Every year thousands, millions of people are switching from their regular jobs to enter the gig sector. There are many reasons behind this massive shift of people choosing to become freelancers, self-employed professionals, contractors, or gig workers. With the change in the economy, numerous organizations in various fields require the administrations of an outside workforce for short-term projects, tasks, or any ground-work job to be completed. Companies such as Uber, Ola, Zomato, Dunzo, which are part of this new economy, provide different services from similar types of service providers.
Today everyone is seeking a different way of working that gives them freedom to choose what they like and building their career in that direction. Owing to the high waves of change in the economy, it has become imperative to shed some light on the various terms related to it. Furthermore, there is a need to understand exactly what is the difference between a gig worker and an independent worker. This is essential as often people believe that being a gig worker is similar to working as a freelancer or a contractor. The information provided in this blog will also help people to make more informed decisions before entering into the gig economy.
Here, we are going to dive deep into how a gig worker is different from an independent worker based on their definition, job profile, services they provide, and of course their income. Read thoroughly to make sure you don’t miss out on anything.
They are not very different from freelancers however, a “gig” today is characterized as various job options that are available on specific apps, websites, or other platforms. Similar to a freelancer or contractor, these people also earn money independently and have the freedom to choose what kind of job they want to do but they have lesser control over the business. It is usually several different websites or companies that run such platforms through which they land on gigs related to various fields and earn their livelihood. Take Uber or Ola, for instance; an Uber driver is liable for a vehicle, paying for gas, keeping up the maintenance of the vehicle, and driving travelers to their locations. In any case, that driver doesn’t settle on their own rate, decide on the customers, or how the organization advertises their administration.
Earlier, a gig worker would get employed for small tasks, for example, delivering lunch boxes to the workplace, working as temporary drivers, doing warehouse audits, and so forth. But in recent years, organizations have taken this field of work to the next level. Presently, with the emergence of gig networks and applications for each industry and occupation level, there is a scarce difference between a gig worker and independent specialists. You can discover somebody to code your next computerized item or offer your expertise on writing their doctoral paper. In such cases, all of them have some authority over whom they work with.
The primary distinction between the two kinds of job profile is that gig work is attached to the parent organization’s design and how their foundation is constructed. These variables will in the general drive down the cost and consequently the worker’s benefit. Hiring a large workforce of gig workers is cost-efficient for the companies too. In any case, they regularly make significantly less money than independent workers because the platform takes a cut of their profit. Since anybody can become a part of this new economy, this sector is now crowded with both industry-skilled and low-skilled individuals who are seeking to explore more options in various fields. For a large section of our society that wants to earn their livelihood, it has brought a drastic change in their lives.
With the rise in the gig economy, it is the right time to move forward and become part of something big.
An independent worker is self-employed. The defining characteristics of independent work includes high level of control and autonomy, payment by task, assignment or sales and short-term duration work. A lot of employment agreements give you the above provided features hence, it is essential to know how they differ from each other and which one is best for you.
Under the list of independent workers comes freelancers, independent consultants, temporary workers, and contractors. All these independent professionals can be identified by their job role and work agreement. Since there is a fine line between all of them it can become quite confusing at times to understand the difference between them.
Below we have tried our best to explain the terms so you get a fair idea about the difference between gig workers and independent workers.
The one thing that helps freelancers stand out is that they are in total control of their work which makes them their own boss. Hence we can classify them as independent workers who run their own businesses. They have to manage their work promotion, charges for their services, marketing, billing, etc. In other words, they are both CEO and worker of their business simultaneously.
Today freelancers are available in almost every sector. The most popular job opportunities that come across for them are particular from the field of software engineering, copywriting, and graphic designing, web development, content writing, and digital marketing. Although freelancers are not considered as employees they do often take contract work from organizations and companies. As there are no fixed standards for how much freelancers can charge so they bid for their work as per their experience and expertise. Remember that freelancers don’t receive any social security, therefore, have to pay out-of-pocket for benefits such as medical coverage, retirement plans, etc. Hence, it won’t be surprising to know that skilled freelancers get paid much more than regular employees.
They are hired by customers and companies who are looking for a specialized skilled workforce for short-term projects. The complete process of communication, payments, and billing, etc. between them and their customers is taken care of by the freelancing network. Unlike gig workers, these independent workers are more in control of their income as they can work on several jobs for multiple clients at one time.
While the former ones are working in the front line of the economy as drivers or delivery personnel, it is the latter ones (freelancers) such as graphic designers or social media marketers who are helping in the expansion of small businesses. Their work profile is different but it is both of them who are contributing in building our economy strong.
Independent contractors are people or corporations which work for or provide their services to another entity as a non-employer. Just like freelancers, independent contractors can work with multiple clients at a time but generally they work with a single company/client under a written or verbal short-term contract for the time being and are paid hourly for their services. They are categorized under the big umbrella of self-employed.
It is not necessary that they work independently, at times they can be placed under contract by a third-party agency that takes care of their billing and payment. In such cases, unlike completely independent contractors they have access to some of the employee benefits. But this generally does not include any paid leave, corporate holidays, or com-off salary. Their job can require them to attend office but often it is remote work. If the service provided by them is up to the mark the contract position can be extended to a potential full-time position.
For example, an independent contractor is hired by an organization for any on-ground work like background verification, security check-ups, warehouse audits or site updates, etc. The contract is liable between the two for 8 months then the company will pay them at regular intervals. In case a third party is involved then the contractor does not have to manage his/her taxes, billing, etc. as the agency takes care of all the things.
There is no doubt that for both freelancers and contractors there is a lot of potential to grow and work in various sectors which helps them gain experience in a short period of time. You can definitely give a kick-start to your career by choosing to be a freelancer or independent contractor.
In temporary employment, workers are only engaged for a limited period of time on project or task-based contracts. Companies hire temporary workers to assist them in meeting business demands and at the same time, it allows them to save money in hiring regular employees. For instance, if any company requires extra workers to work on holidays or busy production days then the most convenient option for them is to onboard new temporary workers which provides them the flexibility to grow massively.
For temp workers it is better to provide their services through a staffing agency as then they are given little more protection as an employee. In most cases, agencies deal within particular fields such as healthcare, IT, accounting, etc. At times agencies have their own network of temp workers who have been working through them for a long period of time.
The difference between gig workers and temp workers lies in the length of their jobs. As for a gig worker, the job may last only for a month as there is no contract but for the other usually, they get to work for at least 6 months. Temp jobs can help you not only gain experience but also let you explore the company culture before you get to make a choice that you want to work there permanently. Working as a temp or gig worker both can be considered good to give a boost to your career and learn new skills.
With globalization and change in the economy, people are getting new employment models to choose from, whether it is being a gig worker, freelancer, independent contractor, or temp worker. It entirely depends on your objective, career goals, work style, and so on. As the traditional employment formats are changing with new norms and better possibilities, it is becoming easier for the workers to find job opportunities.
No matter what you choose to be in the gig sector, at this point in time there is a lot of space to grow and learn. If you want to thrive in this sector then this is the right time to make your first move.