Gig Economy Revolutionizes Our View of Work

3 hari yang lalu The Jakarta Post mem-publish artikel opini saya yang membahas tentang Gig Economy dalam link ini. Perasaan saya senang bukan kepalang ketika mendapatkan berbagai feedback dari rekan-rekan akan hal tersebut. Akan tetapi, ada beberapa bagian yang dipotong dalam link tersebut dan itu (menurut saya) sedikit mengurangi pesan yang ingin saya sampaikan ke para pembaca sekalian. Saya pun memutuskan untuk mempublikasikan  draft lengkap dari email yang saya kirimkan ke The Jakarta Post untuk dibaca teman-teman sekalian. Mudah-mudahan artikel ini membawa manfaat bagi para pembaca dan mampu berkontribusi dalam persiapan pemuda-pemudi Indonesia menghadapi era digitalisasi.


The traditional method for hiring and establishing employer-employee relationship had been done in similar manner since the beginning of 19th century, but it has been a few years that the trend is rapidly transforming itself to seize the opportunity that digitization has delivered at everyone’s front door.

It is probably not the best indicator to guess where the wind of our economic foundation blows, but the recent business climate has convinced me that the case for devoting half of our lives to one company is vaporizing in unprecedented rate. An economic expert would call it ‘Gig Economy’ to describe a situation that occurs when temporary and flexible jobs are becoming very ubiquitous and employers prefer to hire independent contractor or freelancer instead of full-time employee. It doesn’t really matter who came up with the term first. What matters is how it has infiltrated our lives and altered it like no other trend that had came before.

Why the trend shifts?

Without us realizing it, gig economy can be seen as a side effect of enormous digitization wave across every industry. It is because technology, in its truest sense, is a great leverage tool that can enable workers to do their jobs from home or somewhere else.

It is not an opinion to say that having resources and maintain it as our own property is very costly. What makes hiring full-time employees costly is the fact that the company needs more budget to build a program and system that are specifically designed for long-term purpose. Full-time workers have minimum wage, paid sick day, pension funds, or even maximum working hours. Employees in temporary contract, however, are having none of these luxury and choose to settle for it. If profit is the language of business debacle, then ‘having employees on temporary contract’ are a native speaker.

The prime example for such business entities are Uber and Airbnb. Uber is the biggest taxi company on Hemisphere and it doesn’t even have vehicle as its asset. Airbnb revolutionize the way we book a room for stay-in and they do not own a single property. These 2 companies are the best example to explain how gig economy works to change the economic landscape into the way it is right now. The company works as an intermediary between resource and opportunity. Private individuals and freelancers across the world provide unlimited array of skills or services but more often than not, they are struggling to keep pace with the horsemen to find the right opportunity.

Uber, Go-Jek, and Grab survive against traditional taxi companies (and in fact, destroy them) because they don’t need to pay unnecessary expense and therefore can utilize it to hire more drivers. Having more drivers gives them an upper-hand against the incumbent because they are a lot more flexible to meet order with service during day-to-day operations and thus increasing customer experience and perception that can benefit the corporation in the long-term. What they are doing is not exactly earth-shattering, they just acknowledge how to utilize those idle resources earlier than anyone on the market and they did it in a fashion that can attract every stakeholder.

However, supply is only as useful as rock without demand and fortunately this is not the case for gig economy. According to the McKinsey Global Institute, independent workers make up 20-30% of the working age population (162 million people) and at least 70% of them do it because they actually prefer it. Only 30% become one out of necessity to make a living.

With such evidence are visibly shown everywhere, it is not a crime to conclude that current workforce possess an entirely different perspective on the generally accepted way to make a living, which is especially apparent among millennials. The reason more population choose to embrace this career is because it embodies a dream where having a good work-life balance is not only a mere pipe dream. Uber driver can wake up at 9, turn up to ‘work’ at 10, and spending time with family by the evening. Singaporean freelancer can do his project that he gets from a company in South Africa while sipping his morning coffee on a little café in Berlin. A single mom with 3 children can make 5 figures in USD each month and she barely breaks a sweat. You get the point.

Gig economy improves companies’ profitability and makes it possible for casual worker to have a good work-life balance. Therefore, there is almost absolutely zero reason to not embrace this trend and turn it into our advantage.

Almost.

What are the downside?

I have explained in the previous paragraphs how gig economy significantly helps business to improve profits and also workers to seize the job they have always wanted. But like my lecturer once said, there is always 2 sides to every coin. What may seems like a great and innovative discovery perhaps just have its weakness immensely overshadowed by its strength. To navigate against false positive, careful observation will always be needed to avoid unexpected pitfalls when capitalizing these opportunities.

Uber was banned from London, to which it appealed, because of the company’s failure to maintain their corporate responsibility. Several companies who adopted identical business model also received similar backlash from the public because, at several cases, they ran their employees to the ground. The lack of details established in the contract and the vagueness of boundary on how much the responsibilities and rewards for workers and the company have the tendency to cause more damage to one of them, albeit the former is more prone to the risk.

When putting everything into account, gig economy become more vulnerable than how it was perceived at first. Maybe it’s time that we actually pause for a bit and then hop off the bandwagon to see things clearly.

Another major problem is that the true nature of gig economy means that social interaction will be an exclusive item to have. For example, being a part-time employee means that it is harder for an employee to inherit company’s vision and cultural values and it can dilutes a company characteristic in customer’s perspective. It also goes without saying that working separately in fast rhythm means that building team chemistry is an inevitable struggle.

Therefore, it should come with no surprise that it also affects full-time employees too. Workers with temporary contract are always the more attractive choice cost-wise and it makes it harder for full-time employees to get promotion or a raise. When an employee finds it harder to develop their career and have their needs satisfied, the room for ‘loyalty’ when deciding one’s future becomes very scarce. If not managed carefully, gig economy could prove to be costly for business.

Major savings in cost for companies also mean that workers who join the wave may not get paid well and deservingly. Besides having more flexibility than their counterparts, their rewards are inconsistent and will be affected greatly by what kind of work they do, what are the risk, and how the result turns out. Having no protection towards outside threat and no secured benefits also need to be taken into the equation when we are measuring if the decision to jump into the bandwagon really worth the risk.

I don’t want to go into details here, but it is obvious that additional plan is required to dodge this longstanding fear of being unemployed. For example, it is not rare to find a case where such worker live their dream from choosing this path of career, but it always comes back to the basic economic principle. Like how the old saying goes, high benefit always requires high risk. Behind every 100 success stories, there are 1 million others who only find nothing but misfortunes.

As for millennial and fresh graduates, I believe that the best attempt that can be made to control the wave is to stand out and try to add as much value as possible to the marketplace. Settling for mediocrity means that we already lose the war before it even starts at all. We can’t afford to walk into the jungle without acknowledging what we are good at and what we are bad at. What we should be doing is set the tone to our amusement and find the frequency that fits our skill set because dancing to the drumbeat of the industry could only mean one thing: losing.

Published by

evanfabio

An occasional blogger. Student at Industrial Engineering Universitas Gadjah Mada.

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