The Gig Economy: Does It Benefit Your Business?

The Gig Economy: Does It Benefit Your Business?

This article was updated on Oct. 17, 2018.

You may have heard the term "gig economy" — an emerging group of workers who choose self-employment over traditional jobs. Also known as freelancers and consultants, these individuals tend to be industry experts who work with multiple clients and provide expertise on demand. While pay can be unpredictable for these types of employees, some gig workers earn salaries comparable to those of full-time jobs, according to Business Insider.

Wondering whether this trend will benefit your business? Here's what you need to know.

When to Hire

Hiring independent consultants and freelancers gives small businesses the flexibility to bring on talent for short-term projects that don't necessitate a full-time hire.

For instance, let's say you take on a small rebranding project and you need a copywriter for a few weeks. If you don't have anyone on staff who has this type of niche expertise, you could reach out to a short-term freelancer from the gig economy.

When It's Better to Hire In-House Staff

Sometimes, it makes more sense to bring new team members on a full-time basis. Usually, this situation is the case for business owners who have enough of a workload to give to a person with a particular expertise.

As an example, let's say you recently introduced a new blog and you're aiming to post 45 articles a month in addition to multiple case studies and several whitepapers. In this case, you'll likely want to hire an in-house writer, as this is enough work to necessitate a full-time employee.

Best of Both Worlds

If you have a mix of short-term assignments within a long-term project, you can hire freelancers to focus on the niche projects and full-time employees to oversee the implementation of the overall strategic efforts. An employee may be a generalist, while a freelancer is a specialist.

What to Keep in Mind

When hiring from the gig economy, start out by keeping projects small. If you're not sure how long a project will take, consider structuring your contracts on a project-based model or with a fixed set of terms.

To run your programs efficiently, ensure you're staffing to the right roles. For example, if you hire a copywriter at $200 an hour, make sure this person works on the most important marketing initiatives, such as your landing pages. On the other hand, if you hire someone at $30 an hour, he/she can work on less sophisticated projects, like data entry or scheduling. Do your background research by checking referrals. Make sure potential candidates have a proven track record of quality work.

According to Fast Company, 40 percent of the U.S. workforce will be freelance by 2020. Consider what types of projects you need to be completed to determine if hiring from the gig economy makes sense for your business.

Go deeper: 2020 Vision: A Forecast of Prevailing Trends and Predictions in the Gig Economy