The coronavirus pandemic has forced the global economy to its knees. Many companies are struggling to reinvent their business practices, with some already succumbing to closures. Covid-19 has certainly taken the world by storm and its sneeze can be heard reverberating across all industries, markets and livelihoods.
Along with health and safety concerns, there are also widespread fears of job losses. Employees who saw full-time jobs as secure with health, insurance and employment benefits are now vulnerable to pay cuts, furloughs, no-pay leave, or worse, retrenchments. While policy makers globally are dishing out aid in the form of handouts and relief packages to help employers retain current employees, the hard truth is that not all jobs can be saved. This harsh reality has shaken employees’ belief in the security of the job market, and they are now beginning to realise that the ‘safety net’ of being employed full-time, can actually be broken overnight.
Which brings us to the gig economy...
The gig economy can be segmented into two broad sectors: service-based and knowledge-based. Service-based providers consist of the likes of Uber and Grab drivers, Airbnb landlords, personal errand runners, online marketplace sellers etc. Knowledge-based solution providers comprise highly skilled management executives, consultants, tech experts, engineers, most of whom possess some form of digital expertise.
According to a Mastercard white paper, the gig economy has seen immense growth in the past two years, having generated US$204B in Gross Volume in 2018, with over 50% coming from transportation based services (such as ride hailing, food delivery, personal errand services). This was before the pandemic struck. Today, within the service-based sector, ride sharing is already bearing the brunt of the coronavirus effect while food delivery services (deemed as essential services during the pandemic) are seeing a continual uptick in demand. While it is evidently clear that some businesses in the gig economy are doing better than the others, there is more optimism for sustainable growth for knowledge workers in the gig market.
Why are knowledge-based gig workers rising to the occasion in this crisis?
The coronavirus outbreak has caught companies and industries off guard, and resulted in many displaced workers. Automation complicated things further. The emergence of COVID-19 in an age of artificial intelligence has accelerated the adoption of innovations such as robots, driverless cars and drones in replacing physical services such as cleaning, delivery and transportation.
Elsewhere, as reported in CNBC Make It, middle management positions are increasingly being eroded. Companies have had to let go of good, (and often) highly skilled talents with immense experience, as a consequence of drastic cost-cutting measures. A legion of these individuals are taking charge of their situations by entering the gig economy and using their industry competence and skill sets to forge a freelance career. This has led to an influx of high calibre talents with digital aptitude, expertise in diverse fields, and a higher propensity for remote working, all offering their prowess for temporary gigs that demand specific skills.
Compared to service-based gig workers, this genre of educated workers are better equipped to cope with unprecedented events such as an economic shock. They are highly adept at using technology to seek out job opportunities and thus put themselves out on the market faster. They have ditched the 9-5 workweek for the flexibility of remote working. They identify with immediate pain points of companies and are quick to rebrand themselves as ‘digital solution providers’ to cater to the evolving needs of an information age. After all, their years of experience have probably given them an advantage in the areas of critical thinking, leadership skills and emotional dexterity - qualities that technology cannot replace. More importantly, they understand that in order to stay employed, they must be open to new opportunities; or better yet, create elbow room for themselves.
In its magnitude of destruction, the pandemic has taught companies a quick lesson on speed. To survive, companies need to adapt fast, embrace new ways of working and take a long term approach to labour woes. Instead of sidelining external talents, now is the time to woo this rising breed of specialised workers who can take on crucial projects and keep businesses up to speed, sans upfront costs such as health, insurance and other employment benefits that come with full time employees.
No one can tell when this coronavirus will finish making its rounds. It might take months, years or it might be something that we all have to learn to live with. Few businesses dare to put an accurate bet on where the pandemic will lead us.
But one thing is certain. Rather than adopt a sit-and-wait approach, businesses are now understanding the urgency to plan for a recovery before the crunch hits hard. The pandemic is demonstrating that remote working may well be the future of work. Equipping current employees with digital skills becomes a pressing need. Companies that embrace technology, welcome distributed and remote working arrangements, and champion the use of outsourced talents may have a better chance of recuperating faster.
The good news is that the proliferation of online platforms has made it much easier for companies to connect with high calibre independent professionals, who may even be open to seeking work outside their local geography. These platforms are built to combat some of the uncertainties of COVID-19 by offering companies a global talent pool and quick hiring processes for a ‘plug and play’ solution. From the workers’ perspective, these online platforms present flexible hours, work life balance, remote working arrangements and a selection of project-based work of which they can work on from the safety of their homes.
The surge in supply and an increased demand for specific skills is presenting a dynamic gig economy for knowledge based workers. And hopefully, they emerge as a soothing balm to business recovery.
There’s a better way to grow. And it’s not the traditional way.
It’s about rethinking traditional employment archetypes. Can we progress from an economy built on full time employment habitually enslaved by unemployment fears, to one where individuals have greater autonomy and are self motivated to do work that inspires them? And as a result, benefit the economy as a whole?
You can’t own full time employees. But you can build a winning team with talent management companies. As businesses demand more, external talents are emerging as the sure forerunners of an agile workforce. At Chance Upon, we partner businesses to get a head start over competition by creating collaborative work between companies and the right talents.
Mastercard and Kaiser Associates, The Global Gig Economy: Capitalizing on a ~$500B Opportunity, Mastercard Gig Economy White Paper (May 2019)
Sameer Hasjia, V. “Paddy” Padmanabhan, Prashant Rampal, Will the Pandemic Push Knowledge Work into the Gig Economy?, Harvard Business Review (1 June 2020)
Tazeen Fasih, Harry A. Patrinos, M. Najeeb Shafiq, The impact of COVID-19 on labor market outcomes: Lessons from past economic crises, World Bank Blogs (20 May 2020)
Rachel Miller, Pandemic causes surge in freelancer numbers, Startup Donut (28 April 2020)
Courtney Connley, Abigail Hess, Jennifer Liu, 13 ways the coronavirus pandemic could forever change the way we work,” CNBC (29 April 2020)
“Labour in Singapore’s post-COVID-19 economy,” Academia, SG (2 June 2020)
“The future of the gig economy,” Roland Berger (8 April 2020)
Yuval Shalev, The pandemic’s impact on the gig economy, ERE (17 April 2020)