How the gig economy is impacting hiring

The freelance, independent-contractor labor market known as the gig economy is distinguished by working short-term contracts, or gigs, such as driving for Uber, Lyft  or Instacart.

The majority of the U.S. workforce will be freelancers by 2027, according to a study called “Freelancing in America: 2017,” conducted by Edelman Intelligence. The annual study, commissioned in partnership by the Freelancers Union and Upwork Global, estimates that 36% of the U.S. workforce consists of freelancers who contribute approximately $1.4 trillion annually—an increase of almost 30% over the previous year.

Findings in Edelman’s study indicate that the top drivers motivating people to start freelancing include being their own boss, choosing what, where and when they work, and to earn extra money. Millennials are driving this movement, with a whopping 47% working independently, the most of any generation.

Who are these freelancing millennials?

Matthew Marks, certified massage therapist and CrossFit coach in Waunakee, Wis., drives for Uber at night after years of working in foodservice. A father of two, the 35-year-old Marks appreciates the flexibility of driving for Uber. “Some nights I will get the kids in bed by 8 and go out driving from 9 to 2 a.m., allowing me to earn extra cash without missing out on watching my kids grow up,” he says.

As a server, Marks only made $2.19 an hour, relying completely on tips. By comparison, he averages $25 an hour driving for Uber. When asked if he would ever return to foodservice, Marks says, “Maybe I would bartend where you can make money, but probably not serving ever again.”

It’s other demographics, too

Todd Severns, 52, from Portage, Wis., works independently as a house cleaner. He decides whom he wants to clean for, when and how much to charge. Severns, who was a garrison cook in the army, tried cooking professionally for years after his stint there. “There’s not enough money and definitely no security,” he says. “For as hard as you work cooking, the pay is dismal. When times were slow I’d be told to go home, or not come in. If you make a career of it and go into management where the money is, then you’re married to it—working nights, holidays and having no life at all.”

Replacing part-time with full-time employees

Brad Kahn, dining room manager for Madison College Food Services in Madison, Wis, points out that many companies are doing everything they can to avoid hiring full-time employees, and believes that’s part of what’s driving the gig movement.

“On the contrary, our operation has been, for the last seven years or so, doing all we can to replace our casuals and part-timers with full-time workers,” Kahn says. “We feel like there is a huge difference in the quality of work we get from full-time employees who see their work here as a career rather than just a job, and we’re certain that our continuing and growing success is due to our people.”

He believes benefits are his operation’s biggest selling point. As state employees, his hires are eligible for all the benefits that come with that: “Still, that doesn’t get us a lot of interest from the majority of our culinary students, who may be looking for more exciting culinary experiences with cutting-edge cuisines in hip restaurants in cool cities. The nontraditional students are much more interested in steady employment, traditional hours, health insurance, retirement benefits, etc. Many of them are delighted to come work with us, and we in turn are delighted to have them.”

The good life: Part time with benefits

LA Unified School District’s Food Services Division employs 3,700 workers. The majority of the operation’s permanent positions are scheduled at four hours or more daily. Although considered part-time, these four-hour employees are provided full benefits, and that helps the district attract new hires. The district also pays a minimum of $15.00 per hour, says Ellen Morgan, a public information officer for LAUSD. This helps the district retain workers, with many of its employees staying there long-term and choosing to retire there.

Morgan says LAUSD has not experienced any hiring concerns created by ride-hailing services such as Lyft or Uber. “If an employee leaves the district, it is to further their education or other opportunities,” she says. Due to its large workforce, LAUSD is currently interested in recruiting substitutes to fill day-to-day scheduling holes, who are in turn afforded an opportunity for permanent hire.

Making progress with perks

The culinary staff of University of Wisconsin Hospitals and Clinics in Madison serves approximately 1,100 patient meals per day. “We are actually seeing an increase in applicants,” says Lisa Bote, manager of retail and catering operations. “This could be because we went through a pay structure/compensation review and increased our entry-level base pay to align with industry standards.”

“We converted a lot of our part-time employees to full-time, and now only hire full-time, providing more stability and security,” she says. “Ninety-eight percent of our employees are full-time. We provide set schedules based on operational needs so employees can organize their life outside of work.”

UW Hospitals and Clinics provides a comprehensive benefit package, including health, dental and vision, a tuition reimbursement program, employee assistance programs, free bus passes to get to/from work, discounted backup day care plans and an awards and recognition program.

Photo courtesy of Uber