Millennial shift to gig economy gathers pace

Attracted by the opportunity to work as much or as little as they like, and to work the hours that suit them, younger workers are taking to the gig economy in growing numbers. And there are strong signs that they are satisfied enough to stay in that economy for the longer term.

The Gig Economy Index report – commissioned by Hyperwallet, and published by PYMNTS.com – surveyed 1070 freelance workers and found more than a third of gig workers were between the ages of 25 and 34. Across all the age groups surveyed, 51 per cent cited making money as the chief reason for doing gig work, while the next most popular reason was flexible hours at 23 per cent.

These freelance workers don’t appear to be biding their time in the gig economy either: only 11 per cent did it as a stopgap while looking for full-time work, which indicates gig work is emerging as a viable and preferable alternative to traditional employment. A further 65 per cent said they would not quit their gig for a full-time job.

These results show that young people are increasingly turning to the gig economy because it gives them independence and the capacity to potentially earn an income that is comparable, or even better than, what they might find in a traditional full-time role.

This shift is unlikely to be a blip on the radar. Both employers and individuals are moving towards this kind of work arrangement as in many cases it gives both sides a greater set of benefits than traditional employment. Employers appreciate being able to pick and choose the right worker for a project at hand, while gig workers appreciate the opportunity to develop and test their skills in a range of situations and scenarios.

In the uncertainty of the post-GFC age people are less willing to trust that big organisations will provide stable and lucrative career paths. Millennials, especially, have seen their career pathways thwarted by slow growth in the economy and the continued dominance of their older Gen X and Boomer workmates.

Rather than hang around for crumbs to fall from the table, many in this age group have decided to pursue their career goals and passions through freelance work. Online platforms have made it easy for these young professionals to start small and grow their portfolio and client base. According to the survey, 47 per cent of gig workers now derive at least 40 per cent of their income from gig work. 27 per cent source their entire income from gig work.

Because many gig platforms have prioritised payments as an integral part of their service, gig workers are paid a lot quicker than most freelancers working independently with clients: 75 per cent are paid within a week of doing a job. This compares highly favourably to the slow payment times endured by most Australian contractors and small businesses, who often have to wait for between 30 to 60 days for payment. Steady cashflow is vital for anyone working as a freelancer or running a small business.

Secondly, young people have embarked on a more varied career path to their older work colleagues. That’s also partly down to the fallout from the GFC, which led to radical restructuring in many industries, as well as the increased opportunities presented to young people to work globally and online. Online platforms have emerged to facilitate this shift away from traditional professional full-time careers to ad hoc and short-term work arrangements.

The fact is that a lot of smart, young people are feeling empowered by this shift to a more entrepreneurial and curated career path. This bodes well for both employers looking for a talented and experienced pool of freelance workers, as well as the online platforms that are connecting employers and gig workers.

Simon Banks, Asia Pacific Managing Director, Hyperwallet

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