The “gig economy”. That is supposedly where we are headed. There are predictions based on a study by Intuit that by 2020 over 40% of the workforce will be working “gigs” rather than full time permanent employment. This is nothing new. Thirty years ago, Tom Peters predicted the “Corporation of One” in which everyone working for a company would be consultants rather than employees.
A “gig” is a term in music and performing arts that designates a paid appearance of limited duration. Those of us who are consultants, and work primarily on short term contracts (less than a year in length), are familiar with the concept and use the term “engagement” as a more sophisticated term than “gig”. “Gigs” are becoming more common in the IT industry now, rivaling the performing arts arena in numbers. As such, it seems that the concept of a series of short term work engagements may be in the future if you are working now in any area of the IT industry, especially as project managers, software developers, business analysts, testers, database administrators, data analysts, and so forth. Any project-oriented position, which means anyone who works on projects (rather than processes) is subject to being “gigged”.
Why a ‘gig’ economy?
Companies have several reasons for “gigging”:
- Since each project is unique and likely requires different skills, the organization can bring on the expensive expertise necessary for the one project for only the duration of the project and not commit to skills that may not be needed thereafter
- In the US, the organization does not have to pay benefits to contract or temporary workers, such as insurance, retirement, or leave time
- In the US, the organization does not have to pay social security taxes on the contractors
- The budget for a contractor can be fixed
- The cost of acquiring and terminating contract workers is much less than with a full time employee
- The HR cost for contractors is significantly less than for employees
- The organization can “try and buy”. If a contractor doesn’t work out, the contractor can be removed without notice and replaced forthwith. If the contractor does work out and there is a good relationship, the contractor can transition into employment
- The burden of responsibility for quality is on the contractor rather than the organization’s mid-level management. In other words, the mid-level manager does not have to apply motivational tricks and such since the contractor’s continued earnings depend on the job the contractor is doing. No other motivation is necessary.
- There is a proliferation of websites and organizations devoted to providing contract workers, especially in the IT business.
- Technology today allows work to be done from anywhere rather than an office which means an organization does not have to pay for office space, office supplies, in-house cafeterias, and other artifacts necessary to the care and feeding of full time employees on site.
And there are more reasons for organizations to increase the number of contracted workers while reducing the number of full time employees. Power structures, except in government, are not as dependent on numbers of full time staff working for the manager. So, senior managers are more willing to cut costs by going to contractors.
For many companies, the transition started with the recession of the last decade.
And for many more companies, as baby boomer employees retire, the organizations are not replacing them with full time employees but bringing on contractors instead.
If the predictions come true, and signs are certainly supporting that premise, full time employment opportunities may be drying up as the positions are replaced by contract workers. When you are in the job market, you may find that you are competing with contract workers as well as others looking for full time employment. You may find yourself forced into the contract market whether you want to be or not.
For the younger people reading this, it probably is not a matter of if, but a matter of when.
Some tips on making yourself viable in a gig economy:
- Hone your skills, especially the skills that are in demand and skills that are somewhat esoteric (the former keeps job opportunities available but probably at a market rate; the latter reduces your competition and allows a higher rate of return although the number of opportunities may be less).
- Network. Connect with those organizations that act as agents for contract workers and consultants. Keep contacts at every organization you have worked for, and with your peers who may go to other organizations. Any contact may be a lead into another contract
- Keep abreast of technology. Don’t find yourself with skills that are no longer needed. Make time for training and learning new technologies.
- Rework your resume to list your accomplishments and your contributions to organizations rather than a laundry list of the organizations you have worked for and your positions
- Decide whether you want to work on an hourly or daily basis, pick a range of rates (making sure you have a bottom line below which you will not go—remember that the organization will typically try to get you at the lowest rate you have charged even if that was to a “favored customer”), determine how you will pay for incidentals like travel and living if you are on site away from home, and so forth
- Set up your home to be able to work comfortably and productively should that be a requirement or option
- Enhance and guard you reputation carefully; you may find yourself living and dying based solely on your reputation
The biggest issue for the contractor is that of quality. You are responsible for the quality of your work. There is latitude when the organization hires an employee. Late arrivals may be tolerated for a while and some disciplinary discussions may be in order. Many organizations view an employee’s lack of motivation or performance to be at least in part the responsibility of the manager and so the employee may be given third, fourth, and fifth chances. In many organizations, there is a long process of disengagement when an employee does not work out with a number of poor reviews and warnings before termination action can be taken. A full time permanent employee is expected to be, well, permanent.
Not so with a contractor. Unless you have a contract that specifies differently, you can be removed on the spot and compensated just for the work done. And if you are being paid “by the piece” (for example, writing a fully executable piece of code, or completing 50 test cases for a system) you may not get paid at all if the “piece” is not completed. The onus is on the contractor.
In other words, in the “gig” economy, you are on your own and cannot blame your fellow office workers, your manager, office politics, or anyone else. Your success is your own and both failures and successes will follow you from gig to gig.
While this appears daunting at first, for the individual the ‘gig economy’ will be freeing and exhilarating, rewarding and fulfilling. You can work on the jobs that challenge and excite you and not have to do “scut work” or “busy work” between projects. You don’t have to play politics. You can focus on the work and your performance. You can work when you want to work and take off when you want. (I have a friend who works hard six months of the year and then takes a “vacation” to go surfing and beach combing for the other six months in different parts of the world.)
In the end, the gig economy means that you, and only you, will be responsible for your success, and there is probably no better way to be.