No, The ‘Gig Economy’ Isn’t The ‘Future of Work’

Stop me if you’ve heard this before: the gig economy is the future of work.

That’s the line of the day more often than not. In the past two months alone, I’ve attended three conferences loosely themed around “the future of work,” and time and time again the prevailing conclusion is that the type of labor we see from platforms like Uber, TaskRabbit and others — platforms in which users perform gig work on an on-demand basis — is the future of work as we know it.

Indeed, if we go by conventional wisdom, the era of the social contract between employers and full-time employees is facing its inevitable conclusion in the coming decades.

RELATED: Talent10x podcast: Author Jeanne Meister on the future of the gig economy and what it means for executives.

Well, I’m not buying it. Here’s why.

1. Current gig economy participation is still an extremely small fraction of the U.S. labor force. As of June 2016, 0.9 percent of adults actively earned income from working on online platforms, according to a new report this week from J.P. Morgan Chase & Co. That includes 0.5 percent from labor platforms, like Uber and TaskRabbit, among others, and 0.4 percent from what the bank refers to as capital platforms, or places like eBay, Etsy or Airbnb, in which people sell goods or share capital, not labor. While that number isn’t entirely unremarkable compared to where the gig economy was a few short years ago, it’s not exactly large enough to portend a major disruption in the overall labor market.
2. Growth in gig economy participation peaked in 2014 and has slowed since then, according to the same J.P. Morgan report. Not only is the current gig economy still a tiny fraction of the overall labor market, but its growth is slowing. To me, that doesn’t necessarily spark the idea that gig work is the future.
3. Assuming the gig economy is the future of work based on proliferation of a few platforms runs almost entirely counter to the kinds of workplace cultures that leaders are working so hard to cultivate. Take a look at how corporate culture has evolved; the themes don’t align with the idea that untethered gig work is the future. Sure, freelancing and contract work continues to have its advantages for many businesses and workers, and freelancing is a growing percentage of the labor force. But the general notion emerging around what constitutes a strong workforce is a united culture of full-time employees with real skin in the game coming together to produce a product or a service that is bigger than themselves or their company. Unity, teamwork and the general feeling workers get when they are part of a group is something that might not sustain if every worker is conducting parts of a project on a gig basis. Imagine the lack of unified motivation a company’s workforce might have if most of its employees weren’t tied to the success of the company, or if much of their time was spent considering gig work they have to do later for other companies, maybe even competitors.
4. Companies like the idea of employing a concrete, employer-dependent workforce. Let’s face it: companies gain a lot when workers depend on them for their financial well-being. Because of this, they’re able to retain workers and control their performance and productivity in ways they wouldn’t be able to if every contributor was a gig economy contractor. Plus, the idea that companies would always have to be working to source and recruit their next batch of workers to complete parts of projects or initiatives seems cumbersome. The gains companies may receive by employing more gig workers could be counterbalanced by the fact that they’re forced to spend more money and labor sourcing and finding a reoccurring pipeline of workers. Yes, advancements in technology might help, but will it be enough?

These reasons alone suggest gig work is likely to remain a small part of the overall labor force, both from an economic perspective and a cultural, performance and management perspective. Does this mean I’m absolutely right? No. I could be very much wrong. The point is, at this point in the gig economy’s progress, it’s too early to proclaim it as the future of work. Until something changes, and it very well might, executives should move cautiously.

Frank Kalman is Talent Economy’s Managing Editor.

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