In this episode of Direct Approach, Wayne is joined by John T. Fleming, direct selling expert and author of the new book, Ultimate Gig: Flexibility, Freedom, Rewards, discuss the rise of the gig economy, what independent contractors are looking for, and how that is changing what companies must do to attract and retain this new generation of workers.
When we started our work to write Ultimate Gig, we sought to distinguish between the many labels that are often used to describe a new form of work. New labels continue to emerge, almost as if new researchers and writers think they have to position their work with some label that has not been used as a way of bringing attention to their research. I have many academic friends; however, I put many of the research articles that I read into the academic conundrum file. We believe that we already have enough labels. We subscribe to the philosophy “less is more” especially when learning new concepts. Contributing to learning that is actionable has been our focus throughout our work.
One of the most interesting books I read in my study of the gig economy was The Sharing Economy: The End of Employment and the Rise of Crowd-Based Capitalismby Arun Sundararajan, professor at New York University’s Stern School of Business. Unlike many of the other terms we examined, sharing economy is much more than a description of work from our point of view. The sharing economy is more about a philosophy that strives to gain more from what is already in place to benefit a larger group, even a city. The philosophy that supports the sharing economy is not always focused on profit as the primary motive; however, execution of the philosophy can be profitable. Sharing does not have profit as the primary objective. The sharing economy is about sharing assets for the purpose of utilizing assets more effectively and reducing expenses for all involved. As Sundararajan so boldly states in the subtitle of his book, the sharing economy could be the beginning of the end of employment, at least by traditional definitions.
As we read many research papers written by academics in various parts of the world, it became apparent that the concept of a sharing economy is global and embraced by a new generation of thought leaders as a solution to some of the most significant challenges of a civilized society. When we share underutilized assets with others who can use the asset, we may reduce the expenses associated with what we own and enable others to enjoy the asset at less than traditional market pricing.
One of the most interesting examples of a sharing economy service is BlaBlaCar, the France-based transportation service. As with all things created by humankind, the creation starts with an idea or a vision for what could be. The vision for BlaBlaCar came about in 2006 when its co-founders Francis Nappez, Frédéric Mazzella and Nicolas Brusson could not get tickets on any of the trains going to their planned destination.
Today, BlaBlaCar is the world’s leading long-distance carpooling platform, connecting drivers and passengers in 22 countries who are looking to travel long distances so they can travel together and share the cost. BlaBlaCar transports an estimated 25 million passengers per quarter (pre-COVID data). That’s 100 million passengers traveling with a driver of choice and, on average, 3 other passengers if the vehicle is full. The U.S. Amtrak system transports approximately 80,000 passengers per day (pre-COVID). The system is rather antiquated, and on-time reliability is always a question that riders simply adjust to rather than question. The amazing comparison we make is the fact that BlaBlaCar transports about three times the number of passengers as Amtrak with no burden on governance. (Amtrak is owned by U.S. Federal Government).
Why do we share the story of BlaBlaCar? Shared assets and shared space are a serious thought embraced by city planners, architects and government officials designing and planning the future. When it comes to something as important as ground transportation, will it continue to be important that improved services be provided by the government or deployed to more entrepreneurial concepts that involve the crowd? Will services like BlaBlaCar replace the need for hundreds of millions being invested in high-speed railways? The questions are many and worthy of continued exploration.
While we know, from the research conducted, that the primary motivations for working a gig are related to the desire for flexibility and the opportunity to earn “extra” money, we also know that gigs can provide so much more. We take the position that there is no real validation for the words “extra money.” The words are simply used as a convenient way to explain how money can be earned working part-time or through flexible work opportunities. A very small percentage of the population may experience having “extra money”; however, there is no such experience for the masses. When income exceeds expenses, the additional income should not be considered “extra.” The positive difference between earnings and expenses should always fuel the savings and investment plan, not the spending plan.
Gigs provide learning. Knowledge can be expanded and even gained relative to something never done before. Skills can be perfected, and confidence enhanced without risk. As we continued to research and study, we also continued to learn and respect the gig economy as being much more than a gig opportunity. We often think in terms of dollars to be gained when one works, especially when the work is part-time. Gig-providing companies are also focused on marketing based upon dollars to be earned more so than knowledge and skills to be tested or mastered while earning a decent return on the investment of time.
As we continued to learn from our research and study of the gig economy, we realized the need to redefine “return on investment” or R.O.I. Measuring a return on dollars earned for time spent or even attempting to compare one gig to another is clearly an unfair comparison that may be a waste of marketing effort. R.O.I. must be defined from the perspective, objective and purpose of the gig worker. This is true for each type of gig worker. Those working transportation gigs will benefit from becoming very customer- and service-focused. Those participating in selling gigs will soon realize that good products seldom sell themselves, even if they are exposed to enough people. Exposure can be purchased in the form of advertising; however, any investment in advertising will increase risks and overhead.
During the writing of the manuscript, it became apparent that gig workers can master what advertising has never been able to accomplish: the building and cultivation of relationships.
Up to 80% of the labor force may be interested in a gig.
During our research, we came across data and insights relative to the gig economy created by academics and also by formal institutions, even the United States Bureau Of Labor Statistics and the International Monetary Fund. What we found to be most amazing was the continuous discovery of surveys that measured interest in the gig economy amongst traditional workers. It was not unusual to find a positive interest as high as 80%. We also found the U.S. Department of Labor to consistently forecast the gig economy’s growth and appeal amongst workers. Those forecasts remain strong and positive as of this writing. Within a few years, the number of workers in independent contractor status, a form of micro-entrepreneurship, will exceed 50% of all workers.
The interest in gig work was not surprising to us because we had already looked at Americans’ financial condition by age segment. The data we found should be woven into the fabric of our educational process, including the corporate guidance provided to employees. This will help more people better understand the purpose and value of money in the societies and economies in which we live.
Instead of marketing and selling credit as if it is a value; society and its people might benefit from simple and basic planning guidance on the importance of avoiding debt, increasing saving and investing a portion of what is earned. Credit can easily turn into excessive debt, therefore becoming the one-way ticket to the wrong destination.
Gig-providing companies can increase their value proposition by ensuring that their gig workers and affiliates of their brands take the time to plan their gig participation. This thought was our motivation for creating the Ultimate Gig Planning Guide.
The high level of interest in gigs is a result of the impact of technology on personal lives and world economies. It is easier to do the work when technology is an effective enabler and connector between products, services, and those who desire to engage the product or service. However, the basic experience gained by workers who take on the responsibility of providing for themselves and their families is also what is fueling the rise and growth of the gig economy. In plain language, workers are not making the principle work through one traditional form of work. In order to earn more, someone has to increase the wages. Annual wage increases on traditional jobs (2% to 4% per year) barely keep pace with inflation, and workers realize this.
A gig can make a difference. Earning a few hundred dollars from an investment of time is the equivalent of increasing personal and/or household earnings beyond what can be expected from the traditional form of work.
The difference between earning more than you spend could be a gig.
The statement appears to be simple in nature, but the dilemma is quite serious. Based on research that can be conducted by anyone, it becomes obvious that most workers in mature societies throughout the world, especially in the United States of America, spend more than they earn. This becomes what we will refer to as the “trap.” Seventy percent of Americans in the age category of 35 – 44 have saved less than $1,000.00.
A mouse would be wise to avoid attempting to eat cheese from a trap. Fortunately, for the overall population of mice, there are few traps. Seventy percent of Americans experiencing their golden age of youth and maturity evidently struggle with execution and adherence to the principle: earn more than you spend. The consequences are severe. According to 2020 stats found at Statista, approximately 90% of men and women in the U.S. have a high school or greater education. Could it be that this most important principle is not being taught in formal educational curricula?
Based upon our team’s research, we find the opportunity to earn extra money to be a primary motivator. The experience of spending more than earnings is real, and with the growth of the gig economy, the possibility to add incremental income to a budget that is not working can be life-changing. Understanding this basic motivation should be understood by the marketers within all gig-providing companies. The audience of gig workers is motivated by basic and realistic objectives to balance the out relationship between the amount earned vs. the amount spent, which is prevalent in a great majority of the population.
Our research revealed that most gig workers are looking to earn a few hundred dollars per month, not a few thousand. (Ten percent of gig workers will pursue and earn serious income from their gig or multiple gigs.) Gig-providing companies that market their income-earning opportunities to the needs and objectives of the majority of the people will continue to fuel a revolution and redefinition of the way we work.
Flexibility in how we can work now provides more opportunities than ever before to convert underutilized time into a valuable and possibly life-changing return on the investment.
We live busy lives. At the end of the day, week, month or year, we can easily grade ourselves by measuring the return on our investment of time. Time is our blessing. We should measure how we take care of ourselves and our families and how we contribute to the welfare of others.
The preceding are serious metrics. The more straightforward metrics are simply related to the amount of money earned, saved and debt incurred. When the latter metrics are not as desirable as we would like, we can choose to take steps to improve our situation. Because of the emergence and phenomenal growth of the gig economy, we have more choices than at any time in history to engage supplemental income opportunities that could potentially be life-changing.
Gigs do not require resumes, only a desire to work at something that provides value to others. New learning may be necessary; however, many gigs are intuitive. It does not require new learning to engage in a gig that offers an opportunity to use current skills and/or assets to create a financial return on the investment of time.
When we look at the four primary categories of gigs — transportation, service, selling and leasing — we find people from all walks of life engaged. Most of us have benefitted from transportation and service gigs, and the diversity experienced has been incredible. Men and women from all backgrounds and ages have provided me with service from transportation, fixing household items in need of repair, and delivering something I ordered. I once rode with a transportation driver who was a teacher on a break for a few hours. Another was a student working on a Ph.D. using underutilized time. I have also met moms who are working a gig while the kids are at school and highly skilled professionals working their gig with a goal to develop a new enterprise.
The primary thought to share is: Underutilized time is probably our most underutilized asset. Marketers within gig-providing companies can assume that there is always an audience that can benefit from the opportunity being presented. The challenge: present a choice that becomes the preferred choice of a vast prospective audience of gig explorers and seekers.
As we noted in the Ultimate Gig book and Ultimate Gig Planning Guide, over 50% of workers are predicted to be engaged in some form of gig work within the next few years, and up to 80% of all workers may be interested. Therefore, marketers do not have to establish interest; it is already there. It occurred to us that marketers who make clear distinctions that are easily understood when promoting their opportunities might help the prospective audience better understand how to use underutilized time in a creative manner that activates a financial return on the investment of time. The prospect does not need to be convinced that the compensation is fair or even better than something comparable. The audience needs to understand that they have underutilized time and how they can turn this asset into a value-added benefit by possibly connecting a passion, purpose, need or love (for product or service).
This thought and insight led us to see the value of selling gigs in particular. They can be operated in so many different ways. They no longer require a physical presence; it’s all about digital presence. We can buy cars we have never seen, even homes, via a digital presentation. If you have a product to sell, there are platforms like Etsy where you can market your products globally.
If you are looking for something to sell and the opportunity to create your own brand, there are companies like Shopify that specialize in providing all the support you need to launch your own eCommerce-based business. Because of the role technology plays, it is now possible to manage multiple gigs without conflict.
If you are looking to affiliate with a proven brand, it is hard to beat the offers direct selling companies provide. Direct selling companies that offer multiple categories of products actually offer multiple categories of gigs even though all products are under one company. Example: Different categories of products appeal to different types of consumers. By segmenting the selling focus by category, each category can be promoted more effectively, reducing the risk of consumer confusion and actually simplifying the appeal to prospective direct sellers. One direct seller may actually be working multiple gigs when adopting this type of thinking.
I thought about the many direct selling companies that I am familiar with that offer multiple categories of products. The independent contractors typically gravitate to the products they enjoy and benefit from the most; however, many of the websites we visited offer all products on one platform, which can be confusing to the consumer. The question becomes, where does the consumer start, especially the prospective consumer?
The common asset associated with all selling gigs is associated with the fact that all selling gigs are typically based on purchasing from a platform, no longer a store. The platform is live 24/7. Therefore, the gig worker can work 24/7. Underutilized time may be identified as morning hours, afternoon hours, the hours between specific hours, evening hours and even nighttime hours. Promotions can be targeted to specific groups and sent out at midnight or at 6:00 a.m.; the choice is up to the gig worker.
Most selling gigs reward for customer acquisition and also for influencing repeat customer purchases. Once the selling gig worker has acquired customers and repeat customers, momentum may activate due to the personal attention given to the customer by the seller, which may trigger referrals and more customer purchases. As the seller’s business gains even more momentum, the seller may be sleeping, but the store is still open….the eCommerce platform is live 24/7. Underutilized time (sleeping) now begins to be profitable.
Micro-enterprise opportunities are now available to all segments of the population. This enables people from all walks of life to be in business for themselves as an independent contractor working from home or smartphone.
As we sought to understand who was being attracted to the gig economy, it quickly became apparent that gig workers come from all walks of life. Millennials and Generation Z are not so interested in the traditional model of work. They seek more flexibility, and gig work is all about flexibility and freedom in how work can be accomplished. We also found that retirement may not be working as well as planned for the majority of retirees.
Middle-aged Americans have been hit hard by the recent pandemic. But even before the pandemic, older workers were already beginning to realize the impact of such technology as artificial intelligence and robots on the various forms of work. Definitions of work have changed, and many have been displaced or replaced. Therefore, all segments of the population are looking for ways to keep income higher than expenses.
Retirees in the traditional workforce are disadvantaged when seeking a return to the workforce. Women who take maternity leave or decide to stay home to take care of children during their formative years have always understood the challenges of returning to the workforce after long periods of absence. Debt and a lower-than-planned level of savings and investments have become the American way of living and working. (The statistics reveal this to be true. See Welcome to the Gig Economy and the Ultimate Gig book for specific citations.)
When we reflect on all of the comments above, it begins to sound like a perfect storm. But within this storm is a rainbow of new opportunities far greater than perhaps envisioned 100 years ago or even a few short years ago.
Flexibility in how we work can be attained. Traditional businesses are expected to continue their offer of alternative work arrangements. In fact, 51% of all businesses are expected to be offering more flexible work plans vs. the traditional 9-to-5 format. Micro-enterprise opportunities are unleashed to the masses, and the gig economy makes it possible.
The following insights are shared as a result of research and study of the gig economy over a two-year period. My goal in writing the Ultimate Gig book was to give gig seekers, gig workers and those who create gig work a comprehensive look at the gig economy from a third-party perspective. The book was written based on the perspectives of the author and those who contributed to the project. No one involved was a gig worker or gig provider at the time the book was written. The following insights are created from notes taken during the development of the manuscript for Ultimate Gig and thoughts developed that did not fit into the objectives and context of the book.
Some of the insights shared will be very interesting to executives within gig-providing companies who are continually seeking to stay abreast of trends and ideas that can impact their strategic plan. Gig workers will find many of the insights to be thought-provoking and help them better understand the significance of their choice of gig work. We have made no distinction as to what might be shared with workers vs. executives or even academics and regulators. The insights apply to anyone interested in the gig economy phenomenon. The insights shared are personal and do not necessarily reflect support from formal primary research. Secondary research has been read and studied extensively. It is our belief and hope that those responsible for providing gig opportunities and those seeking and working gigs will benefit from the thoughts shared.
I will add to the following insights regularly, so come back from time to time to see what’s new. No attempt will be made to polish the thoughts shared or be grammatically correct in how every idea and insight is expressed. These insights are not intended to be another book or formal collection. Some of the insights shared speak to dual audiences. Other insights will appear to be speaking to a specific audience. Both thoughts are true. This space simply provides me with an opportunity to share thoughts that we hope will be beneficial to all of our subscribers.
We devoted an entire chapter to the subject and role technology played in the emergence of the gig economy and the role technology will continue to play in the future of all businesses. It quickly became apparent to us that the pioneering gig-providing companies were technology-based companies that simply connected the dots between the provider of a product or service with a consumer. Apps quickly become a focus, and they have, indeed, changed the game. However, behind the app and all of the marketing strategies is the data warehouse and how data is accumulated and used to better forge the relationship with the consumer. Data is the key to providing a quality of customer service hardly imagined a few short years ago. For gig-providing companies, the customer is the gig worker and the ultimate consumer of the product or service.
A personal and recent experience was a model of how data can be managed. While shopping online the night before Thanksgiving, I was reminded by a digital message that a few of the items I had viewed could be delivered by 8 a.m. the following day if I made my selection within 30 minutes. I was shopping online at 10 p.m. that night. I made my selection, and the product was at my door less than 10 hours later. A text message arrived soon after the product was delivered with a picture of the product at my front door. This experience made me realize that the utilization of data had immediately been handled by the order processing, payment processing, fulfillment/delivery, and customer service systems in rapid succession. The customer service function was also involved because the follow-up was immediate. My order has also been analyzed against previous orders, and artificial intelligence is already recommending other items that I may be interested in purchasing.
Billions of bits are data are analyzed every day to make life and work easier. The gig economy has used technology to make work easier. “Work-from-smartphone” is as appropriate a phrase as “work-from-home.”
When we started our research, we did not find consistent metrics relative to the gig economy. What we did find was very informative as we shaped our approach to the book. One of the subjects we decided to devote a chapter to was the role women were playing in the growth of the gig economy. Based on my personal experience working for “the company for women,” Avon Products Inc., it seemed ideal to focus on flexibility and freedom in how and when work was performed.
When I worked at Avon, women represented probably about 99% of the salesforce of Avon Representatives. The experience taught me many lessons that have impacted my way of thinking. When I began studying the gig economy, I assumed women would be a primary component of the gig economy growth. However, when we started our research, we found that women were reported to be approximately one-third of all gig workers.
When we conducted our own primary research, we anxiously awaited the findings, as we wanted our own data that would be as current as possible. We conducted our research in July 2020, right in the middle of the pandemic. Those who participated in our survey, conducted by one of the best and most reliable research organizations in the world, volunteered to answer our questions. The qualification to participate in the survey was simple: be a gig worker. In our survey sample of 1,001 participants, 51% were men and 49% women, representing a significant shift. (The shift was not unexpected. A Hyperwallet survey of gig workers conducted in 2017 predicted the shift, declaring: the future of gig work will be about women.)
The previous statements should have a significant impact on the marketing departments responsible for attracting gig workers. Some types of gig work, especially within the service category, may continue to attract more men; however, assumptions should not be made. With the growing interest in micro-entrepreneurship and opportunities to represent platforms and brands, we easily forecast the future of gig work to at least be balanced between the participation of men and women. The shrinking role of employees and the growing appeal of alternative work possibilities appear to be added fuel for the gig economy’s continued growth.