A 101 guide to understanding the gig economy
Over 1 million Australians are currently self-employed as independent contractors. Many of these people would classify themselves as part of Australia’s growing gig economy.
In this piece, we explore what the gig economy is and why more and more people are choosing to work in it.
What is the gig economy?
The ‘gig economy’ is a term often used to describe the shift away from the traditional model of employing a full-time staff member to one that is gig-based. It sees businesses use the services of freelancers or independent contractors on a per-project or task basis.
Gig-based employment exists across a broad range of jobs and industries. Perhaps best known are the riders and drivers who deliver food for the likes of Uber Eats and Deliveroo, or the people who take on the odd jobs and projects that some two million Australians post on Airtasker.
Increasingly, specialty industry marketplaces are connecting businesses to talent of all kinds. Weploy provides on-demand administrative and support staff. Sidekicker operates in the hospitality, event, admin and promotional space. There are Commtract and Cavalry Freelancing for creative and communications freelancers; MEETIG8 for risk, compliance and audit consultants; LawPath, which links businesses with a network of lawyers and legal services online; and Expert360 for individuals seeking corporate professional gigs spanning HR, technology, finance and operations.
The rise of the gig economy
The diversity of industries now offering gig-led employment is reflective of its rising popularity in recent years. Often described as ‘the future of work’, freelancing currently makes up 35% of the American workforce and 16% of the European Union workforce. Freelancing has also grown in popularity in Australia over the years with many of us taking up the chance to be our own boss.
Pros and cons
Job satisfaction, work/life balance, and the freedom and flexibility to choose when, where and how you work are some of the key benefits of the gig economy. It can also provide additional income for those who already have a full-time or part-time job.
However, for some, the downfalls of being an independent contractor may include irregular and underpaid work, lack of job security and a stable income, and the loss of entitlements given to employees, such as sick leave, holiday pay, superannuation and regulated working hours and conditions.
It’s hoped that as the gig economy grows larger it will become better regulated with contractors given more rights and protections.
The gig economy terms to know
Gig economy: When businesses engage the services of freelancers or independent contractors on a ‘gig’ basis – for example, for specific tasks or projects.
Online marketplace: In the gig economy, an online marketplace is a platform or agency that helps connect businesses or individuals with freelancers or contractors to undertake short-term work or tasks. They can take various forms and operate in a range of ways, but, generally, use technology to streamline and manage the process between the two parties.
Independent contractors: An independent contractor is someone that works for themselves. As they run their own business, they manage the conditions, such as rate and hours, of their work, tend to use their own tools and equipment, can work for multiple clients, pay their own tax and don’t receive employee entitlements, such as paid leave or super.
Joining the gig economy
If you’re thinking about trying the gig economy for yourself, here are a few tips that may help you to get started.
Do your research
Before you undertake any work, do some research. Look into how much work exists in your sector, what rate you should be charging for your level of experience and expertise, and how much income you could hope to generate. Learn what your rights and obligations are as a freelancer or contractor. Doing your research is essential!
Use reputable platforms
Chat with freelancers you know about how they find work. Seek out online industry-related groups, such as Freelance Jungle Australia. They are often great outlets for asking questions, seeking advice and sharing knowledge. Read up on and join reputable online marketplaces or job platforms. Just be wary of any of that ask for free work trials or offer low rates.
It’s important to be across any financial or legal obligations you’ll have working for yourself, such as taxation or superannuation. Other considerations further down the track may include things like business insurance, and professional indemnity and public liability insurance. Having these in place can help ensure you’re protected if anything unexpected occurs.
Are you considering starting up your own side hustle? Choosi lets you compare business insurance to protect your future goals.
2 Jan 2019