Employers Are Getting in on the Gig Economy

From Full-Time to Gig Time

It’s no secret the workforce landscape is undergoing major changes, as US workers gravitate away from traditional employment norms and toward contract jobs and remote work. But recent data suggests it’s not only employees making these changes. Employers might be gravitating away from the 9-to-5, too.

Over the past few years, an increasing number of employers have shifted away from hiring full-time employees and toward temporary staff, independent contractors, and outsourced talent.

According to McKinsey, this trend has led to independent workers representing 36% of the workforce, up from 27% just a few years ago in 2016. And a separate survey from payroll startup Gusto finds the ratio of contractors to employees at an average company is 1:5 — up 63% from 2019.

Dollar Signs Over Desk Chairs

So why are employers moving away from W-2s and toward 1040s?

One reason might be the cost-cutting benefits associated with a remote, more fluid workforce. By expanding their search across borders, employers can access a wider and often cheaper pool of talent.

Plus, they trim costs associated with a full-time, in-office workforce. This includes benefits like healthcare and pensions, not to mention everything from printer paper to cups of coffee.

Gig Is Good?

The American office is not just going remote — it’s going gig. Employers and employees alike seem to be taking on these more flexible working arrangements. But the latter may be more exposed to the risks, such as lack of job security and benefits.

So are workers being forced into independent work due to a lack of full-time jobs, or are they willingly embracing the gig life?

On one hand, the proportion of those turning to contract work primarily to meet “basic family needs” increased from 14% in 2016 to 26% in 2022, according to McKinsey. But on the flip side, a quarter of workers cited the freedom and flexibility of gig work as the main reason they chose it, while another quarter said they simply enjoy the work.

With both employers and employees embracing new working arrangements, they may need to find common ground to ensure workers’ well-being is looked after in the gig economy as well.

Looking for more stories like this? Check out On the Money — SoFi’s one-stop-shop for news, trends, and tips!

Check it out

Please understand that this information provided is general in nature and shouldn’t be construed as a recommendation or solicitation of any products offered by SoFi’s affiliates and subsidiaries. In addition, this information is by no means meant to provide investment or financial advice, nor is it intended to serve as the basis for any investment decision or recommendation to buy or sell any asset. Keep in mind that investing involves risk, and past performance of an asset never guarantees future results or returns. It’s important for investors to consider their specific financial needs, goals, and risk profile before making an investment decision. 
No brands or products mentioned are affiliated with SoFi, nor do they endorse or sponsor this content. 
Communication of SoFi Wealth LLC an SEC Registered Investment Advisor
SoFi isn’t recommending and is not affiliated with the brands or companies displayed. Brands displayed neither endorse or sponsor this article. Third party trademarks and service marks referenced are property of their respective owners. 
SOSS23062802