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The gig economy: transforming the workforce

The world of work is changing dramatically, and the shape of the workforce is changing with it. As organizations respond to the forces of globalization and technology innovation, they need to be agile enough to address rapidly shifting consumer preferences, compete with more nimble start-ups and scale or descale resources depending on demand. In a low-growth environment, they also need to be able to rigorously manage costs.

Contingent workers: more than a passing trend

The rise of the gig economy is helping organizations address these needs. In a recent survey we conducted of employers in the US, one in two organizations indicated that they had increased their use of gig workers in the last five years.

And it seems to be more than a passing trend, as two in five organizations expect to increase their use of the contingent workforce by 2020. In fact, one in three employers of 100,000 employees or more expect to use 30% or more contingent workers in the same timeframe.

It was only a matter of time before technology fundamentally altered the nature and perception of how we work. Today’s gig economy is simply a reminder that we must continue to look at the world in a new way.

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Video: A gig economy that’s here to stay

We are seeing a convergence of cost reduction initiatives and the need for employers to have more agility, with workers looking for more flexibility. Together, these objectives are driving a shift toward a contingent workforce.”

– Tony Steadman, Americas Total Talent Supply Chain Advisory Leader, EY

of organizations expect to increase their use of contingent workers in the next five years

What do we mean by contingent workforce?

A contingent workforce is a provisional group of workers who work for an organization on a non-permanent basis. These contingent workers — or giggers — are also known as freelancers, independent professionals, temporary contract workers, independent contractors or consultants. We do not include workers who form part of an outsourcing arrangement with a third party as part of the contingent workforce.

Defining your future workforce

Our survey identifies the most notable trends that are significantly increasing the use of gig workers around the world.

The benefits and challenges

Leveraging specific skills and capabilities that are beyond the existing workforce. More nimbly responding to peaks and troughs in workforce requirements. Controlling labor costs. Even helping to overcome resistance to change within a legacy workforce. These are some of the benefits of tapping into the contingent workforce.

Yet, as the gig economy grows, there are new challenges for organizations. Broken governance models, lack of accountability for the contingent workforce, multiple vendor management systems, manual talent management processes and only basic cost measures are only a few of the issues organizations grapple with.

There are also a number of risks relating to employment law and regulatory compliance, as well as the security of information, intellectual property and cyber security. Relatively few organizations feel fully confident in their ability to insulate themselves robustly.


see contingent workers as helping to control labor costs

What giggers really want

of giggers agree that contingent working is how they want to progress their career
would prefer not to be employed full-time
believe the benefits of contingent working outweigh the downsides always or most of the time

Part of the received wisdom on the gig economy seems to be that contingent workers are only doing so because they are unable to find permanent employment. Evidence from an EY survey of more than 1,000 contingent workers in the US suggests otherwise. More than half of giggers see contingent working as how they want to progress their career.

In fact, a clear majority of contingent workers would not prefer full-time employment. Two in three contingent workers believe the benefits of contingent working outweigh the downside always or most of the time. This remarkable transformation in the world’s labor market appears to be driven by changing worker attitudes as much as it is by changing employer needs.

A wealth of opportunity

The rise of the contingent workforce holds a wealth of opportunities for organizations and workers alike. Organizations want to cut costs and improve their agility to meet constantly changing consumer demands. Contingent workers crave flexibility and control.

By collaborating on ways to overcome the potential risks, organizations and giggers alike can ride a rising tide of economic prosperity and performance.

What does your future workforce look like?

As our future continues to be revolutionized, which is fundamentally reshaping the world of work as we know it, we need to examine our strategies and plan for the future. Consider:

Video: Futurist Mike Walsh shares insights on how human behavior is changing.


Rate at which the contingent workforce has grown in the US in 10 years

Source: Contingent workforce taken to be equivalent to employees in alternative employment arrangements; data from: The Rise and Nature of Alternative Work Arrangements in the United States, 1995-2015 - Katz and Krueger

How EY can help

EY's People Advisory Services helps businesses create governance over their contingent workforce and address complex issues relating to organization transformation, end-to-end employee lifecycles and more.