Top 5 Takeaways From McKinsey’s Major Report on the Gig Economy

The gig workforce is growing by leaps and bounds — but not always in the way you might expect. Here’s what employers and employees need to know now.

 

Working 9 to 5, day in and day out, in the same place for the same employer, is an increasingly unfamiliar concept for many employees today. As the modern workplace continues to evolve, millions of people are opting to work independently. Yet this evolving “gig economy” has not been well measured in official labor statistics. That’s according to the McKinsey Global Institute, which recently surveyed 8,000 respondents across the United States, the United Kingdom, Germany, Sweden, France and Spain in an attempt to fill this data gap. The resulting report, Independent work: Choice, necessity, and the gig economy, finds that up to 162 million people in Europe and the United States — or 20 to 30 percent of the working-age population — now engage in some form of independent work. The report provides valuable insight, both for independent workers and for employers who hope to remain competitive in the years to come.

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1. The independent workforce is much larger than expected

Official data collection on the gig economy is insufficient and outdated, and government data that does exist significantly undercounts those who engage in independent work to supplement their primary incomes, such as traditional jobholders who do independent work on the side, or retirees and students who work independently part-time. Gig-economy workers range from those are full-time self-employed to those who work a few hours a month driving Uber cars or selling items on Etsy. Overall, the report found there are now 54 million to 68 million independent earners in the United States.

2. The gig economy is not just for millennials

Think those 60 million or so people are all 20-something bloggers? Think again. The survey reveals that the independent workforce is very diverse in terms of age, income levels, educational attainment and gender — a finding that holds true across all countries. There are independent workers in all occupations and industries, and the survey strongly debunks the common myth that independent work is dominated by millennials, who represent less than one-quarter of all independent workers.

3. Most people who work independently do so because they want to—not because they have to.

The majority of independent workers surveyed report that they choose this working style because they are attracted by its autonomy and flexibility. Not only that, McKinsey also surveyed employers in traditional jobs and found that 1 in 6 would like to become primary independent earners. In fact, for every primary independent worker who would prefer a traditional job, more than two traditional workers hope to shift in the opposite direction. Clearly, gig-economy workers are not just people who have been forced out of full-time jobs, but quite often, they are individuals who have opted out of traditional roles to find work that better fits their lives. Employers who determine how to offer flexibility and autonomy to their full-time workers will keep more of their best people on the job.

4. Those who choose to work independently report the highest levels of satisfaction

People who choose to be their own bosses and work independently are more engaged in their work, and relish that they have more control over when and where their work is done. They cite higher satisfaction than traditional workers across all survey categories, and are even happier with their level of income than full-time workers. By contrast, people who do not work in their preferred manner — whether independent or in traditional jobs — are notably less satisfied than those who are able to follow their preferences.

5. Digital platforms for the gig economy are just getting started

Much has been written about the use of digital platforms such as Upwork, Uber, TaskRabbit and Freelancer.com, which all connect gig-economy workers to independent work. However, the use of these platforms has only just scratched the surface. While these sites have grown rapidly in recent years, only 15 percent of independent earners use them. As these online marketplaces continue to expand, they could have a transformative impact by efficiently matching a larger pool of workers with consumers of their services.

Intrigued? Read the full report on independent work from McKinsey here.

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