The growing gig economy in the US

The Growing Gig Economy in the US 

 

What is the gig economy? 

 

The gig economy is a growing trend in the US and it’s re-shaping the way many people work in the states. The gig economy refers to a labor market characterized by short-term contracts or freelance work rather than traditional, long-term employment. Workers in a variety of industries such as technology, construction, healthcare, marketing, food delivery, and others take part in the gig economy. 

The gig economy in the US is thriving due to many factors, such as advances in technology, business demand, and a common desire workers have for flexibility.

In the Freelance Forward 2022 Report, Upwork reported that:

  • Freelancers contributed $1.35 trillion to the US economy in annual earnings in 2022
  • The volume of professionals who freelance hit an all-time high in 2022, increasing to 60 million Americans
  • Millennials and Gen Z are the most likely to explore freelancing

Understanding the gig economy is important for international recruiters looking to hire in the US, as it can have an impact on the types of workers you recruit and how you manage talent. 

 

3 reasons the gig economy in the US is growing 

 

1. Advances in technology

Advances in technology have played a significant role in the growth of the gig economy in the US. New tech and apps have made it easier for gig workers to connect with customers and perform work on the go.

Online platforms such as Upwork, LinkedIn, Uber and many others have made it possible for gig workers to find and secure work, as well as for businesses and individuals to access a global pool of talent.

New tech platforms have made it easier for businesses to manage their contracted workforce. Some platforms allow businesses, such as recruitment agencies, to review timesheets and expenses for contractors all online, in one place. Businesses can collect and analyze data on their workers, allowing them to make more informed decisions about hiring, compensation, etc.

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2. Business demand

Businesses in the US are tapping into the gig economy for several reasons. Many businesses are facing the impact of inflation and labor shortages. By hiring contractors or freelancers instead of traditional employees, businesses may be able to cut costs on expenses associated with benefits and payroll taxes. Additionally, businesses may be able to save on office space and equipment costs, as many gig workers work remotely and use their own tools and technology.

 

3. Flexibility

A main draw for gig workers is the flexibility and autonomy it provides. Many gig workers have control over their work location and schedule. This can be particularly appealing to younger generations and those seeking a better work-life balance. If working remotely, gig workers may also benefit from the opportunity to work with international customers, as well as domestic customers.

There’s potential for gig workers to earn more money than they would as a traditional employee in their industry, because they may have the flexibility to take on multiple gigs or negotiate higher rates with their customers. Additionally, taking part in the gig economy can provide opportunities for individuals to gain new skills and experience, which can be valuable for their career and development in the long run.

The gig economy also offers the benefit of flexibility for businesses. By hiring contractors or freelancers, businesses can scale their workforce up or down as needed to meet changing demands. US businesses may also turn to the gig economy when they’re in need of a worker with specialized skills, as they may be difficult to find in traditional employee pools. 

 

What recruiters should know 

 

It’s important for recruiters to stay up to date on the US legal and regulatory landscape surrounding the gig economy. The classification of workers as independent contractors versus employees is a particularly important issue, as it can impact a worker’s legal protections and access to benefits.

International recruitment companies who are interested in tapping into US contract talent should consider consulting with trusted legal, accounting and compliance professionals to ensure maximum compliance in all 50 US states.

 

Disclaimer: This post is provided for informational purposes and should not be considered legal advice, the final word on this topic or a political opinion.