New Downsides to the Gig Economy?

An interesting new article in Strategy+Business examines another potential downside of the gig economy.  It seems that many business sectors operate with business models that are not well suited to the independent workforce.  The article examines recent trends in the trucking industry, where annual turnover exceeds a whopping 81 percent!  Why are so many truckers leaving their positions?  Because their jobs often suck!  Some trucking firms have embraced the independent workforce because it allows them to pay less, ask for more work, and avoid cost burdens like retirement or health care benefits.  But, as the high turnover rates suggest, there is no free lunch and many truckers have had enough.   The gig economy can generate many benefits for firms and for workers, but there needs to be a fair exchange as well.

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The trucking industry is something of a canary in a coal mine. You can see similar challenges emerging in other sectors, especially in manufacturing where the independent workforce accounts for more than 20% of all workers.    We often hear employers complain of skill shortages that make it tough to fill jobs.  However, in some cases, these production jobs are tough to fill because they offer low pay, few benefits, and limited career advancement options.   Check out the latest issue of Business Week to see some of the safety issues around new auto manufacturing jobs.  Independent work can be a boon for all—it provides flexibility for workers and for companies.  But, it can’t be an excuse for exploitation.  If we want this new way of working to succeed, companies and industries will need to devise new business models that offer a better deal to independent workers.