long gone.
Now, with the rise of the contingent workforce, it appears the days of permanent employment are also on the decline; meaning networking is now more vital than ever.
What is the contingent workforce and the ‘gig’ economy?
The growing group of workers who are engaged by companies on a non-permanent basis is known as the contingent workforce. This group often includes web developers and designers, IT professionals, contract workers, consultants, or independent professionals.
The term ‘gig’ economy describes the landing of each individual contract as an individual ‘gig’ — similar to the term traditionally used by musicians and actors. Workers who choose to be part of the contingent workforce abandon the traditional ‘9 to 5’ working hours, and instead opt to be paid based on completing individual tasks or projects.
According to arecent studyconducted by online jobs marketplace, Upwork, around one third of the Australian workforce works in a freelance capacity, with 57 per cent of them choosing to work this way.
How it came about
Freelance roles have been common for a while but have mainly been limited to writers, designers and skilled trades. However, freelancing is now more common throughout a wider range of white collar industries.
Several factors have contributed to the rise of the gig economy. These include:
- Many Australians want more flexible and diversified work arrangements. This is particularly the case with the younger generation, and older workers.
- The growth of digital platforms has made it easier than ever for freelancers to connect with potential employers (or clients).
- The recent global financial crisis meant that workers who were unable to secure regular employment, ended up freelancing out of necessity.
- The labour market requires workers with more ‘niche skills’ than in previous years. Employing a contractor means employers can make use of these skills, as they need them, without the huge expense of putting on permanent staff.
- Companies have one-off projects that need completing, so resource with a contingent workforce.
Pros and Cons
While having a flexible and diversified approach to work may sound ideal, there are definitely pros and cons for making a career transition into the contingent workforce.
The most obvious benefit for workers is the increased flexibility, and variety of projects available to work on. In addition, freelancing can be quite lucrative — if you find enough work. Working in a gig capacity is definitely appealing for millennials who want careers that provide flexibility, freedom and fulfilment. The fact that they spend a lot of time online, makes it even easier for them to work this way.
Engaging a more casual workforce can help companies manage rising labour costs, and facilitate better access to specialised talent. Generally speaking, freelancers are more adaptive to change, which means higher productivity for employers, and an increased capacity to keep up with the ever-changing marketplace.
A major disadvantage of entering the gig economy, is not having a regular, stable income. Instead, contractors are continuing to ‘hustle’ for work. In addition, superannuation contributions, sick leave, annual leave, and other benefits of permanent employment are now your responsibility.
For employers, attracting and engaging a casual workforce can be difficult, particularly as contractors have the potential to move onto the next gig on the horizon. Similarly, companies who wish to build a workforce committed to their overall vision and culture, may find this hard to do when engaging contractors, whose primary motivation to work with them is to learn, earn, and move on.
The rise of the contingent workforce not only represents challenges for workers and employers, but also Human Resource (HR) departments and recruitment agencies. Employment agencies and HR departments must continue to change their approach in attracting and managing an increasingly transient workforce.
How to make the most of it
The gig economy certainly offers many opportunities to those who value flexibility and variety in their work, over stability in employment. However, to make the most of these opportunities, the following tips may be useful. While they won’t guarantee your success, they will put you on the right path.
Seek expert financial advice— Freelancing means you’re now responsible for your own superannuation, sick leave, annual leave, long-service leave, and any other benefits your employer used to pay. Similarly, you’re also responsible for paying your own tax, so make sure you go in with your eyes wide open to your responsibilities (and what you can claim as tax deductions).
Work out your hourly rate— This will require some thought, but to ensure your gig is going to be financially viable you need to be paid accordingly. Your rate will depend upon a number of things, including what income you’d like to earn, how much you plan to put into super, and how many hours a week you’re going to work. There are a few online rate calculators available to help you.
Treat it like your own business— If you’re going to work as a contractor, you need to be as serious and committed, as if you were running your own business (because you are!) Even if you don’t have paid work, turn up and do something that will increase the chances of paid work.
Set your schedule and be disciplined— While the gig economy is all about flexibility, don’t be so busy flexing that you’re never at work. Schedule your work hours each week and stick to them. And when you’re at your desk, make sure you’re spending time doing work-related tasks.
Limit social time— Don’t abuse the fact that you no longer have a boss you report to and take long lunches or coffee dates. If you work from home, ensure friends and family know that you work during work hours, and that they can’t just ‘drop by’.
Choose your projects wisely— Make sure the jobs you land are right for you. Ensure you’re going to make money on the project, and it fits in with your values. The potential for further work down the track may also come into play.
Deliver the goods — Contingent workers are hired to produce and agreed outcome. That means, you need to actually do what you’re being paid to do — and do it well. If you want to keep winning work, then you need to impress your clients, so they’ll provide referrals or testimonials. Ensure you’re professional, easy to work with, deliver quality work, and get it done on time. After all, you’re only as good as your last gig.
Network, network, network!— Work won’t turn up at your doorstep. You’ll need to go out and chase it — regularly. Set up a website, social media accounts, or a blog. Get out there and market yourself. If you’re not sure how to do this, we’ve included some tips below.
- Update your CV — Potential employers want to know about your previous experience.
- Check out various job boards that may advertise the roles you are interested in.
- Register with an agency — Employers often outsource hiring to recruitment agencies.
- Register with freelancer sites — There are many freelancer sites out there. Find the one that fits your industry or niche and develop a good profile.
- Spread the word — Let your family, friends and colleagues know you’re making a career transition as a contingent worker. They may not want to hire you, but they may know someone who does.
- Ask for referrals — Always ask for referrals, even when you’re not successful in winning a job.
- Go online — Get yourself a website and promote yourself, using social media and other platforms such as LinkedIn.
- Attend networking events — This doesn’t mean attending everything. Choose events in your local area or within your industry where you’re likely to develop meaningful business contacts.
With global trends indicating the gig economy will continue to grow, the Australian workforce is expected to undergo a major transformation. However, by embracing this trend and changing the way we think about work, workers and businesses can all benefit.