The Gig Economy Is Emerging, but Overstated

OUTSIDE THE AGENT POOL

Increasingly, contracting is gaining ground in the marketing departments as well. Many businesses now hand over the development of their projects to third parties. How many will move to gig economy workers as opposed to full-time professionals is unclear.

Sales models are also moving in this direction. “A few of our customers began to use our system for presales calls as well as post-sales inquiries,” notes Directly’s Brydon. In some cases, customer service agents have even helped customers find and buy additional items.

But for most, the true impact of these new gig economy arrangements remains unclear. Headlines tout it as a revolutionary change, one that will eventually replace traditional work arrangements. Proponents note that the contract labor market has been dramatically increasing, up from just 7 percent of Americans in 1995 to 35 percent in 2017; it is estimated to reach 43 percent of U.S. workers by 2020, according to the U.S. Bureau of Labor Statistics.

Others view the gig economy as a modern variation on traditional contracting, which has always had limited niche acceptance. “Most employees take a contract position hoping that it leads to a full-time job,” Fluss points out.

Indeed, sometimes freelance work is a first step as one climbs the corporate ladder. Companies usually will not hire individuals without experience, but getting experience is not easy. Contracting enables a person to add industry-specific experience to her résumé. And among recent college graduates, contracting can be an attractive first-job option, making it much easier to get a second position in that field.

Diving deeper into the labor numbers, many analysts caution that the impact of contracting could be overstated in a number of ways. The percentage of workers relying exclusively on contact work has remained unchanged (about 10 percent of the total U.S. workforce) for the past 20 years, according to Ben Gitis, director of labor policy at the American Action Forum, an advocacy group. While the number of gig economy positions has been rising, so has the number of traditional, full-time positions.

Even Directly’s Brydon admits that his firm’s products have typically supplemented rather than replaced traditional contact center agents. Most businesses will continue to rely on traditional contact center personnel, he says, noting that “certain transactions, like a credit card fraud dispute, require that a customer talk to a company representative ASAP.”

CLARIFYING MISCONCEPTIONS

Another misconception is that gig economy work arrangements are appealing to Millennials more so than to other generations. That is not necessarily the case, according to many experts. In fact, only 24 percent of Millennials—people born between 1981 and 1996—report earning money from the gig economy. The percentage of Millennials with full-time jobs rose from 45 percent in 2016 to 66 percent in 2018, according to data from the Economic Innovation Group (EIG) and Ernst & Young.

Data does seem to support the gig economy not as a new form of full-time work but rather as a variation on the side job. A study by Earnest showed that many workers in the gig economy earn less than $500 every month, hardly making it a viable full-time option. Airbnb hosts generate the most monthly income, at $924, while the average Uber drivers earn $364 per month.

Also, businesses still seem to prefer full-time employees. The 2018 Ernst & Young Growth Barometer, an annual global survey of midmarket company leaders, found movement away from part-time workers, with a number of companies viewing their full-timers as more loyal and committed.

Thus, gig economy positions are becoming more prevalent, but their impact is more on part-time than full-time positions. “So far, the gig economy is not reshaping the labor force in a dramatic way,” concludes American Action Forum’s Gitis. Full-time positions remain the dominant hiring model, but new options are emerging for those who want to pick up a part-time gig, he and others say.

Paul Korzeniowski is a freelance writer who specializes in technology issues. He has been covering CRM issues for more than two decades, is based in Sudbury, Mass., and can be reached at paulkorzen@aol.com or on Twitter @PaulKorzeniowski.