What Is The Gig Economy And Is It Right For You?

Over the last year or so you’ve probably heard all about the “Gig Economy.” Its most commonly associated with IT specialists or freelancers, but what is it exactly? The gig economy has been around for a long time but has been gaining traction, and a fancy new name, since the recession started in 2007. What do you need to know about gigging and is it right for you? Before you jump in with both feet, here is a little history and some important things to consider.

  • What is the gig economy? The gig economy currently refers to a culture of employment where temporary assignments, freelance jobs, and contract positions are prevalent enough that some people make their entire income through these employment models. Employers are also embracing the gig economy by employing specialists on a contract basis or hiring freelancers to complete specific tasks or projects. Since the economy began to recover as the millennium turned the calendars to the second decade, many people who were out of work during the recession chose not to return to the traditional job market. Experts currently believe that 43% of all U.S. workers will be a part of the gig economy by 2020.
  • Why would you consider the gig economy? People cite a variety of benefits to working freelance, contract, or temporary as part of the gig economy. One of the most common forms of gig employment is independent contracting. In this case, you would work for yourself and take on projects with companies who need expert help, such as with IT consulting or freelance writing. You are able to decide which hours you work and how much work you can take on at any time. You have to maintain the quality of work your clients expect, but you are the one calling your own shots. Other workers within the gig economy prefer to work short term temp assignments with agencies or contract firms.
  • What drawbacks should you know about? Within the gig economy, freelancers and independent contractors work for themselves. They are responsible for all their own taxes, including the self-employment tax, at the end of the year. If you work this way, you will receive 1099 forms from your clients during tax season. Temporary employees who work for staffing firms are considered employees of the company and will receive a traditional W-2. Freelancers also won’t qualify for group benefits through their employer, so healthcare costs can be much higher. As a freelancer, you would also not receive benefits such as vacation time or sick days. And for some people within the gig economy, paychecks aren’t always steady so income can be variable throughout the year.

How can you be part of the gig economy without the uncertainty? A staffing agency, like US Tech Solutions, can work with you to find temporary positions with established clients with the flexibility you want. Call us today!

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