The Gig Economy No Jobs, Just Work

There has been a lot written lately of the Gig Economy the notion that, in the future of
earning a living, there will no longer be jobs, just work. Its an earnings environment where
the supply and demand for skillsets are contracted between those that have a need and
those who can fulfill that need.

This is not to be confused with contractors or consultants who have traditional firms with all
the trappings of being a formal business. Certainly, it can be argued that such firms survive
by winning one engagement after another but they also have the overhead that makes
them formal business as we recognize them such as; an office, employees, insurances, and
other obligations that distract from their monetizing as much of their efforts as possible
while keeping overhead at a minimum.

Traditional firms also have something that is largely absent from those working in the gig
economy a fixed work schedule. Sure, when they land a gig, they have to meet
deliverables and deadline requirements. But in the gig-economy, the when, how even
where can be largely discretionary.

The gig economy has been around for some time but was largely the domain of those with
talents in the arts; musicians, artists, writers, photographers, and such. These people were
creative when they felt creative (its darn near impossible to force creativity) and were
hired by those who wanted the use of their talent or wanted to purchase what they had
created.

Such engagements might be short-term with the reward not being guaranteed, such as a
street musician playing in a market square for the casual offerings of the passers-by. Or
they might be long-term, such as the ceiling of the Sistine Chapel which
took Michelangelo four years to complete. Or a near infinite number of points in between.

But, the introduction of technology (the internet, in specific) and the maturity of social
platforms for building awareness and facilitating conversations, has resulted in the
exponential growth of transactions (in value and quantity) across a spectrum of economic
activity now including the work of programmers, help-desks and customer service, career
advisors, consulting services, and providers of office and home services such that gigs
can be recognized as an economy in its own right.

According to an article by McKinsey, 30% of the participants in the gig-economy do so as

their preferred choice of earning their primary income, another 40% do so as their preferred
choice for supplemental income, and 30% do so reluctantly out of necessity (either as their
primary source of income or for supplemental income). And a report by CNBC states that
growth in the gig-economy has outpaced growth in payrolls by 27% over the last 20 years
and that 81% of the growth in the gig-economy has occurred in the nations 25 largest
metro areas.

An article in the Harvard Business Review by Diane Mulcahy, an adjunct lecturer at Babson
College a college with a reputation of being strong in entrepreneurship goes a step
further and encourages the MBA students in her class to stop looking for a job and to join
the gig-economy, citing the importance of students to cultivate the mindset, skills, and
toolkit to succeed in this new world of independent work.

Her three primary reasons are; 1) full-time jobs are disappearing and gig-economy jobs are
growing, 2) full-time workers are becoming the worker of last resort, with many firms
actively avoiding the hiring of full-time employees and, instead, run their firms with as few
full-time employees as possible, and 3) she speculates that, with the loss of job security,
good wages, and benefits (including retirement and healthcare), traditional jobs are not
working for most Americans.

Perhaps, one of the most attractive aspects of a firm hiring someone in the gig-economy is
the innovation and entrepreneurship someone in the gig-economy must bring to the firm to
be successful. After all, if the gig-freelancer does not drive value each and every day, they
can be easily released and replaced.

Necessity is the mother of invention. Plato

 We certainly cant address the topic of the gig economy without
including Uber, arguably one of its catalysts and one of the largest gig-
economy platforms in existence today.

My first introduction to Uber was in Monterrey, Mexico whilst on an assignment. The

vehicles were in better shape than the normal (green) taxis and the drivers whisked you
about very quickly and very efficiently almost always at a price lower than using the
traditional taxis. There was never any instance of taking the long-way to rack-up the fair
because you were given an estimate of your fare before you got in the taxi and once inside
your ride, you could monitor the progress of your trip (and any deviation) as it was mapped
on Google. It was so easy, and so affordable, that I immediately became a subscriber.

However, I would never call Uber a ride-sharing service. There is not any sharing of a
ride by the normal definition. For instance, the driver would not be coming from your
location and going to your destination without your being in the vehicle. Lets quit the
charade and face it, Uber is a taxi service that uses a pretty good app to put those in need
of a ride with those willing to provide a ride so what.

I took one ride from Disneyland in Anaheim California to LAX. The driver picked me up in a
very clean and well-maintained Cooper Mini. He even had a couple of bottles of water in
the back in case I was thirsty (on the house). We got to talking about his working for Uber;
how long he was working for the company, how he liked it, even how much he made
annually.

He was very enthusiastic about working for the company. He enjoyed that he could work
his own hours spending weekends (or whenever) with the family. He was always working
during big events where he could earn a premium. He only had a couple of poor
experiences with customers (usually the young and the drunk). And he cleared $50,000 per
year as income.

I also had an opportunity to compare rides. I flew into Chicago, landing at OHare, and took
a taxi from the airport to my hotel in nearby Schaumburg. The vehicle was a piece of
crap. It looked like it had just returned from a gun-run in Aleppo maybe had a close call
with a barrel-bomb. It might have even been the same driver. The 20min ride cost $65.

I took Uber on the return trip. A nice and well maintained Nissan Pathfinder with a
professional and friendly female driver took me to the airport for $25. Note to self; never
take a taxi if you can help it.

As a business owner, or as anyone who has ever had to hire

someone, the process of seeking, finding, vetting, hiring, on-
boarding, and making the new hire a productive member of
your workforce can be a daunting and even irritating
task. And I am positive that those who have sought a job and
endured the interview process also had to endure trying to impress those who were
unimpressible. Certainly and regardless of what side of the desk you are actually sitting, I
have never heard of anyone actually enjoying the interview experience like having to kiss
so many frogs before finding the prince (or princess).

Then there is the paperwork and overhead. Just to hire someone on temporary assignment
is a hassle especially for firms that are not large enough to justify having a Human
Resources Department devoted to such activities. There is also the efforts involved in
getting someone on the payroll, not to mention all the taxes and insurances you have to
pay. And if you hire a freelancer, you might still be on the hook if the IRS or Workers
Compensation Insurance Board determines they are not freelancers, but employees. Just
understanding what the IRS considers a contractor or employee on their own website leaves
too much to the imagination to be considered definite (although, their having a company
entity helps but just a little).

What if you could post a description of the tasks to be completed with details of the
talents and skills required and anyone from around the world could make an offer? Enter
UpWork.

I actually heard about UpWork from a friend in South Africa. He is a gig-freelancer and had
used it himself to find engagements as a copywriter and thought it might help me with my
needs in finding a copywriter and editor, a webpage and graphic designer, and a website
search-engine-optimization (SEO) specialist.

So, I decided to give them a try and I was pleasantly surprised.

I created advertisements for the projects, giving a reasonable amount of detail as to the
expectations and requirements (including fluent in the English language). Once posted,
people could see the position and make offers. I could also search profiles of people
meeting these requirements and ask them to make an offer. Within a few days, my box was
filled with many eager candidates.

It was obvious that many would not make the cut the language skills demonstrated in
their offer eliminated them. A second round easily identified those who were seeking the
work on the behalf of others who were eliminated because I wanted to establish a dialog
and engage the person who was actually going to do the work. Then those who didnt
respond in a timely manner were eliminated (if they are slow to win the work supposedly
the time when they are putting their best foot forward how will they be doing the
work?). This left me with a couple of dozen or so who were likely candidates.

Now for the difficult decision: With so many candidates, I decided to not hire those from
the States for all the tax, overhead, and compliance headaches I listed above and the real
legal and financial peril that accompanied being non-compliant.
I ended-up hiring two copywriters/editors and a web/graphic designer from South Africa
and an SEO specialist from India.

Bringing them on-board was pretty simple. They already had the skills and the tools and
equipment necessary to do the work. All they needed was direction from me and other
staffers including the specifics of the tasks at hand. They asked questions as necessary. We
refined our guidance. Collaborated on design and development. And so on.

But it begs the questions; How do you monitor their work? Are they working on what is
important? Are they actually working the hours they are reporting? How will they be paid?

Fortunately, UpWork is not just a match-maker, but a gig-freelancer time and billing
management system with built-in auditing for accountability.

Depending on the nature of the work to be done especially if the work is being done on
computer the gig-freelancer will actually be logged into UpWork when they are working.

Then UpWork will monitor their activity, by the minute. The system will show when they
were logged-on to UpWork and allocating time against their project for you. The system will
take random screen shots showing what the gig-freelancer was actually doing. It will even
count the number of keystrokes and mouse movements. See the following images (name
changed to protect the actual gig-freelancer).
Figure-1: Work Diary showing gig-freelancer and an overview of what they are working on
per hour (showing date and time zone). Note that all time is auto-tracked and there is no
manual time.
Figure-2: Different view of the Work Diary showing summarized activity without screen
shots.
Figure-3: A Snapshot Detail showing a specific block of time recorded (10min), the random
screenshot taken, and the number of keyboard strokes and mouse movements.
Although all of this detail is excellent (perhaps a bit Orwellian), I only examined it in any
detail during the first couple of weeks to ensure the person was doing the work
(establishing trustworthiness), and velocity (establishing how much production I might
expect). Afterwards, I rarely looked at the detail again unless I suspected there was a
problem with either to validate or invalidate my suspicions.

When the assignments were done, or I was done with the gig-freelancer, I simply
terminated the engagement. I also had the opportunity to pause the engagement (which
kept the engagement live, but inactive). Of course, the gig-freelancer can quit at any time
without notice.

There is even the opportunity to rate and endorse (or not) the gig-freelancer and they have
the opportunity to rate and endorse (or not) you as someone for whom to work. So, a gig-
freelancer has a motive to not leave you in a bind by quitting without your being able to
smooth their transition out of the project and you have a motivation to not mistreat the gig-
freelancer.

Payments are simple. Every week I am given a work summary and bill to review. At this
time, I have the opportunity to address discrepancies or even offer an earnings supplement
(bonus, expenses, whatever there might be). The following day, the amounts billed and
approved are charged to the credit-card I provided and a full invoice and work package is
created for my records.

The costs for using the service as the company/person doing the hiring is 2.75% to cover the
fee charged by my credit-card company to UpWork. And the gig-freelancer is charged 10%
of their billing for using the service. All of the costs for the gig-freelancer to do business
including taxes, benefits, insurances, and other compliance issues as well as their
equipment and maintaining their capabilities are the responsibility of the gig-freelancer.

I have been using the service for a half-year and have no complaints about the service. Of
course, some hires were better performers than others (as you would expect). But my
investment in bringing them online was minimal and discharging them was a click of a
button (the same amount of effort as hiring them once selected).
 Change Agents (and disruptors) are never loved Joseph Paris

As a general rule, people are not comfortable with change and normally go to great lengths
to avoid change. This is doubly-so, or even triply so, of governments.

Senator Elizabeth Warren (D-MA) is quotes as saying, For many, the gig-economy is simply
the next step in a losing effort to build some economic security in a world where all the
benefits are floating to the top 10 percent. But she is certainly not the only one who has
reservations about the gig-economy.

Every day, we read about lawsuits against Uber and AirBnB (a room-sharing application
intended for those who want to rent a room in their home or even their entire home),
among others. Usually, these lawsuits are initiated by some local, state, or even the federal
government. The main reason is that these gig-economy businesses dont fit into the
existing rules and regulations governing business and the government wants to try to make
these businesses conform to the traditional ways of doing business. The usual reason given
is to protect workers or consumers (or incumbent business with a strong lobby). But these
are thinly veiled distractions from the real reason, which is so the government can ensure
their tax revenue is maintained and maximized.
But is choosing when to work and what to work upon bad for the earner? Is having
someone who is an entrepreneur and needs to ensure the highest quality of delivery to
maintain and expand their earning portfolio as the only means to ensure their success bad
for the consumer? After all, if the gig-freelancer does a poor job and gets a poor reputation,
the gig-freelancer will never build a positive reputation dooming the gig-freelancers
prospects for success.

Certainly, there are challenges that need to be faced with any disruptor. There will be
instances where someone figures out a way to game the system in their favor. But we
should not kill the initiative for fear of these challenges. Rather, the challenges should be
faced and addressed as they make themselves known.

For instance, an article on FastCompany, entitled The Gig Economy Wont Last Because Its
Being Sued to Death, highlights the case of two housekeepers who were sisters, Vilma and
Greta Zenalaj. They had responded to an advertisement on Craigslist from a company then
called Handybook (now simply called Handy) for a housekeeping gig and their offer won the
deal. Their experience was not a pleasant one.

First the company took a commission. Its not clear whether the sisters knew they were
going to have to pay a commission on the work they did but somebody has to pay and
they should have made sure that was spelled-out before accepting the work. Its also
unclear whether the sisters were told that they would not get paid for their idle time if they
had to wait for less than an hour if their appointment was late letting them into the home
or if they knew they had to pay their own expenses and were not compensated for travel
time. And if the job took longer than anticipated, calling to get authorization for more pay
for more work was difficult. In the end, it was a poor experience.

I wonder why, with such a negative experience, the sisters didnt simply stop working for
Handy.

But, this just goes to demonstrate who could be a gig-freelancer and be successful at it, and
who should not be a gig-freelancer because they wont be successful at it. In my opinion, a
successful gig-freelancer will have (at a minimum) the following characteristics;

Be Entrepreneurial. They are their own boss and this requires discipline. They have to be
innovative. They cant be risk averse, but they also cant be foolish. The have to figure out
business problems in real-time. They have to consistently drive value (fee vs deliverable) to
their customer and build a reputation for success.

Have (or quickly gain) Business Savvy. They have to know basic accounting and the
importance of cash-flow. They have to know the rules and regulations regarding the
operating of their business especially taxes (self-employment tax can be a real shocker).

Be (or become) Self-Reliant. They have to plan ahead because they will be responsible for
providing for both their present and future. They will have to organize their own healthcare
(unless covered by a spouse) and their retirement. They will have to realize that they dont
get paid vacations they can take a vacation any time, but they are not earning when they
do.

In reality, they are a business person. And a business person only gets the leftovers; the
leftover income after everyone else gets paid (other gig-freelancers, suppliers, travel,
insurances, taxes, and so on). And the leftover time after all of the deliverables for the gigs
have been completed. The key to success it to ensure that the leftovers adequately and
satisfactorily produce what you want to achieve.
Where to start to learn more:

Probably the best article I read whilst doing my research for this piece came from the United
States Department of Labor, Bureau of Labor and Statistics, entitled; Career Outlook,
Working in a gig-economy (May 2016). Not only does it offer the pros and cons of
participating in the gig-economy, it offers solid background on the gig-economy, advice, and
references to supplemental reading materials. If you are thinking about participating in the
gig-economy, or already in the gig-economy and feel you need additional guidance, start
here.

Disclaimer: The author specifically disclaims any endorsement that may be implied of any
company mentioned in this article. The information and references contained herein are
the solely the opinions of the author and any reference to any company is merely a
reflection of his personal experiences with those referenced companies. Your experience
may not be the same. Caveat Emptor.

By Joseph F Paris Jr
Paris is the Founder and Chairman of the XONITEK Group of
Companies; an international management consultancy firm
specializing in all disciplines related to Operational
Excellence, the continuous and deliberate improvement of
company performance AND the circumstances of those who
work there to pursue Operational Excellence by Design
and not by coincidence.

He is also the Founder of the Operational Excellence Society,

with hundreds of members and several Chapters located
around the world, as well as the Owner of the Operational
Excellence Group on Linked-In, with over 40,000 members.

Connect with me on LinkedIn

Also find me at; Operational Excellence Society, XONITEK, or my Blog.

I am also the author of State Of ReadinessOperational Excellence as Precursor to

becoming a High-Performance Organization