The “Gig Economy” describes the growing interest in independent or freelance work as an alternative to full-time employment. The IT industry is seeing a boom in the number of individuals opting for self-employment over conventional full-time positions.
Contracted IT services were often reserved for professionals with established careers that were able to shun their commutes and cubicles in favor of more comfortable (and often remote-based) consulting gigs. And, as IT has always been about being “cutting edge,” it’s no surprise this industry was one of the first to accept flex-hours and remote work. Now, with Millennials taking over the workforce in droves, the landscape of self-employment has changed. It’s not only a more viable working life than previously possible due to advances in technology, but the preferred option in the face of new challenges bearing down on traditional full-time positions. In 2014, 34 percent of the workforce was involved in freelancing work to some degree, and the trend is growing.
Today, while other industries are catching up to and embracing the gig economy, IT continues to be at the front to the line, and more IT professionals are opting for the flexibility of contract work. These changes are not without their concerns, however. Self-employment offers freedom in place of job security, and IT companies have new issues that accompany hiring freelancers in the gig economy.
Younger Workers Equals New Work Habits
Workers under the age of 35 have learned flexible work schedules and Bring Your Own Device (BYOD) concepts can afford them the ability to make a living from wherever they want, whenever they want. Long-term loyalty to a full-time employer doesn’t hold the same sway in terms of security for Millennials as it did for previous generations.
The Great Recession of 2008-09 left many graduates with a pile of student debt and few job prospects. Some gravitated toward the corporate world, but many remained independent out of necessity. Now, that independence has become one of the most attractive qualities of freelancing and self-employment.
The Benefits and Risks of the “Ghost Company”
As employee habits changed, so have the issues facing the companies that hire them. Tech firms can now maintain high productivity with low numbers of employees, thanks to the rise in popularity of contract work. Companies operating with these structures are often called “ghost companies,” and the tech industry is at the forefront of this shift in employment dynamics.
As payroll numbers dwindle, the job market tightens. Certain tech companies are going to have busy seasons and may not require large scale full-time staffing. Self-employment becomes even more attractive in the face of fewer job openings. Yet freelancing in the gig economy can be a double-edged sword for both employer and employee alike: It offers the flexibility of contract work to anyone, and companies are free to hire on an as-needed basis. But, it presents new challenges to the IT industry in terms of talent retention.
More companies are focusing on retaining their veteran full-time employees and regular contractors due to the massive 25 percent turnover rate in the IT field. Talent poaching and the allure of the gig economy for tech professionals has contributed to this rate, and many IT companies have established new methods of compensating for the negative impacts of these trends:
- Compensation and benefits packages have grown and become tailored to retaining top talent.
- Allowing more flexibility in terms of working hours and work-from-home opportunities.
- Offering more chances for employees to engage, allowing management to demonstrate they consider the employee to be a valued and respected investment rather than a replaceable commodity.
With contract work continuing to be a popular choice in the tech workforce, IT firms are going to need to develop strategies to adapt to these shifting trends, if they haven’t already. Independent work offers fast-paced, flexible, and specialized working situations that have only become more easily accommodated by the explosive growth of mobility in the workplace.
The many perks of self-employment and freelancing, and the freedom mobility brings to a job means more to today’s modern workforce than the traditionally accepted security afforded by full-time positions. And tech industry leaders can benefit by being able to access the best talent the world has to offer—literally. The opportunities are not without risk, however, and the industry is shifting to meet the demands of a fast-paced, highly-specialized, and independent workforce.