HR, Clutch Report

How the Gig Economy Affects the Workplace in 2018

July 17, 2018

by Michelle Delgado

Senior Writer & Marketer, Clutch

It’s becoming increasingly common for businesses to hire temporary workers for assistance on short-term projects – and for their employees to take on side jobs of their own. As the gig economy grows, businesses must consider its impact.

Through Airbnb, your spare bedroom can now become a mini hotel, and Uber and Lyft can transform your car into a temporary taxi. The gig economy refers to these types of side jobs, as well as the surge of short-term contracts and freelance jobs that have disrupted the expectation that most workers have full-time jobs.

As workers increasingly monetize their lives, business skills are also up for grabs. Websites like Upwork and Toptal convene temporary workers who are willing to put their skills on the market for short-term projects.

We surveyed 521 workers to learn how the gig economy impacts their lives, including whether their companies hire freelancers or temporary workers and whether they participate in the gig economy themselves.

You can use this article to better understand how the gig economy affects employees who may also have another full- or part-time job.

Our Findings

  • More than one-third of employees (36%) have at least one part-time gig.
  • Nearly 1 in 5 employees (17%) are currently seeking a side job.
  • Workers’ primary goal is to earn more money. More than two-thirds of workers (69%) identify increased income as the reason they hold a side job.
  • One-quarter of employees with a side job (25%) say their manager isn’t aware of their additional employment.
  • More than half of companies (57%) hire temporary workers.
  • Nearly one-third of companies (28%) hire temporary technical workers for development, analytics, or IT services.

1 in 3 Employees Currently Have a Part Time Gig; Nearly 1 in 5 Are Seeking One

As the gig economy grows, more workers are finding ways to participate. Common side jobs range from driving for Lyft or Uber to picking up freelance work that uses writing, technical, or design skills.

More than one-third of employees (36%) currently have one or more side jobs.

Additionally, nearly 1 in 5 employees (17%) are currently seeking a side job.

For some workers, participating in the gig economy can provide a safeguard against unemployment.

Tim Stobierski began looking for freelance work when the publishing company he worked for began to struggle financially. By the time Stobierski lost his job during a round of layoffs in 2016, he had already started using his freelance income to pay his student loans.

As Stobierski searched for a new job, he took on more freelance jobs to cover his basic living expenses. The additional income gives him more financial freedom, even after he landed a new full-time role.

“Though I now have a full-time job, I can't see myself ever giving up my side gig; it's given me the freedom to know that I can leave my job at any point,” said Stobierski, whose current side work includes writing for Student Debt Warriors, a website focused on helping college grads pay back their student loans. “It's also given me some real peace of mind in knowing that all of my income isn't tied to a single employer.”

"I can't see myself ever giving up my side gig; it's given me the freedom to know that I can leave my job at any point." – Tim Stobierski, Freelance Writer

Despite these benefits, Stobierski acknowledges that balancing multiple work commitments can take a toll.

“It can be incredibly stressful,” Stobierski said. “The work is not steady – some months I have nothing, and some months I am so busy that it hurts – which takes some real getting used to. But the rewards are, in my mind, enough to justify the stress.”

Gig economy workers must evaluate the pros and cons of taking on additional work.

Workers Use the Gig Economy to Supplement Income

For the majority of employees with side jobs, the opportunity to make more income is the biggest motivation.

More than two-thirds of employees with side jobs (69%) say their primary goal is to earn more money through the gig economy.

Employees primarily join the gig economy to earn supplemental income.

Other common motivations, such as developing new skills (9%) or pursuing a passion (8%), fall behind.

Gig economy income, however, can vary widely depending on the type of work.

In 2014, Uber estimated that drivers in New York City earned an average of $25 per hour, but other studies put the figure much lower at as little as $7 per hour. Researchers at MIT have concluded that most rideshare drivers earn less than minimum wage, with a median pretax profit of $3.37 per hour.

Freelancers who offer content marketing, writing, research, or technical skills may fare better, although rates still vary widely.

Gig economy workers can use online calculators to quickly calculate typical fees for projects, keeping in mind that freelance marketplaces such as Fiverr and Upwork typically collect a fee from any earnings.

The Editorial Freelancers Association recommends that freelance writers set rates between $30 and $60 per hour for most research and writing projects. Similarly, freelance graphic designers earn an average of $19 to $33 per hour, while freelance web developers earn between $22 and $40 per hour, according to estimates by ZipRecruiter.

Overall, it is possible to earn some or even significant income through the gig economy, but the financial benefit of side jobs can be difficult to predict.

One-Quarter of Employees Conceal Their Side Job

Not all employees feel comfortable disclosing their side job to their employer.

One-quarter of employees with side jobs (25%) say their employer doesn’t know that they participate in the gig economy. However, this includes 19% of employees with side jobs who don’t think their employer would mind.

75% of employers know about their employee's side gig.

Among workers whose employers are aware of their participation in the gig economy, some work in industries where side jobs are common (37%), while others’ employers don’t require details about outside work commitments (35%).

Alison Green is a management consultant and author of the popular Ask a Manager blog on work advice. She believes there are a few rare circumstances in which a manager should restrict an employee’s side job.

“There are really only two situations where a manager should interfere with an employee’s side job: if the work or the client poses a conflict of interest or if it’s interfering with the employee’s primary job,” Green said. “But if it’s not a conflict of interest and it’s not getting in the way of the person’s work, the manager should stay out of it.”

"If it’s not a conflict of interest and it’s not getting in the way of the person’s work, the manager should stay out of it." – Alison Green, Ask a Manager

Ethically, employees don’t always need to disclose side jobs to their employers. For employees in industries where side jobs are uncommon, Green recommends checking for written policies as well as possible conflicts of interest.

“[Companies] might require you to disclose side work so they can ensure there’s no conflict of interest,” Green said. “But if they don’t appear to have any policy on it, then use your own judgment. Is there potential for a conflict of interest or even the appearance of a conflict of interest? If so, you’d want to talk about that upfront.”

But, in industries where side jobs are common, disclosure might be unnecessary.

“[If] you don’t expect the work to affect your primary job in any way, it’s not unreasonable to simply proceed without disclosing it,” Green said. “You’re not obligated to disclose to your employer anything and everything you do in your time outside of work.”

As long as written policies don’t prohibit participation in the gig economy and a side job won’t undermine an employee’s performance, many employees are free to take on outside projects without disclosing them.

Companies May Benefit From the Skills Employees Develop Through Side Jobs

Companies might find that a liberal policy around side jobs can lead to an enhanced workforce.

Wayne Strickland is vice president of greetings global distribution strategy at Hallmark, where he has spent 25 years managing teams of 5,000 to 9,000 employees. In his experience, managers play a key role in blending temporary workers with full-time staff.

Strickland finds that side jobs rarely impact daily work.

“I don’t know that I ever have come across a time when somebody was working on their own personal craft that they didn’t do the work they needed to do at Hallmark,” Strickland said. “Good people want to work and do the right thing.”

Hallmark offers a “renewal period” to employees: a week of paid time off, on top of paid vacation and sick time.

“Most of the creative folks are creative in many areas,” Strickland said. “Hallmark gets a piece of that, but they don’t get all of it.”

Many employees use their renewal period to refine skills or pursue a craft that can in turn support better performance at their full-time jobs.

“If they’re a painter and they get to go paint some really cool things they wanted to work on, when they come back and apply that craft to greeting cards or gift wrap or sculpting for keepsake ornaments, they’re better,” Strickland said.

Strickland believes that encouraging employees to pursue creative work outside the office makes Hallmark stronger.

Employees who are permitted to pursue side jobs have additional opportunities to strengthen the skills they use at work.

Companies Hire Temporary Workers for Technical Gigs

Companies are most likely to hire contract or freelance workers for short-term projects that require technical or specialized knowledge.

Nearly one-third of companies (29%) hire temporary workers who offer technical skills, including experience with analytics, IT, and data science, as well as web, mobile, or software development.

Companies are most likely to hire technical workers.

Companies also hire temporary workers for marketing and creative projects (14%), administrative tasks (12%), customer service (10%), and accounting (10%).

Chris Hinds is chief operating officer of Road Warrior Creative, a boutique digital marketing agency that regularly hires gig economy workers.

“The gig economy was at the forefront of our own growth story,” Hinds said. “In fact, a lot of our full-time employees started out as part-timers and freelancers.”

As Road Warrior Creative grows, Hinds regularly hires freelancers to scale his business and benefit from specialized consultants while reducing overhead costs.

“We appreciate having the flexibility to rapidly ramp up capacity beyond what our core team of full-timers can handle,” Hinds said.

Companies like Road Warrior Creative can use the gig economy to scale up more quickly than only relying on a full-time team.

Hiring gig economy workers allows scaling companies to take on technical projects on a case-by-case basis.

Nearly 1 in 5 Companies Outsource Tasks to Remote Workers

Rather than hiring full-time employees, a growing number of companies rely on remote workers to complete specific business functions.

Nearly 1 in 5 companies (18%) outsourced some tasks to remote workers in the past year.

18% of companies outsource tasks to remote workers.

Outsourcing can take the form of hiring independent contractors or working with a business process outsourcing (BPO) company that provides third-party services such as HR, payroll, customer service, or other functions.

In addition to hiring gig economy workers, companies reduce operating costs by outsourcing tasks to remote workers.

Leaders Should Guide Collaboration Between Full-Time Staff and Gig Economy Workers

Working with temporary or outsourced workers presents new challenges for businesses, especially for tasks that require collaboration with full-time staff.

According to Strickland, the skills needed to manage temporary and full-time workers are communication and project management. Leaders should:

  • Share clear parameters around the assignment
  • Specify employees’ responsibilities
  • Set hard deadlines
  • Outline all deliverables

“A leader has really got to have the skills to get that group on the same page,” Strickland said. "A very skilled leader is really clear on the deliverables, the dates, the metrics that you’re going to use.”

Additionally, freelance or contract workers might have a variable, project-based schedule or even full-time jobs of their own. Internal leaders can ensure smooth collaboration by prioritizing flexibility and communication among both full-time and temporary workers.

When CEO and Hiring Manager Jesse Harrison hired a freelance IT specialist to update and maintain the servers for California Employee Rights Legal Group, successful collaboration depended on maintaining a flexible schedule.

“[Our freelancer] could not work on the server during normal work hours, so we elected to keep someone here for monitoring purposes so he could work after hours,” said Harrison, who has worked as a freelance legal consultant himself. “This allowed us to continue business as usual without a hitch, which was hugely beneficial for our firm and didn’t result in any loss of profits or wasted time.”

Businesses that hire gig economy workers must realize that they typically balance multiple work commitments.

Companies can benefit from temporary workers’ specialized skills, and leaders are essential in guiding successful collaboration.

The Gig Economy Is Transforming the Nature of Work

As the gig economy expands, most employees who participate in the gig economy are motivated by the desire to supplement their income. A significant number of employees already have side jobs, and even more are seeking one.

Although companies may lack clear policies guiding their own employees' participation in the gig economy, many benefit from hiring gig economy workers themselves. More companies are hiring temporary contractors or freelancers, especially for assistance with technical tasks that their full-time staff isn’t equipped to handle.

Finally, companies may find that allowing a liberal policy around side jobs can lead to a workforce with stronger skills.

About The Survey

Clutch surveyed 521 knowledge workers about their outlook on the future of jobs. Respondents work in traditional offices (75%), at home (19%), in a coworking space (12%), or at a public space such as a library (3%).

The majority of respondents are employed full-time (85%), with the remainder employed part-time (15%).

A range of industries were represented, including business/legal/financial services (19%), healthcare/life sciences (17%), education (16%), IT/telecommunications (12%), government (11%), retail/hospitality (8%), advertising/marketing (5%), and miscellaneous other (12%).

Respondents came from all regions of the United States: South (40%), Midwest (23%), Northeast (22%), and West (16%).

Women (70%) and men (30%) were included in the survey. Respondents ranged from millennials aged 18-34 (42%), Generation X aged 35-54 (44%), and baby boomers aged 55 and over (15%).

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