The Gig Economy
The gig economy is commonly defined as digital platforms that allow freelancers to connect with employers for short-term assignments or contracted work.1 The gig economy was in part a byproduct of the recession experienced in the United States in the late 2000s. Hiring freezes and stagnant wages left workers, primarily millennials, searching for ways to make ends meet.2
This led to the explosion of creative freelance work otherwise known as the new “gig economy”. Recent reports estimate that 16.5 million U.S. workers, or 34% of the total workforce, currently participate in the gig economy. The projected gross volume of the gig economy is expected to reach 455.2 billion U.S. dollars by 2023.1
What does the gig economy mean for the insurance industry?
A few of the most visible examples of the gig economy in action include the ridesharing services like Uber and Lyft and leasing apps like Airbnb and Turo. However, the gig economy is not limited to renting out your home or ridesharing. Need a flat screen mounted on your wall? Need some help moving that sectional couch? Task Rabbit is a marketplace that facilitates freelance labor with local service needs. As of late, COVID-19 has turned Instacart gig workers into essential workers, keeping grocery shoppers safe through a high touch grocery buying and delivery service.3
Amazon's Mechanical Turk (MTurk) is designed to crowdsource remote workers to perform discrete on-demand tasks that computers are unable to complete. The jobs are identified as Human Intelligence Tasks (HIT) and represents a single, virtual task submitted by a requester to be complete or resolved.
Common tasks they complete include Instagram marketing (i.e. tagging objects in pictures to improve search results), image selection (i.e. selecting the best picture from a series of images to showcase a product), survey completion to gain market insight, human-powered language translation services, and copywriting to name a few.
As the gig economy has evolved, so have the applications. Highly skilled gig economy workers can find work in blockchain architecture, robotics and ethical hacking.
Overall, the gig economy is a bit of a paradox. On one hand, workers can choose from opportunities that would not have otherwise been available. This type of freelance work can be an attractive option for employers looking for a more flexible, on-demand workforce to minimize the traditional costs associated with a dedicated staff.
Alternatively, while millennials have embraced the gig economy, perhaps out of necessity, research shows that they prefer a stable and traditional employment route — growing their careers within a company. According to a survey, 86% of millennials would remain at their employers if they were offered career training and development within the organization.3
Regardless, the gig economy is here to stay, as more digital platforms are developed and individual's interest in a flexible schedules and careers increase.
What does this mean for the insurance industry?
This presents an interesting opportunity for the insurance industry. Insurance professionals could consider leveraging a gig economy-type work flow, where projects are assigned to completed on a contractual basis. Businesses and individuals stand to benefit from the additional flexibility of gig work from both an economic and lifestyle perspective. However, the downside would be a potential loss or reduction of the traditional benefits that a corporate environment has to offer employees.
1"Gig economy projected gross volume 2018-2023" Statista, 05/28/2020, Erin Duffin, https://www.statista.com/statistics/1034564/gig-economy-projected-gross-volume/ 2“Half of millennials have a side job to make ends meet survey” New York Post, 11/24/2018, Gregory Bresiger https://nypost.com/2018/11/24/half-of-millennials-have-a-side-job-to-make-ends-meet-survey/ 3 “Survey: 86% of Millennials say they’d prefer to stay and grow within their company” The Ladders, 07/23/2018, Jane Burnett https://www.theladders.com/career-advice/survey-86-of-millennials-say-theyd-prefer-to-stay-and-grow-within-their-company