People Management & HR

How your business can capitalize on the gig economy

  • 5 min Read
  • February 18, 2022

Author

Escalon

Table of Contents

A whopping 4.3 million Americans either quit or switched jobs in December 2021, according to the U.S. Bureau of Labor Statistics, a reflection of what has been popularly dubbed the Great Resignation amid the pandemic, as workers evaluated their priorities and adjusted to new ways of organizing their lives.


Now a Wonolo report called The Voices of the Gig Economy finds that “greater flexibility” is a primary reason for 63% of the job search site’s app users in seeking a new position, based on a survey of 3,000 respondents.


This dynamic of seeking new opportunities with greater flexibility, sparked by the pandemic, may be here for the long haul. In its World Development Report 2019 , the World Bank says the global job market of the future will largely be filled with independent gig jobs rather than full-time, in-house positions.


Meanwhile, projections from the Freelancing in America Survey 2017 show that 50.9% of the U.S. workforce will be performing freelance work by 2027, assuming the current growth rate of freelancing continues.


Businesses eager to replace departing employees can benefit from this growing gig economy. For starters, it provides them with access to talent during a period when it has become increasingly hard to hire full-time employees. Further, participating in the gig economy can benefit businesses in the key areas outlined below.


Three ways employers can benefit from the gig economy



1. Cuts costs

– By using gig workers, research suggests employers may reduce costs by as much as 60% versus hiring a traditional employee. In addition to not paying a full-time salary, they also save the 30% of the average worker’s compensation that goes toward benefits such as health care. This money can instead be reinvested into the business. Further, not having to maintain the expense of an office and its infrastructure and equipment brings employers even greater savings.


2. Simplifies onboarding

– A typical small- to medium-sized business that onboards 100 new workers per year will spend about $40,000 on the effort, or $400 per employee, according to HR Onboard. By working with freelancers, the onboarding process is dramatically sped up as you are hiring an external resource. Also, hiring a gig worker enables businesses to trial prospective employees rather than go through an extensive recruiting process first.


Talk to us about how our back-office services can help your firm access financial expertise.



3. Fills seasonal employment needs

– Freelancer workers can help businesses manage the ups and downs in demand based on seasonality, and some 56% of businesses currently use gig workers to finish projects for which existing employees do not have the skills, according to EY.

Further, “organizations are using contingent workers to overcome resistance to change within legacy workforces. A contingent workforce can help drive and accelerate change … Given the extraordinary pace of technology change, contingent workers provide a critical bridge to integrating new products, services, technology and more into operations, without having to expand full-time equivalent headcount,” says EY’s “Contingent Workforce Study.”


How your business can tap into the benefits of the gig economy



Here are four ways that employers can maximize the productivity they realize from gig workers.

1. Understand the different types of gig worker

– Gig workers comprise freelancers, contract-based workers and part-time workers. Freelancer workers tend to be available most of the time, while contract workers usually dedicate specific time slots to businesses. Part-time employees may or may not come into the workplace.


2. Establish a clear goal

– Before approaching a gig worker about a job, list what things you need them to accomplish in a given timeline. You can use this list to gauge their performance if you decide to continue working with them.


3. Keep communication open

– Sometimes employers can’t work successfully with gig workers because the business’s communication channels are not set accordingly. The gig worker may be forced to communicate with multiple people in the business for approvals and follow-ups, for example, which can create delays. Most gig workers work with several clients and won’t want to continue working with a client who makes the job too complicated. To circumvent this possibility, assign one or two people to interface with the gig worker.


4. Consider it a partnership

– It’s best to view the arrangement as a partnership rather than simply assigned work. Because gig workers often work with multiple clients, they may be able to provide you with valuable input.

Also, keep in mind that while gig workers like their independence, they may be open to a bigger commitment depending on the company. And working with freelancers is a great way to try out people, not just in terms of the quality of their work but also fit, before adding them as a staff member.


Want more?

Since 2006, Escalon has helped thousands of startups grow faster with our back-office solutions for accounting, HR, payroll, insurance, and recruiting and taxes — and we can help yours too. Talk to an expert today.

Talk to our team today to learn how Escalon can help take your company to the next level.

  • Expertise you can trust

    Our team is made up of seasoned professionals who bring years of industry experience to the table. You gain a trusted advisor who understands your business inside out.

  • Quality and consistency

    Say goodbye to the hassles of hiring, training and managing in-house finance teams. You will never have to worry about unexpected leave of absence or retraining new employees.

  • Scalability and Flexibility

    Whether you’re a small business or a global powerhouse, our solutions scale with your needs. We eliminate inefficiencies, reduce costs and help you focus on growing your business.

Contact Us Today!

Tap into the latest insights from experts in your industry

Accounting & Finance

Understanding Customer Lifetime Value and Its Impact on Strategy 

In the world of business, not all customers are created equal. Some make one small purchase and disappear, while others...

Accounting & Finance

Tax Strategies for Succession Planning in Family-Owned Businesses 

Succession planning in a family-owned business is a delicate dance that involves not only leadership and emotional considerations, but also...

Accounting & Finance

The Role of Financial Modeling in Strategic Planning 

Financial modeling is a cornerstone of strategic business planning. It involves creating numerical representations of a company’s financial future, allowing...

Accounting & Finance

The Importance of Financial Literacy for Business Owners 

Running a business isn’t just about having a great product or service – it also requires a firm grasp of...

Accounting & Finance

Tax Implications of Remote Work: What SMBs Need to Know 

The rise of remote work has opened exciting possibilities for small and medium businesses – access to a wider talent...

Leadership & Growth

Succession Planning: Preparing for Leadership Transitions 

Change is inevitable in business, and one of the most significant changes a company can face is a leadership transition....

Accounting & Finance

Sales Tax Compliance in the Digital Age: Challenges and Solutions 

The rise of e-commerce and digital business models has revolutionized how companies reach customers, but it has also added new...

Leadership & Growth

Implementing Lean Management Principles in SMBs

“Lean management” might conjure images of big manufacturing plants fine-tuning assembly lines, but the principles of lean are highly relevant...

People Management & HR

Developing a Competitive Compensation Strategy for SMBs

For small and medium-sized businesses, a competitive compensation strategy is key to attracting and retaining the talent needed to grow...