What’s Driving the Growth of the Gig Economy?

What’s Driving the Growth of the Gig Economy?

The gig economy (also known as the free agent economy) encompasses any type of work in which talent is paid for a discrete task, project, or period of time. Largely powered by digital labor platforms, the gig economy has evolved along with the increasing need for on-demand solutions for work to be delivered and innovative approaches to talent and skill shortages.

Our newest report, From Workforce to Workfit, reveals there are 50 million free agents in the U.S., constituting 33% of the workforce—up from  31% in 2015. Globally, 31% of the workforce are gig workers.


Outside research backs up Kelly’s findings. In October 2017, Edelman and Upwork released Freelancing in America: 2017, and they estimate 57.3 million people freelanced this year, adding that “the majority of the U.S. workforce will be freelancers by 2027.”

The Organizational Perspective

This growth is occurring because it’s a good arrangement for both workers and the organizations that engage them. In fact, 65% of talent managers globally say they currently use gig talent. What are their primary motivations?

There are many reasons why this is occurring, ranging from the tactical to the strategic. Some of the tactical motivations include the following:

  • Lower labor costs: Of those talent managers using gig talent, 43% report at least a 20% labor cost savings.
  • Filling the skills gap: Recent research from McKinsey reveals almost 40% of companies have trouble finding talent to fill the skills they need. Free agents offer opportunity to leverage talent in hard-to-hire areas like IT, engineering, digital marketing, and design.
  • Timing: Talent managers find it’s faster to onboard gig workers than full time employees, and it’s easier to lock in outside resources.

However, sophisticated talent managers realize there are even better reasons to use gig workers, such as these:

  • Infusion of talent: Gig workers tend to have a wider range of experiences to draw from. 75% of talent managers agree that gig work affords individuals the opportunity to build their skills through diverse project work across multiple industries and organizations.

As one VP from a multinational technology company told us, “The knowledge transfer that occurs as a natural outcome of working alongside internal resources benefits the project, the employee, and the organization.”

  • Improvement of solutions offerings: Gig workers accelerate product development and enhance customer relationships.
  • Extending your reach: By increasing your network to include gig workers and employees, you can begin to build brand awareness across a wider geography.

The Gig Worker Perspective

Not only do organizations benefit from using gig workers; the arrangement serves talent as well:

  • Choice: 75% of gig workers work as free agents by choice. These workers are often highly skilled, educated and committed, and they choose free agency for positive reasons such as personal empowerment and career opportunities. Demographic shifts, rapid technological advancement, and “the rise of the workers’ influence” in an increasingly flexible workplace are driving a reimagined relationship for individuals between their work and the rest of their life.
  • Flexibility: 64% of global free agents choose free agency because it affords them the ability to integrate their work around and into their life. The best talent is seeking greater control and ownership over how they manage their work, their personal lives, and their passions (which sometimes is their work). With this shift in the way that the world wants to work, careers built on flexibility continue to gain ground. 71% of talent managers believe this structure allows individuals to have more opportunities/choices of work, and 72% believe that free agents are committed to their careers or work. 

We expect the gig economy to continue to grow because there are several tailwinds ushering in this new format of work—including the need to adapt quickly while keeping costs in check, addressing critical skills gaps, leveraging technological advancements, and satisfying the work preferences of a new demographic mix of the talented individuals needed to perform work.

Want to learn more about making the most of gig workers? Download the entire report for the latest gig economy trends and the solutions Kelly offers to help you engage the gig economy.