Understand what the Gig Economy is and how it works

The concept of Gig Economy It is usually accompanied by some controversy, since it goes before the traditional formal employment contract.

What is the Gig Economy?

Employment is something that tends to be a priority in the professional lives of many people, after all, a signed employment contract is synonymous with labor rights guaranteed by law.

Vacations, 13th salary, sick leave, unemployment insurance and many other rights are essential to guarantee financial stability for workers.

But, when it comes to professional advancement, there is a group of people who see employment as a limiting factor.

This is because, in a 44-hour work week, it is difficult to fit in other activities that could generate financial gain, or even provide services to other companies, which contributes to the professional's prominence in the market.

The Gig Economy is an economic model that believes in self-employment, freelance work and no employment relationship as the ideal model for generating income..

In theory, in the Gig economy, workers perform work on demand, so they can determine how many companies they want to serve and for what prices.

The central idea is to ensure greater market fluidity: why should a talent restrict their services to a single company, if they can offer them to more than one and gain experience and financial gains?

On the other hand, why should a company restrict its processes to a specific talent, if it can test different methods in order to find the ideal model through the contribution of different talents?

This is a controversial idea and we will understand why later.

++What is a freelancer? Learn now and see how to start your career! (oadministrador.com)

What are the advantages of the Gig Economy?

Previously we saw a simplified explanation of the concept of Gig Economy, the idea is that you can understand how it works in practice for the worker.

It is worth mentioning that many companies already work in the Gig system, so they have teams made up of independent professionals, in the “service provision” model.

See below some reasons that encourage this application in companies.

Flexible schedule

Why spend 44 hours a week in an office on a permanent basis, when sometimes you have no work to do and need to “hang around” a little in the coffee shop?

In the Gig Economy, you don't waste this idle time, since you can only be at the company for the time necessary to perform your tasks. Done? Move on to your next client and have the opportunity to earn money.

Professional fluidity

A professional with an employment relationship usually adapts their services and even their own profile to the demands of the company they work for.

In the Gig Economy this is not necessary: you are an independent service provider, so you can work at your own pace and model, as long as it is in line with the expectations of the contractor.

So, you are not “stuck” in the model of a single company, which helps in building the so-called professional authority.

New business models

One of the advantages of the Gig Economy is that it encourages the formation of new business models.

There are currently several office models. Some companies have adopted the remote 100% model, where each worker performs their tasks from wherever they want.

What are the disadvantages of the Gig Economy?

Not everything is perfect, and now we finally get to the controversial part: after all, what are the disadvantages of the Gig Economy?

Let's start by talking about the discrepancy in the current reality: although we have companies that follow this model, most of them follow the traditional model. Therefore, it is not so easy for workers to adopt this method, due to market demand.

In addition, we have some other disadvantages, see:

No CLT rights

Gig Economy workers are self-employed, therefore, they do not have a formal employment record and, consequently, do not have CLT rights.

Your vacation must be paid for by yourself, there is no 13th salary and in case of illness there is no guarantee, since the company has no legal obligations, since you are not an employee.

Less stability for the worker

There is no denying that having a work record is an important element of stability. Even for proof of income, the pay slip ends up being the most accepted document.

When working in the Gig Economy model, this stability is reduced, since, although you have invoices and contracts to prove your income, they do not guarantee the same security as the CLT.

Difficulty in forming teams in companies

Freelance workers often work in a decentralized manner, where they focus on their own processes and assignments.

This can create difficulties in forming teams in companies, since this requires investing in the integration of talents and professional ideals.

Furthermore, in the Gig Economy the idea is to have no ties, so talent turnover is high, which also affects the formation of stable teams.

Legal problems

The big problem with the Gig Economy is that many companies take advantage of this concept to apply the irregular business model, where they have several unregistered employees.

In this case, workers perform their tasks as regular employees, complying with working hours, having a fixed salary and other responsibilities, but they are not registered on their employment record.

This is considered an irregularity, and unfortunately it becomes very common with the wrong application of the Gig Economy.

Why is the GIG Economy so controversial?

The reason the Gig Economy is so controversial is that many believe it is actually a ploy by companies to avoid labor costs.

Having a registered employee is not cheap, after all, you need to pay for your rights provided by law.

A self-employed worker, on the other hand, is much more economical, since as a service provider he should only receive payment for his services, without any type of link or obligation on the part of the company.

So, although it brings “flowery” concepts of fluidity and professional autonomy, there is still a lot of divergence of opinion regarding the honesty of applying this concept in companies.

In any case, through honesty and adjusting expectations it is possible to apply the Gig Economy correctly and thus obtain a business model that is advantageous and safe for both parties.

But for now, it is worth keeping an eye on the companies' conduct, in order to ensure that it is not a method of avoiding charges and responsibility with employees.

Roberta July 15, 2024

Career