Rise of the Temp Jobs and the Freelance/Sharing Economy

The Emerging Uber Economy

Most if not all of us would have heard of the ride sharing cab aggregator Uber. Anyone who has taken a ride with the associated drivers belonging to Uber would be aware that the cabs and the drivers who work for the company are not regular full time employees but just about anybody who has a car and has “signed up” with the company on a part time basis.

This is the business model where unlike in the traditional rent a cab model, Uber works by allowing anyone to register with them and work for them on a freelance basis. Similarly, this “sharing model” is now being adopted by other companies such as AirBnB which lets house owners let their spare rooms to be used as “Bed and Breakfast” motel rooms without necessarily turning their homes into full fledged hotels.

Further, there are many freelance work sites such as Upwork-Elance, Craigslist, and People per Hour that “connect” freelancers with potential clients and thereby “facilitate” the exchange of work between buyers and sellers on a part time basis. Indeed, some estimates suggest that nearly one third of the total workforce in the United States is now engaged in some form or the other of freelance work.

The Rise of the Temp Economy and its Implications for Workers

This has implications for the upcoming generation of workers who would find that “lifelong employment” and a stable and secure job are things of the past. Instead the motto for the future is sharing one’s skills and expertise through online and mobile portals with potential buyers for a fee and where the mode of working is temporary and devoid of any longer term contractual and stable work arrangements.

Employers Benefit More than the Workers

This trend of increasing instances of employers hiring workers for the shorter term without any longer term commitments and without having to pay for their healthcare, social security, pensions, and other benefits that characterize longer term employment means that employers save huge amounts of money.

Further, they can hire according to seasonal demand and whenever a project comes up instead of hiring employees and keeping them on the “bench” until the projects are finalized. Already employers are saving on the benefits by hiring temps and added to this is the purely temporary nature of work which results in savings in areas ranging from idle capacity to easier hiring and firing.

Therefore, this temp economy or the gig economy does indeed benefit the employers and one of the reasons for employers worldwide pushing for temp work is the very tangible benefits that they get from this business model.

Goodbye to Stable and Secure Longer Term Employment

On the other hand, things are becoming harder for the workers as they no longer have what is called as a stable and secure job. Instead, they flit from assignment to assignment and from gig to gig all the time remaining on the margins.

Though employers claim that temp work is priced higher and that the workers benefit, it is undeniable that competition from lower wage workers from other countries such as the emerging and the developing countries in Asia and Africa not to leave out Latin America means that workers in the developed world are being hit by a “double whammy” of lower wages and no secure and stable work.

Workers Worldwide Better Be Prepared

Indeed, globalization and technological advances means that any employer anywhere can hire workers for temp work anytime and every time from everywhere. Unless one is talking about purely geography dependant work such as Uber, most of the work available in the gig economy can be done from anywhere.

While this presents opportunities for workers in the Third World since all they need is a stable power and internet connection and the ability to work hard as well as be innovative and inventive, the same cannot be said about workers in the developed world who have to contend with the problems of lack of permanent employment and to rub it in, the very real prospect of declining wages both in absolute terms and relative terms.

The emerging temp economy has been variously called the Uber economy and the gig economy and the reality for workers around the world is that in future job and work are not things that one can take for granted but instead, one has to work harder and be agile and nimble all the time thereby remaining competitive.

Indeed even workers in the developing world have to be on the lookout for competition from even lower wage workers from the bottom of the heap. This “race to the bottom” means that unless one is constantly reinventing oneself, there is no guarantee that one can find work all the time.

How Workers Can Remain Competitive

While it is beyond the scope of this article to analyze the ideological aspects of this emerging economy, nonetheless the fact remains that what we are witnessing is a transformation of work itself and the way the “social contract” between workers and employers is being redefined.

Therefore, our advice here for prospective graduates and those entering the workforce is to ensure that they update their skills on a continuous basis and develops that “X Factor” which would distinguish them from the competition so that they remain in the reckoning.

On a concluding note, we would also like to point out that all workers everywhere better realize that the good old days of stable and secure employment are being converted to a ruthless marketplace for workers where the ability to bid lower, the ability to go beyond customer satisfaction and instead, aim for customer delight and customer wow are the things that would serve them well in the future.

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