The Gig Model: All You Should Know about the Essence of the Gig Economy

The job market has changed a lot in recent years. One of the most significant developments is the rise of the gig model.

The gig model is a new business model that relies on the gig economy. It works on business transactions between gig workers and employers.

It’s crucial to understand this flexible business scheme to be a part of it. This article answers essential questions about the gig model and the gig economy.

What Is a Gig-Type Job?

A gig-type job is a short-term contract-based business transaction. It entails hiring a freelancer, consultant, or independent contractor for a temporary job.

The gig definition entails any temporary job that doesn’t require long-term commitment on the part of the employer or the employee.

The word gig initially referred to live performances for musicians. Now, it has evolved to involve all fields from manual labor to IT and social media jobs.

What Is the Gig Model?

To fully understand the gig model, you need to get an overview of the gig economy. It’s an entire job market based on short-term contract business.

The gig model depends on outsourcing gig work to freelancers and independent contractors. It helps companies reduce costs.

It allows gig companies to hire independent workers only for a set duration. That way, these workers don’t belong to the company’s workforce.

What Is the Difference Between a Gig Worker and an Employee?

There are some differences between gig economy workers and full-time employees.

Let’s start by exploring what a gig worker is:

Of course, both ideas revolve around work. Yet, full-time employees and gig economy workers are two distinct concepts.

A gig worker is a freelancer or independent contractor who knows how to browse and find gigs on digital platforms depending on their skill sets. A traditional employee has a fixed job with a certain company.

That means that the employee will be on the company’s payroll regardless of the workload. As for gig workers, they get paid on a project basis, and the higher the workload is, the higher the pay gets.

Most gig types allow you to work on several gigs with various clients simultaneously. Unlike traditional employees, they don’t have any long-term commitments with their clients.

An employment contract entails health care, annual leaves, and a minimum wage. That’s not in the package for gig workers.

Who Does the Gig Model Benefit Most?

The gig economy was initially meant to create a win-win situation. The plan was to enable independent workers to make extra cash and companies to save money.

This has proven unrealistic in the long run. Apparently, major gig companies benefit the most from this scheme. These companies include Uber, Walmart, and Lyft.

Instead of abiding by state labor laws, these companies save money by not paying minimum wages, health care benefits, or insurance. That way, the model offers them more advantages than the workers themselves.

That doesn’t mean that there’s nothing in it for the independent workers. The gig model also benefits gig workers across fields. They prefer the flexibility and relaxed schedule that gives them more time to enjoy life.

Some gig workers work for different clients at the same time, which allows them to make some extra money. Yes, they don’t get employment benefits but they get well paid.

Who Is Negatively Impacted by the Gig Model?

The typical parties in any gig transaction are the gig workers and gig companies. They both benefit from the model.

The question is whether any party is negatively impacted.

Reports have shown that despite the obvious benefits, the gig model can negatively impact some gig workers.

Gig work started as a side hustle and became a full-time job with super flexible hours. The problem is that this flexibility comes at a cost.

Gig workers get paid lower than minimum wages and enjoy no benefits. If you’re sick for a week, you’ll make no money, unlike full-time employees who get sick leave.

To solve this problem, the United States government issued Prop 22 legislation to help gig workers get their benefits.

Why Is Gig Work a Good Fit For Business & Society as a Whole?

Gig work is a good fit for society as it makes work more accessible to individuals looking for side gigs or flexible lifestyles.

People nowadays strive for a flexible business model. They’re willing to forsake their job benefits to take matters into their own hands.

Only a quick look into different examples of the gig economy is enough to see that there’s work for everyone regardless of their skill sets.

The gig model also helps businesses. It allows companies to distribute their workload among gig workers for a one-time paycheck. Companies don’t have to include gig workers in the payroll or give them typical labor benefits.

That way, the gig economy benefits society by catering to the workers’ increasing need for flexibility.

The gig model also has a great advantage for businesses. It saves them money and allows them to hire skilled workers they can’t afford on a full-time basis.

If you’re looking for a side hustle or a flexible work opportunity, the gig economy has done you a huge favor. Otherwise, it mostly benefits gig companies.

Wrapping Up

The gig model is a business scheme that relies on short-term projects. It’s where businesses list temporary jobs for freelancers or independent contractors.

It offers the flexibility sought after in today’s lifestyle. This model also allows companies to save money and use the expertise of skilled workers who aren’t on their payroll.

The gig model has more benefits for businesses – but it doesn’t mean that you too can’t benefit greatly from the scheme with some planning.

If you have any questions, don’t hesitate to put them in the comment section. We’re here to answer your queries!