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What Is A Gig Economy & What Are Its Pros And Cons

| Published on April 6, 2020

According to Investopedia definition, a gig economy is a free market system in which temporary, flexible jobs are commonplace and companies tend toward hiring independent contractors and freelancers instead of full-time employees. It is based on flexible, temporary, or freelance jobs, often involving connecting with clients or customers through an online platform. A gig economy undermines the traditional economy of full-time workers who rarely change positions and instead focus on a lifetime career.

Well, this is one of the most sophisticated definitions you would come across. Now let’s understand in simple words what is the gig economy.

What Is A Gig Economy & What Are Its Pros And Cons

You all have read the pamphlets shouting ‘Ghar baithe paisa kamaye’ or you have heard of data entry jobs and freelance writing jobs. Well, it is all part of the gig economy. Even a part-time Uber or Ola driver is also part of the gig economy.

So basically every part-time, temporary and contract base work that is done for a short period to earn some extra income comes under the gig economy and the worker is called a gig worker.

Now let’s have a look at the pros and cons of the gig economy.

Pros of Gig Economy

What Is A Gig Economy & What Are Its Pros And Cons

Cost Saving

Economic reasons are the major reason for the development of the gig economy. Workers don’t have to come to the workplace. It saves huge infrastructure costs for the company. According to a recent report by ET, outside Mumbai’s central business districts, a barebones office space that can seat 500 people can cost Rs 10 crore in annual rent, which is Rs 2 lakh per employee. And when employees come to the office for work, the cost of staff transportation, air-conditioning and ventilation, furnishing and cafeteria also increases. Gig economy can get rid of all. Hence, you can understand why 55 million people in the U.S. are gig workers. Companies want to save money.

Cheap Human Resources

Well, if you have been freelancing, you must have gone through this. There is always someone who is ready to work cheaper. The gig economy opens the door of cheap human resources.

Cons of Gig Economy

What Is A Gig Economy & What Are Its Pros And Cons

Disruption of Work-life Balance

Well, most freelancers agree to this. Freelancing disrupts the work-life balance. You are your own boss. And when no one is watching you, complacency is obvious unless you are highly self-disciplined. Hence, the gig economy results in disrupted work-life balance, physical stress, emotional stress and lack of professional growth.

Unsteady Work Load

Some days you get so much work that you can’t even go out, some days there is nothing to do. It is also one of the major drawbacks of the gig economy. Most freelancers are not sure whether they will get the next assignment.

Continuously Seeking For Resources

For companies, the gig economy is a big headache. Because, the very definition of the gig economy is short term employment. Hence, the recruitment process is an everlasting love affair. Above all, it raises big concerns about employee retention. Hence, a long-lasting relationship cannot be formed between employer and employee which is not good for both.

So whether the gig economy is good or bad, the debate will go for long. And I think till last people will have divided opinions on the gig economy.

What do you think about the gig economy? Let us know in the comments section below.

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