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A brief history of the gig economy

From 18th-century labor to TaskRabbit, the flexible workforce is evolving

What does a traditional job look like? Many people would describe it as a full-time role with a single company. Yet, the FTE—full-time equivalent—employee/employer relationship is a fairly recent phenomenon. And it appears that the tide is turning from this full-time paradigm to one that pundits and analysts call the “gig economy.”

The transition from FTEs to gig workers

Much has been made in the last two years about the gig economy, what it means for workers, and whether it will erode the traditional FTE way working.

For roughly the last half-century, we’ve seen a transition away stable employment. The number of people who are self-employed in flexible roles is growing steadily. According to Fast Company, as of May 2015, 15.5 million people in the U.S. were self-employed—an increase of roughly 1 million since May 2014. By 2020, an estimated more than 40 percent of the American workforce, or 60 million people, will be independent workers—freelancers, contractors, and temporary employees.

So as the so-called traditional FTE model gives way to the economy, the prospect is good that, as long as gigging is super-charged by the internet, the gig economy will have an increasing impact on the way people all around the world work.

When gig work was a way of life

It turns out that the gigging so many people are talking about and taking part in is a way of life that’s not all that different from the way we lived prior to the industrial revolution.

“While it might seem that long-established ways of working are being disrupted, history shows us that the one-person, one-career model is a relatively recent phenomenon,” Tawny Paul, a British historian, wrote for Business Insider in July.

“Prior to industrialisation in the 19th century, most people worked multiple jobs to piece together a living. Looking to the past uncovers some of the challenges, benefits and consequences of a gig economy,” Paul said.

Paul cited a diary of Edmund Harrold to illustrate the point. “A resident of Manchester in the early 18th century, he was a barber by training and title. He rented a small shop, shaved customers’ heads, bought and sold hair, and crafted wigs. In the hours unfilled by this, he worked as a book dealer, and eventually as an auctioneer, selling various items in alehouses within Manchester and in outlying towns. He lent out money when he had it, earning 10% interest on his holdings.”

The internet propels the next wave of gig workers

At the turn of the last century, with the rise of the internet, people looking for gigs and those looking to hire flexible workers could connect, seamlessly and efficiently, like never before.

Craigslist, which launched in 1996, provided one of the first global platforms for gigging. It hasn’t changed much since—it’s a place where people looking for work post their availability free of charge and those looking to hire get what they need for a small cost.

Not long after the emergence of craigslist.org, Web 2.0 and a proliferation of apps ushered in sites highly attuned to the collaborative consumption of the gig economy. TaskRabbit, Lyft, Uber, Thumbtack, Postmates, Dogvacay, Airbnb … the list goes on.

This infographic from William Jessup University depicts how some of the biggest players in the gig economy achieved success:

The more recent historic moments of the gig economy as told by AirBnb, Uber, and Lyft

These companies “helped create a novel form of business,” as Nathan Heller wrote for the New Yorker in his May 2017 article “Is the Gig Economy Working?”

“The model goes by many names—the sharing economy; the gig economy; the on-demand, peer, or platform economy—but the companies share certain premises. They typically have ratings-based marketplaces and in-app payment systems. They give workers the chance to earn money on their own schedules, rather than through professional accession. And they find toeholds in sclerotic industries,” Heller continued.

Sclerotic industries—those that have become rigid and lost the ability to adapt—are ripe for disruption. Think of Uber’s disruption of the taxicab industry, based largely on identifying waste and opportunities for innovation in transporting people and now products such as restaurant meals.

Sclerotic industries—those that have become rigid and lost the ability to adapt—are ripe for disruption.

More recently, online freelancing platforms that enable consumer and enterprise leaders to connect with virtual workers are taking the gig economy to new heights. Upwork, Contently, PeoplePerHour, Freelance, Fiverr, Amazon’s Mechanical Turk and other online freelancing platforms are just a few of these.

Why some enterprises haven’t fully embraced gig workers

Although many enterprises report using flex workers to fulfill some of their business needs, one of the greatest hesitations enterprise leaders have in adopting gig workers is the ability to effectively hire, train and manage them at scale.

That’s where companies such as Liveops come in, sourcing a vast network of independent contractor agents who are available to work in customer service and sales. Liveops provides the tools for agent certification on the customer’s programs and for monitoring and optimizing agent performance.

This multiplies the power of a flexible workforce, because enterprises no longer have to build their own systems for sourcing, skill development and management of individual gig workers, and they gain access to a network of thousands of virtual agents to handle their business needs on an enterprise scale.

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Shelly Strom

Shelly Strom

Shelly Strom is a writer for Liveops. With a background in business journalism and corporate communications, she specializes in researching the call center industry to uncover key trends, news and analysis.