Three ways the gig economy is affecting tech
It’s not hard to see the how the gig economy has changed the way each of us operates. After all, it’s transformed how we complete all kinds of tasks – whether it’s booking hotels through Airbnb, hailing a taxi through Uber, or something else entirely.
It comes as no surprise that the gig economy has also significantly impacted the labour market. Nowadays, the self-employed make up around 15% of the UK workforce. It seems like the freelance dream of higher pay and more flexible working has rapidly become reality for many people.
Recruiting tech talent is no different. Gig working and digital platforms have made it very easy for tech professionals to go freelance and for employers to tap into global talent. Let’s focus in on three ways the gig economy has impacted tech employers:
1. Pay is increasing
The gig economy has opened up a wealth of new opportunities for individuals with in-demand skills. Their skills are highly sought after, so they can demand a premium pay packet – and have their pick of projects too.
That was one of the findings in the latest Tech Cities Job Watch report, which revealed that average IT contractor day rates soared by 9.11% over the past year. That is almost double the year-on-year growth permanent salaries achieved.
Instinct might tell you that this trend is negative for employers. However, that’s not necessarily the case. While tech employers face larger payrolls, they can save money on capital costs and employee benefits by recruiting a contractor. However, for maximum success, they ought to do so the support and compliance of a strong IT recruiter.
2. Employer demand for contractors is on the up
With so many in-demand tech professionals going freelance, it’s unsurprising that employer demand for contractors is increasing. Our research found that employer demand for contractors has grown by 2.23% in the last year; outstripping demand for permanent workers during the same period.
This isn’t necessarily a bad thing. Contractors provide businesses with flexibility, a fresh perspective and unique skills. These benefits cannot be understated, particularly as businesses attempt to move their IT department from a service provision role to one of strategic involvement.
However, forward-thinking companies aren’t relying on contractors to deliver all of their interesting digital initiatives. Instead, they’re using contractors to train their permanent workforce. Doing so will make them better equipped in the long-term to meet strategic business objectives.
3. The gig economy is influencing the skills gap
As a result of many in-demand tech professionals starting to freelance, employers increasingly need to turn to the contractor market to plug their skills gap. In fact, 28% of employers think they need to employ a fully contingent workforce, if they’re going to achieve tech transformation.
Most importantly, the gig economy is widening the gap between the “Haves” (those people who possess in-demand skills) and the “Have Nots” (people with low or outdated skills). The “Haves” have a wealth of opportunities at their fingertips. Opportunities will decline for the “Have Nots”, as that kind of work is simplified or automated. As a result, learning and skills development is essential, to prevent this gap widening any further.
Read more in Experis’ Tech Cities Job Watch Q2 2016 report.
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