The rise of the gig economy in Singapore and Asia
The gig economy is rising quickly, and as the priorities of the incoming workforce shift, its prevalence among Millennials is clear. While this type of work offers the advantage of schedule control and readily available work, it’s not without issues. One thing is certain: this trend towards freelance and short-term work is affecting not only the traditional labour environment but the global economy.
What is the gig economy?
In this environment, workers seek freelance jobs (or gigs) and independent contracts above full-time employment. Clients use platforms to contract workers to pick up short-term gigs for a fraction of the cost of hiring an employee. The client gains the ability to outsource work with minimal cost while the freelancer gains income and the freedom to control the climate of their work. With 48% of 13,000 college students polled in 2016 stating that they don’t want to work within the confines of a traditional job, it’s no surprise that Millennials gravitate towards this option.
Why is it growing in popularity among Millennials?
The nature of the gig economy lends itself to the unique work ethic of Millennials. While previous generations often adhered to the adage that time equals money, Millennials view their time as a resource to be valued. Having the option to pick up short-term contracts while maintaining their social, educational, and artistic commitments drive many Millennials away from traditional work towards freelance opportunities.
While one study reported that 57% of Millennials credit unpredictable income as their biggest challenge, their desire for financial stability doesn’t appear to be as big of a driving force in choosing work as their need for flexibility. For instance, the nature of bidding for and undercutting prices to land work is common within this system, driving down the possibility for economic prosperity. Yet the gig economy continues to grow among Millennials.
Benefits of the gig economy?
In nations like China, where economic growth has slowed to a 25 year low, part-time work is gaining popularity among multiple generations. Despite its economic weaknesses, the gig economy can be a win-win for both the client and worker. The client can delegate tasks without the risks and responsibilities of hiring employees. Meanwhile, the worker receives income and control over working hours even when employment opportunities are scarce.
In fact, countries like Malaysia are starting to recognise the potential benefits of the gig economy, and they are using it to increase work opportunities for their citizens. Government agencies like The Malaysia Digital Economy Corporation (MDEC) are working to provide help for Malaysians in utilising gig-based platforms.
While for some workers, short-term gigs are an optional way to increase income, the gig economy is a necessity for others in countries experiencing low employment.
How does the gig economy affect Business and HR?
The gig economy can be beneficial to many people; however, its fractured nature reveals pitfalls related to job security and quality of life. Workers in positions of privilege are better equipped to handle the ebb and flow of this system. This can leave those most in need of work without options, and there are few safeguards to protect them.
Despite the risks, the gig economy continues to grow, and organisations need to consider this trend when recruiting new hires. A study of over 2,000 companies showed 65% of employers reported issues with obtaining employees while a similar study found 59% of employees in Singapore felt disengaged from their employers. Looking at these findings can shed some light onto how companies can prevent top recruits from choosing freelance work over employment.
Knowing what drives high-performing prospects to accept work and adjusting to those values could be an effective way to win over top candidates. Especially when considering their desire for the stability offered through traditional employment. While there are many advantages to short-term work, even its biggest proponents can agree that unpredictability is a challenge to be addressed. Companies who address those challenges while learning to work with the priorities of the incoming workforce could have the advantage in combating the growing popularity of the gig economy.
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