Is the Gig Economy Killing the 9-to-5 Job? No, But It's Giving It a Run for Its Money.
The gig economy has been on the rise for a number of years, and that fact can be attributed to a two overriding factors: millennials seeking more freedom and baby boomers looking to supplement their incomes.
The gig economy's success can also be traced to the effects of the 2007-2008 economic recession.
Those of us who are entrepreneurs, meanwhile, automatically join this economy the moment we leave corporate America. We give up a steady paycheck, job security and stability and corporate perks to launch our ventures, which almost always involve high risk.
And we’re not alone in that regard.
Who is represented in the "gig economy"?
According to a 2016 report from Upwork and the Freelancers Union, 55 million people (or 35 percent of the total U.S. workforce) are choosing freelance gigs. In 2017, there was a slight uptick in freelancing gigs, to 57.3 million (or 36 percent of the workforce).
In addition, more workers these days are receptive to exchanging security for freedom: Research by ManpowerGroup surveyed over 9,000 global workers, and 87 percent of those surveyed said they would be open to jumping into the gig economy for their next position. That's good for all of us, because the gig workforce is adding $715 billion annually to the economy through freelance work.
What does the "gig economy" constitute?
The gig economy is defined as an “environment in which temporary positions are common and organizations contract with independent workers for short-term engagements.” In the last two decades, there's been a steady increase in workers joining this segment, either by chance or choice. And though nearly ten years has elapsed since the recession, the gig economy shows no signs of slowing down.
In recent years, various population shifts have helped account for this: First, millennials have become the largest generation that’s fully employed, and more than a third of them are independent workers. And, baby boomers, meanwhile, are joining the gig economy's ranks in droves as a way to supplement their incomes -- and keep their retirement savings intact.
A study by Bankers Life Center for a Secure Retirement found that middle-income boomers who expect to eventually rely on Social Security for their primary source of retirement income rose from 30 percent in 2007 to 38 percent today.
Yet, those seniors would be wise to delay social security as long as they can -- because the more they delay, the more their benefits rise. And, in this regard, the gig economy is a big help (at least until age 70, when benefits stop rising).
Boomers are apparently aware of this fact, evidenced by recent data which shows that one-third of future retirees surveyed expected to have employment income, which would make up at least a quarter of their income. An interesting fact here is that the gig economy has actually encouraged older women (ages 51-70), who are often underrepresented in entrepreneurship, to stay active during retirement, according to Hyperwallet.
So, what industries are good for baby boomers and retirees to enter? Here are four that retirees seem to be flocking to.
Airbnb and Uber
The shared economy made a splash a few years back with the intent of turning people's underutilized resources like a spare bedroom or a car into a more profitable venue. While this entrepreneurial idea wasn't exactly surprising, the population segment most engaged here was -- and is: retirees taking advantage of these platforms to supplement their income.
In 2015, AARP partnered with Uber through its Life Reimagined program to create job opportunities for seniors as drivers. Uber had empty positions available, and boomers continued to retire -- a win-win for both sides. Today, many retirees drive between 20 and 30 hours a week and are considered ideal drivers because they usually own their own cars and have fewer crashes.
In the hospitality area, Airbnb has reported that women over 60 are its most successful hosts; and seniors (hosts 60 or older) are the fastest-growing community of providers. In fact, 64 percent of tAirbnb's senior hosts are women. The hospitality company identified this group, typically, as “empty nesters” earning an average of just under $6,000 a year.
It’s no secret that pets provide companionship and are beneficial in helping reduce stress, lower blood pressure and increase social interactions. Another means to that end is exercise; so, with the gig economy, the opportunity arose to combine the two.
As a result, companies like DogVacay, which match dog owners with dog walkers, arose; and most of those signing up to provide pet care were people over 50.
Dog-sitting was another need -- because people travel and don't want to consign their beloved animals to a kennel or a less-than-enthusiastic family member. That's how sites like Rover appeared, aiming to connect dog sitters, dog lovers and walkers all over the country -- and produce extra income for the contractors, often boomers, signing up.
We all know of someone in his or her 50s and 60s who has been laid off or forced into early retirement. What to do now? Use those industry-honed skills, of course. And often that means the "knowledge" part of the gig economy -- a marketplace where people sell their professional or creative skills.
Platforms like Fiverr match freelancers with businesses that have specific project needs in areas like graphic design, marketing, coding or translation services. A survey by Mavenlink of U.S. executive4s found that 47 percent of companies are looking to hire contractors to fill management or senior executive roles, including many in the C-suite. The survey also revealed that two of the most desired qualities in contractors were specialized degrees and decades of experience.
In recent years, the healthcare industry has jumped into the fray and begun hiring temp employees, or locum tenens, which has become a lucrative option for many. Hospitals and medical facilities face a shortage of professionals -- an estimated 900,000 unfilled positions -- and need to hire doctors, specialists and clinicians.
The medical professional demand is high due to an aging population, and the trend is not letting up. By 2050, the population over 65 is expected to hit 87.6 million.
One response is travel nursing services. With 50 percent of hospitals using these professionals, the demands for them is now at a 20-year high. Fifty percent of hospitals use this service to handle seasonal staffing shortages, with the average assignment lasting approximately 13 weeks.
Overall, the gig economy may not be killing the 9-to-5, but it’s certainly making it work hard for its money. The result may be that retirement is not as scary for as many people. Indeed, more seniors are taking the plunge into the gig economy, because being in control of your destiny is an attractive option once those steady paychecks come to an end.