As technology continues to redefine traditional work models, a new economic framework has emerged – it’s called the gig economy. This rapidly evolving landscape is reshaping employment norms and is particularly relevant for technology professionals. In this blog, we’ll explore the rise of the gig economy, its impact on tech professionals, and what the future may hold for tech employment.
Understanding the Gig Economy
Firstly, what exactly is the ‘gig economy’? Essentially, it encompasses a labour market characterised by short-term contracts or freelance work, as opposed to permanent jobs. It includes various forms of gig work such as part-time jobs, temporary work, freelancing, and independent contracting.
The term was first coined in 2009 during the financial crisis to describe workers with multiple jobs. Since then, the phrase has evolved and now refers to any professional who works independently (self-employed, LTD Co., etc.) for a short period of time.
Almost a quarter of a million (246,417) of the UK’s gig economy workers are desk-based, carrying out roles such as web development, marketing, legal or translation services. It’s a shift that’s been propelled by several factors, including the COVID-19 pandemic, but also advancements in tech and ever-changing worker preferences.
Elsewhere in Europe we’re also seeing influxes in self-employed workers, many of whom are freelancers specialising in contracting out their services. In Belgium, for example, there are now over a million self-employed workers (that’s 20% of the working population). In Luxembourg 10% of workers were classified as self-employed as of 2021. And in the Netherlands the rise of gig workers appears to have had a direct correlation with a drop in unemployment. Freelancers rose from 127,000 in Q3 of 2021 to 1.2 million in Q3 of 2022. By Q4 of 2022, the jobless rate had fallen to just 3.6%.
Find out more about freelancing in the Benelux here.
The role of technology professionals in the Gig Economy
Did you know there are now over 1.57billion freelancers in the world? And Google has more freelancers (54%) than permanent workers (46%)? (Oct 2023).
Countless tech professionals are now embracing the Gig Economy. Why? Well, it’s appealing for many reasons, including:
(1) Flexibility
Contract or freelance working offers flexibility. According to CIPD, “71% of workers view a flexible working pattern as important to them when considering a new role,” and “69% say the ability to work remotely is important.” Flexibility at work comes with numerous benefits for both employers and employees including savings on office space and utilities, better spread resources (i.e. for 24/7 customer care), increased productivity, and of course enhanced work-life balance which improves health, wellbeing and employee loyalty and satisfaction.
In 2023, around 4.42 million employees in the UK had contracts which allowed for flexible working hours. While in America employers are also recognising that flexibility is the new working norm. McKinsey’s American Opportunity Survey reports that 58% of workers are now able to work from home at least one day a week. 35% of respondents reported having the option to work from home five days a week. Interestingly, respondents work in all kinds of jobs, in every part of the country, sector of the economy, and in both blue-collar and white-collar roles.
(2) Diverse opportunities
The gig economy is a breeding ground for diverse working opportunities. It breaks the traditional mould of a 9-to-5 job, allowing professionals to work in a variety of roles across multiple industries and often with an entrepreneurial mindset.
As a gig economist, you’ll thrive on project-based assignments. Working on different projects, in a range of sectors, and for different clients will require a variety of skills and a unique approach for each. Tech means you’re no longer geographically restrained so you could be working for a client in the Netherlands one day, and a client in the USA the next – and based from anywhere in the world too.
And let’s not forget the fact that gig work allows professionals to explore different career paths. Without long-term commitment, you can try out new roles or industries, learn new skills, and discover where your true passions and talents lie.
But the gig economy doesn't just enable diversity of work, it also allows for a more inclusive work environment and as a result, a more diverse workforce. Thanks to freelancing and contracting, many areas of employment are now more accessible to certain underrepresented groups who need more flexibility or control over how they work. It also enables employers to engage with talent from a wider range of backgrounds and geographies.
(3) Higher earnings
Because the gig economy is based on a supply-demand model, professionals with highly sought-after tech skills can command higher rates. As a freelancer, you have flexibility to adjust your rates based on market demand without the need to wait for the annual or biannual increases offered by traditional employers.
But there’s also the possibility for multiple income streams too. If you’re working on several projects simultaneously or sequentially, you may be able to earn more than what a single role may provide. And the fact you could be working for clients globally means you may be able to access higher-paying markets.
And finally, gig work can often involve fewer overhead costs as there’s less call for commuting, work clothing, expensive lunches on the go, etc.
But the benefits also extend to employers who can enjoy access to specialist skillsets and cost-effective, flexible solutions for scaling as and when required. According to a survey, 75% of hiring managers now prefer to engage independent freelancers. Here’s just a few reasons why:
(1) Specialist skills
Freelancers and contractors often have years of experience under their belt before they’re able to make a success of ‘going it alone.’ That means by hiring someone on a freelance or contract basis, you’re likely tapping into a highly specialist skillset and the experience that comes from working across a range of businesses and even industries. They’ll often also bring with them a range of innovative ideas and an outside opinion that you may otherwise have been unable to access.
(2) Flexibility
Need a job doing at short notice, a niche skillset for a specific project or you can’t make a long-term (and potentially costly) commitment in a changing economic environment? Why not hire one or more freelancers or contractors? Not only do they bring a wealth of (specialist) experience, they’re ready to hit the ground running, and make an impact from day 1. You can often also tap into a wider talent pool of remote and/or off-shore talent.
(3) Cost and time savings
Small budget? Outsourcing to a freelancer or contractor can be a great solution. You’re only paying for someone to work the hours or project required. So, there’s no paying for a permanent employee who has a lull in activities. And importantly, you’re not having to complete the work yourself, allowing you to dedicate more time to your business and tasks that can’t be so easily outsourced.
The potential challenges
Despite its appeal, the gig economy also presents challenges. From job insecurity and inconsistent work to a lack of benefits typically associated with full-time employment and the ongoing need for self-promotion, tech professionals need to plan and be self-disciplined. Most of the risks can be mitigated by diversifying your income streams and investing in personal development.
Freelancers and contractors: the new norm in tech employment?
There’s no doubt we’re experiencing a shift towards freelancing and contracting in the tech industry. Many tech companies are increasingly hiring freelancers and contractors to reduce costs and increase operational flexibility, and this is having a profound impact on the tech industry, with professionals needing to adapt to new work structures and expectations.
To succeed in this new norm, tech contractors and freelancers need to hone their skills. Here are a few key strategies:
(1) Master your craft
As a tech professional, your skills are your product. Staying on top of the latest trends and technologies is crucial. Continuous learning and improvement can help you stay competitive and offer valuable services to your clients.
(2) Top-notch communication skills
As a freelancer or contractor, you'll likely work with diverse teams across different time zones. Clear and effective communication is essential to understand project requirements, share updates, and manage expectations.
(3) Take accountability and develop self-awareness
Clients value freelancers who take responsibility for their work and are aware of their strengths and weaknesses. Being accountable means delivering quality work on time, while self-awareness helps you identify areas for improvement.
(4) Practice strong business management
Freelancing is essentially running your own business. This includes marketing your services, managing finances, and handling administrative tasks. Tools and technology can simplify these processes, giving you more time to focus on your work.
(5) Network and build relationships
Building a strong professional network can lead to new opportunities. Join online communities, attend industry events, use social media and partner with specialist recruiters to connect with potential clients and other freelancers and secure new projects.
(6) Be flexible
One of the biggest advantages of freelancing is the ability to choose projects that interest you. This not only leads to better job satisfaction but also allows you to build a portfolio of projects and assignments that reflects your skills and interests.
(7) Demonstrate persistence
Success in freelancing doesn't come overnight. It requires persistence, resilience, and a willingness to adapt to changing circumstances.
The future of tech employment in the gig economy
So, what does the future hold for tech and the gig economy? Well, we predict that the gig economy’s only set to grow further, driven by technological advancements and evolving worker preferences. To succeed in a gig economy career, tech professionals need to stay adaptable, proactive and embrace upskilling, networking, and the latest industry trends.
As the gig economy reshapes the tech employment landscape, presenting both opportunities and challenges, Apollo Solutions is here to help. We’re helping tech professionals find their next opportunity or project – whether permanent, contract, or freelance – and businesses with their short and long-term needs.
Our inhouse Finance & Compliance team support over 200 contractors for businesses worldwide, and help both contractors and employers navigate the ins and outs of contracting. Get in touch with us today to talk about your hiring needs, check out our latest roles, or upload your CV.
