The “gig economy” is a topic we have been covering extensively here at the nextSource blog. The mushrooming growth of this new labor type represents a brave new world, both for individuals in the labor force as well as those professionals tasked with contingent workforce management. As with any new emerging business practice, it takes some time for legal and regulatory strictures to catch and come up to speed with the velocity of the changes wrought by disruptive innovations. In the interim, there is often increased risk for all who embrace the mantle of early adoption.
One way workers and employers alike can protect themselves is to attain greater understanding of the new paradigm and this begins at the most basic level with proper definitions in terms. This post will clarify some of the emerging terminology that has grown out of the rise of the gig economy and which many people tend to bandy about interchangeably (and often incorrectly). These distinctions matter and delineating between them can save worker and employer alike from risk and potential pain. Without further ado, here’s the new lexicon of the gig economy.
Gig Economy | Sometimes also referred to as “on-demand economy” or the “sharing economy,” the gig economy refers to various forms of small project or freelance work of limited duration. There are several definitions of what constitutes a gig economy job. More narrowly defined, the gig economy worker takes on small, short-term project work sourced via online sites in the “human cloud” (see human cloud definition below). The more inclusive definition of gig economy (and the one nextSource endorses) includes most types of contingent labor opportunities as “gig work” including opportunities sourced both online and offline.
Human Cloud | With so much of the opportunity for gig work being advertised and sourced online via an array of applications and services, the term Human Cloud refers to the ecosystem of labor and talent available for sourcing completely in the cyber space. There are a number of distinct channels through which to source talent via the human cloud. SIA defines three main human cloud platform models as crowdsourcing, online work services and online staffing platforms. As a whole, this ecosystem of platforms is referred to as the human cloud. More detailed definitions of each of these three models to follow.
Online Staffing Platforms | This segment of the human cloud connects workers with employers and supports the virtual administration of the employer/employee relationship with all the regulatory, tax and legal requirements this relationship involves. Just fully over the internet and by remote. Online staffing can also include freelance management systems (FMS) geared toward automated management of freelancers and just-in-time staffing (JITS) companies that act as web/phone enabled staffing supplementation companies.
Online Work Services | Online work services are online platforms that deliver access to workers in specialized services. Think transportation (like Uber or Lyft), translation services, copy writing, data entry and others. Across these platforms, a client isn’t hiring a worker, they’re purchasing an outcome or finished product.
Crowdsourcing | Another element of the human cloud, crowdsourcing is the process of submitting a larger project to an online platform where the task is then broken into numerous component elements which are offered to a broad pool of available gig workers. As individual elements are completed by a disparate group of workers, the customer is again purchasing an outcome or finished product, but not directly employing any of the labor utilized. This practice is often useful for organizations without the bandwidth to engage/hire a team to execute a complex project or task levelling the field to a large degree between SMBs and Tier 1 enterprises.
Sharing Economy | The sharing economy is best personified by online applications like AirBnB, Vacation Rental By Owner (VRBO), ZipCar and others wherein the owner of an asset (like a motor vehicle, or an apartment) can monetize the utilization of that asset when they’re not engaging its use for themselves. Whether a commercial enterprise (like ZipCar which owns the fleet of vehicles they “share” with customers for a daily rate) or a private individual sharing their spare room or duplex as a hotel room, the sharing economy is powered by online platforms that connect customers to service providers.
For a more detailed and penetrating look at the multi-faceted gig economy, visit this link to the SIA’s publication, “The Gig Economy and Human Cloud Landscape.” You must be an SIA member to download the document.