US Labor Market Trends 2018: Gig Economy Strengthens

By: Nancy Ordman

More jobs, lower unemployment, and a shortage of workers with the right skills – the 2017 labor market saw all three of these trends. Some sectors saw moderate wage growth. The number of workers working involuntarily part-time also declined. All of these factors encourage the growth of the gig economy, according to a report from Randstad Sourceright.

According to Randstad, up to 61 percent of employers surveyed intend to convert about a third of full-time positions to freelance or contract positions. Employers see advantages to freeing up permanent positions: gaining the flexibility to hire the skills they need at the time they need them and responding quickly to demands for job skills that cannot be predicted. Workers who have recently

Gig Economy Graphic. Image credit: Mark Warner/CC BY 2.0

finished school, whether college or vocational training, are most likely to have the freshest skills to offer.

Millennials are generally more comfortable working contract or limited-term positions and they often combine two (or more) gigs. However, workers of all ages participate in this economy; according to a survey from the Freelancers Union, people increasingly prefer freelancing. Another salient characteristic of this group, and one that is particularly germane to employers, is that independent workers are more likely to participate in skill-related education than their permanently-hired colleagues (55 percent to 30 percent).

Employers are also taking into consideration whether to relax hiring requirements in order to broaden the talent pool. Indeed’s Hiring Lab reports that searches for jobs that are “felony friendly” and require “no background check” are two of the 100 fastest-growing search terms, perhaps reflecting, in part, the number of potential workers that have drug-related felony arrests in their records. This trend could be good news for a lot of workers with criminal convictions.

Another way employers are responding to this labor market is to increase training – called upskilling –  for current employees. Since employees do not demonstrate much interest in taking the initiative, their companies will need to identify and train for high-demand skills.