In Australia, the COVID-19 pandemic left in its wake an economy that had a quarter of a million more vacancies than before the pandemic. Of course, this kind of a statistic comes across as unlikely, to put it mildly, but it starts to make sense when you understand how this statistic has come about. In fact, right around July 2020, when the pandemic was still in full swing, the Australian labour force reported that unemployment had reached a historical low, with only 6.8% overall unemployment.
The reason behind these facts, as well as a sea change in the overall Australian economy, is the rise of the gig economy.
An Unprecedented Boom
The pandemic played its part in making the gig economy more popular, but it had been on the rise for quite some time. Although it was relatively small in size, it reached a total size of $6.3 Bn in 2019 - in a time period of only 4 years. This increase in size amounted to a 9x increase, which is no small feat. Then, in August of 2020, there were 111,000 new jobs created which was unexpected growth, since it was driven by “non-employees” - those who aren’t traditionally employed by a particular company, working full-time hours and getting steady salaries as well as benefits such as superannuation payments.
According to Callam Pickering, an economist for the APAC region for Indeed, this growth spurt could be directly contributed to a majority of sole traders who had resumed work post the lockdown, as well as many Australians taking to working freelance gigs, such as deliverers for Airtasker (which is one of the most booming freelance gig spaces) as well as Uber and Deliveroo.
While the delivery space itself has been a matter of public record over the years - for instance, even during the pre-pandemic growth spurt, freelance jobs drove growth in the private transport sector up by 39% overall - the pandemic allowed it to spread across a variety of industries. The most dominating trend was that business tasks which impacted the way a business functioned and required the contribution of at least two or more people - such as management, administrative - and other operational or structural tasks, saw the biggest growth in-office during this period. However, tasks which could be performed individually by one person, such as data analysis, social media management, or market research, were getting outsourced to those who could perform these tasks in a freelance capacity.
According to Pickering, however, there was nothing necessarily new about this particular trend - other than the industries in which it had set hold. Ever since the global financial crisis in 2008, there has been a rise in the number of part-time or gig workers, and the number is only likely to rise up considering the current conditions.
With all of these factors to be considered, what are some of the ways in which the gig economy is likely to shape up in the near future?
The future of the Gig Economy
A survey by McKinsey shows that online talent platforms play a huge role in helping gig workers showcase their specific skills and match them with opportunities in specific times and places. While they constitute a smaller part of the workforce, these online channels are opening up the space for them. As we have seen throughout 2020, the future is here and it is virtual.
Also some portion of gig workers are also from more vulnerable sections of the Australian workforce – including students as well as those who have lost their stable jobs. As they look to evaluate their educational choices over the years, small businesses are likely to make great progress owing to the flexibility it affords them to operate as companies, since they struggle with retaining people as full-time employees, often because they do not have the necessary resources. And because small businesses account for the largest proportion of employment in Australia, the picture is promising indeed for gigsters! While larger corporations can also benefit from freelance workers, they will have to tweak their existing structures in a way that allows them to include freelancing as a significant contributing element.
Overall, the gig economy is expected to address dysfunctions in labour markets, creating new opportunities for those looking to expand their skill sets or to make more money. It is likely that a lot of work will transform from full-time paid engagements to short-term immediate tasks over a longer period of time, and each company will want to reduce the risk they have when it comes to hiring the right person. In addition to this, small business growth is likely to result in economic boosts over time as well. On the back of shifting workforce and employer preferences and the budding opportunities across SMEs while larger corporations evolve mindset and processes, the gig economy is poised to grow in the years to come.