The prediction of another recession is in the air. Since the last time, starting in 2007 with effects lasting to 2010 and later, the gig economy began to flourish. While many workers struggled without employment, some embraced contingent work to help them get by as the financial picture recovered. But some people didn’t leave the gig economy and that could spell trouble for the future. As another recession may happen sooner than we think, how will this affect companies who rely on the contingent labor market?
Increased Supply for Contingent Labor
On the plus side for many companies, a recession will mean more people are vying for fewer contingent labor jobs. That means you’ll have the pick of individuals to fil your needs. But this can be disastrous for those who rely on the gig economy for their income. With more competition for fewer jobs, the struggle will increase.
Gig Economy Deflation
As we’re continuing to look at low unemployment numbers, we still have to prepare ourselves for a potential recession. While there might be more people working in the gig economy, the prices for their services will begin to decrease. More people will be willing to work for less money, which sounds great for companies but could lead to big challenges for the economy.
Economic Impact of Fewer People Working
When fewer people are working, the next impact is on goods and services in general. People will stop buying items that they consider luxuries. Trends like the delivered meal plans or vacations using private rentals may begin to dwindle. This will also start to affect businesses that feel like they are necessities as fewer people working means less money to put back in the economy.
Formation of Gig Worker Coalitions
One possible route for individuals in working in the gig economy is to begin to form coalitions. These may not be exactly akin to unions, but for employers, they may as well be. As employers see gig workers joining these coalitions and asking for better pay, more access to work, and other collective benefits, there may be a reduction of the use of gig employees in the workplace.
Can working with a staffing partner to manage contingent workers improve the outlook?
Anserteam Workforce Solutions represents North America’s very best staffing agencies aligned together to deliver world-class workforce management solutions. We offer end-to-end talent services that can be customized for any size business, utilizing our Managed Services Provider (MSP) model and Vendor Management Solutions (VMS) technology. Is your organization seeking a WBENC-certified diversity partner to provide measurable results and substantial cost savings? Contact us today.