Are you a freelancer relying on gig work for your primary or additional source of income?

The number of freelancers has risen steadily in recent years, and many are asking if the gig economy is the future of work and whether it’s sustainable.

So, what does the future of the gig economy look like?

In this article, we’ll discuss the gig economy and its downsides. Additionally, we’ll look at what to expect in 2024 and beyond and how to prepare for your financial future.

What is the gig economy?

What Is The Gig Economy?

The gig economy is a modern twist on the age-old practice of hiring laborers and artisans for short-term work. Its roots date back centuries, but the term is pretty recent.

“Gig economy” refers to a job market in which task-based workers use digital platforms to find temporary or part-time gigs.

Employers hire gig economy workers on an as-needed basis. As independent contractors, these workers don’t receive the same benefits as traditional employees. Gigs or tasks they can perform run the gamut. Examples are driving for Uber or Lyft, providing short-term home rentals through Airbnb, or completing freelance projects such as writing or graphic design.

Many workers are turning to the gig economy primarily because of flexibility. They can choose their work hours, the types of work to perform, and even the clients to work with. Employers, on the other hand, can tap a large network of talent and service providers without having to employ them full-time.

downsides of the gig economy

What Are The Downsides of The Gig Economy?

According to a recent survey, gig workers are happier with their jobs overall compared to non-freelancers (77 percent vs. 70 percent), freer to do the freelance work they like (75 percent vs. 61 percent), and report better work-life balance (74 percent vs. 67 percent). Stat: gig workers are happier with their jobs overall compared to non-freelancers

Image source: A.Team

That said, the gig economy has some notable drawbacks:

  • Limited job security: Because gig workers are hired on an as-needed basis, they can be let go at any time.
  • Non-guaranteed pay: Income isn’t guaranteed, which can lead to workers accepting low-paying jobs or those that aren’t a good fit. In some very unfortunate cases, they get cheated out of their earnings.
  • Limited benefits: Gig workers are independent contractors. Therefore, they are not entitled to traditional employee benefits such as health plans, retirement packages, and paid time off.
  • Lack of legal protections: Gig workers are often not subject to wage minimums and overtime pay or protected against harassment and discrimination.
  • Dependence on ratings and reviews: Platform ratings and reviews can impact the amount of work gig workers get.
  • Little to no collective bargaining power: Often, gig workers and freelancers are lone wolves working by themselves. They don’t have the backing and bargaining power of a workers’ union or other related organization.
  • Uncertainty: Because long-term, high-paying work isn’t guaranteed, planning for the future can be challenging.

gig economy and the future of work

The Gig Economy and The Future of Work

In 2022, McKinsey’s American Opportunity Survey (AOS) found that 36 percent of employed Americans were independent workers. In 2016, that figure was 27 percent. By 2025, Global Workplace Analytics predicts that approximately 70 percent of the workforce will work remotely at least five days a week. Meanwhile, Tata Consultancy estimates that by the same year, some 40 percent of the global workforce will work from home.

These figures only reinforce the fact that the freelance economy is here to stay.

What lies ahead for freelancers

2024 holds several noteworthy changes and trends for freelancers. These include:

AI support for increased efficiency

Artificial intelligence (AI) advances fast. This means freelancers can anticipate more support with workload management and routine task automation.

AI tools can assist with tasks such as:

  • Data entry
  • Social media management
  • Basic administrative tasks
  • Project management
  • Content creation

Freelancers can then focus on complex tasks that demand human experience and expertise. These can include client interactions, strategic planning, and creative work.

The growing ubiquity of blended teams

With blended teams becoming more commonplace in the workplace, freelancers may find themselves working alongside full-time employees more often.

Organizations are increasingly recognizing the value that on-demand talents bring to the table — specifically, specialized skills and flexibility in an uncertain economy. As such, they are more likely to integrate freelancers into their workforce as needed. This can create more diverse, collaborative work environments.

Products specifically tailored to freelancers

The freelance ecosystem is evolving. With this transformation comes the proliferation of products and services tailored specifically to the unique needs of freelancers. These can include specialized financial tools, project management platforms, insurance options, and various other resources.

Examples are:

More regulations protecting freelancers

With more and more independent workers joining the gig economy, governments and regulatory bodies increasingly recognize the need to protect freelancer interests. Expect to see more regulations to ensure fair payment, benefits, and labor rights for freelancers. These can provide freelancers with greater stability and work security.

freelancers prepare for the future

How Can Freelancers Prepare for The Future?

The gig economy and the future of work certainly look promising. However, the drawbacks inherent to both gig and freelance work will remain. Freelancers should put measures in place to cushion themselves from these lingering challenges.

  • Develop in-demand skills: Build skills in response to organizations’ growing technology adoption. According to the World Economic Forum, between 2023 and 2027, over 75 percent of organizations will adopt technologies such as big data, cloud computing, AI, digital platforms and apps, e-commerce and digital trade, and education and workforce technologies. Acquire knowledge in rapidly growing areas such as healthcare, data science, statistics, information security, and software development.
  • Stay on top of industry trends: The world of work constantly evolves. Keep your finger on the pulse by closely following industry blogs and news outlets, attending conferences, and expanding your professional network. Stay current on the latest tools and technologies in your field.
  • Strengthen your brand: Create a strong brand that highlights your experience, skills, and what makes you different. This can mean building a solid presence on social media or launching a regularly updated website.
  • Continuously learn: Keep your skills sharp by investing in ongoing training and education. Take courses, attend workshops or conferences, and find a coach or mentor.
  • Plan for your long-term financial future: $455 billion — that’s the amount the gig or flexible economy will represent in global activity by the end of 2023. But freelancers and gig workers can struggle financially without the safety nets that come with traditional, full-time work. So, take steps to plan for retirement and other financial goals. Work with a financial planner to build an emergency fund and set up a retirement savings account. Also, consider getting health and other insurance.
  • Diversify your income stream: Don’t put all your eggs in one basket. Reduce your financial risk by working with clients in different niches, industries, or geographies. This can insulate you from fluctuations in demand for specific skills.

Forging Ahead Into the Future of Work

Just like in the years gone by, the gig economy will be exciting but chaotic in 2024.

To keep up, it’s vital that freelancers continuously hone their skills, adapt to new trends and technologies, develop strong relationships with clients and peers, and plan for their financial future.

Ready to step into what lies ahead for the gig economy? Spruce up your ClearVoice CV today!