Can you make any money from the Gig economy?
With so many freelance websites popping up, and more and more people choosing to apply their skills and work from home, we wanted to explore the so called ‘gig economy’ and answer your questions on whether it is a sensible way to make money online. This is what we found.
The gig economy is where organisations prefer to engage freelancers and independent contractors rather than hire full-time workers. The benefit to the organisation is they can secure the services of somebody from anywhere in the world, which often means the resource is cheaper than hiring locally.
They can also save money on other expensive employment costs by not having the employee on their books, and not paying National Insurance, pension and other employee benefits.
The obvious benefits to the gig worker is the ability to work from anywhere in the world, not lose time in their day travelling to work, and gain clients through an online service, therefore not having to find the work directly themselves.
As you can see, the gig model has a number of benefits for everybody involved.
We have taken a closer look at the gig economy in order to understand why people would rather work with these companies rather than go for a full time job.
Most of the research on this topic has been carried out in U.S, however many of the findings would no doubt apply to other countries too hence we have decided to use it.
Firstly, lets look at some stats:
- If given the chance, sixty-three percent of executives would prefer to be freelancers instead.
- About Twenty percent of full time contractors in the U.S make over a Hundred thousand dollars per year.
- Over Fifty-seven million U.S people (thirty-six percent of U.S workforce) were freelancing in 2016 alone.
- An average of 7.6 million people worldwide are expected to be freelancers in 2020.
- Over seventy-four percent of workers in North American Offices would rather quit their present jobs if they got an opportunity to work from home or remotely.
- According to forty-four percent of business leaders, the volatile nature of work demand remain the number one reason to outsource work to freelancers.
- Lastly, an incredible forty-four percent just wish they liked their work more while sixty-nine percent of millennials would rather chose jobs that gave them a balanced life/work.
The long time personal finance writer Kathy Kristoff who has worked in this field for a considerable time wrote a blog called Sidehusl.com, which is where she and her editors have looked into twenty-one categories of gig type work and provided insight and research on the topic.
To support her research, a survey was carried a year ago and it was discovered that the freelancers average pay was almost half of those who work full-time i.e $36,500 versus $62,700.
Kristoff pointed out in her blog that there are of many ways to earn, highlighting where one gig in particular could pay $50 in an hour, which is obviously a really good rate to work from home. On the flip side of this there were many gigs that don’t pay well at all. sifting the wheat from the chaff is one of the problems as a gig worker.
How companies exploit Giggers
The companies that tend to exploit the gig economy, according to Kristoff, always keep the key elements of their gig hidden. This is so the workers will never find out how poor the rates they have been offered are or how risky and time consuming the job is until the freelancer has put in a huge amount of their personal time and their finances also.
This is the major reason why she and the team of bloggers at SideHusl designed what they named Husl$core to monitor every job and opportunity on their blog. The Husl$core ranges from five dollar signs to one dollar sign.
The gig economy’s limited opportunities to accumulate wealth may explain why only 25 percent of boomers surveyed by T. Rowe Price said they associated accumulation of wealth more with the gig economy than with traditional work.
Long and short term jobs in the gig economy
Gig economy jobs are also often intermittent and short-term, although some companies are trying to change this.
One firm called WAHVE finds gig-economy, work-at-home jobs for retired people in the insurance and accounting fields and enjoys making long-term matches. “I provide a steady income; we have some WAHVE workers who’ve been working for the same companies for eight years,” said Sharon Emek, CEO and founder of WAHVE.
Emek hopes to expand WAHVE to place work-at-home retirees in all fields with knowledge workers.
No employee benefits for gig workers
Finally, it’s important to know that the majority of companies offering work to the gig economy do not offer any health or pension benefits.
According to a survey by Prudential, only forty percent of gig workers in U.S have health insurance. Just sixteen percent of the freelancers are given access to a retirement plan by their employers this means that now only half of U.S workers have these particular benefits.
There are some gig companies such as Tilr, Lyft and Uber, who make arrangements with finance companies to let their workers make payments into their separate pension accounts, but this is not common among the majority of sites.
Top tips for finding gig work
List of Your Skills
Firstly list out your skills that could be valuable to others, or that you consider yourself to be an expert in. Think about some of the responsibilities you have had in your previous jobs and think ab out whether they are transferable . This process might surprise you as you realise that you have more to offer than you might think.
Manage your time and schedule
Think carefully about when you will be carrying out your work especially if you are going to mix this with your full time employment. Would you have time on the weekends? Nights? Once you have a clear idea of how much time you have and when you are available, evaluate whether this will be sufficient based on the work you have decided to do.
Provide good quality
The best gig workers are ones that generate repeat business because the quality of work is carried out to a high standard. You never know whether the same customer will want more work done, and also most sites will allow the customer to complete a rating on you. Never compromise your work as your reputation depends on it!
So to summarise, gig working has it’s benefits however it also has it’s downsides. You get all of the benefits of working from anywhere in the world, and by having a particular set of skills you can probably earn fairly good money.
The downsides are that not all of the companies pay that well, and you don’t get the benefits of being employed. These benefits do add up, so if you are thinking of moving to gig working, make sure you consider the cost of not having these benefits.
Thank you for reading our review of the gig economy. Here you can check out our review of the top freelance sites and what each one of them has to offer.
High & Wise