What’s the impact of the ‘gig economy’ on IT contractors?



What’s the impact of the ‘gig economy’ on IT contractors? 18th October 2016

This is the second in a series of articles about the ‘gig economy’. In this post, we examine whether it might have an impact on contractors and freelance IT experts. Will it confer new rights and respect for the freelance community, or increase competition and reduce day rates?

There was already a steady increase in the number of self-employed people in the UK long before the term ‘gig economy’ was created. During the financial crisis of 2009, many people preferred self-employment to unemployment… and some have never turned back.

Self-employed workers now account for 15% of the UK workforce*, and many commentators expect that figure to rise sharply in the next five years. But in addition, there are people who have permanent jobs that work on gig projects in the evening/weekends to supplement their income.

The figure for these ‘part-time gigsters’ is more difficult to calculate. But a reputable report from McKinsey & Company** suggests the gig economy could add $2.7 trillion to global GDP by 2025. That’s a lot of gig economy workers.

So who are the winners and losers in this brave new world?

As the number of gig economy workers rise, whether full-time or part-time, so their political power increases

The gig economy winners

Self-employed, contractors, freelancers and gigsters are all terms used to describe the same thing – independent workers. As the number of gig economy workers rise, whether full-time or part-time, so their political power increases – and new rights won for the gig economy will benefit IT contractors and Microsoft freelance experts.

Every UK independent worker has the right to vote in a General Election, and as the numbers grow to 20%, 25%, 30% or 35% of the UK workforce, so MPs and the Government will be keen to listen to their demands.

Theresa May has already appointed Matthew Taylor, an ex-head of the Number 10 Policy Unit, to review legal rights for those people working in the gig economy. Could a national minimum wage be on the cards for independent workers along with other benefits?

As independent workers start to form a larger part of an organisation’s workforce so their reliance on these freelance experts increases. This could result in greater respect for the value of IT contractors, and that could translate into higher day rates as their expertise is recognised (and their bargaining power strengthens).

The gig economy losers

The new digital work platforms (PeoplePerHour, UpWork, TaskRabbit, etc) put organisations in touch with independent workers. Fast, efficient and global, they have boosted the gig economy world-wide.

It’s the global aspect that could be a problem. For example, UK IT experts could see themselves constantly out-bid by independent workers in the Philippines or India, etc. It’s happening today. The only constraints on the volume are co-ordination, management and time-zones of overseas workers.

Many companies are not able to accommodate large numbers of independent staff into their workforce, but that will change. As company systems and operations evolve, so they will become more efficient in the deployment of IT freelancers – and that could result in shorter contracts.

Depending on circumstances and life-stage, independent or freelance work may not always be ideal for workers. But in the future, permanent work in IT may not be widely available. IT contractors must be honest with themselves about their own ability and expertise – top experts will get top day rates, but average experts will get less-than-average rates.

This post is part of a series about the gig economy and its impact on IT talent acquisition. Other posts have examined the question ‘What’s the impact of the gig economy on Recruitment Departments?’ and ‘What’s the impact of the gig economy on IT Departments?‘.


* Office of National Statistics (May-July 2009) total employed in the UK was 29m, of which 13% were self-employed. In May-July 2016 the total employed was 31.7m, of which 15% were self-employed.

** Connecting talent with opportunity in the digital age, McKinsey & Company

Graham Smith

Author: Graham Smith

An award-winning, Marketing Director with over 25 years’ experience in direct marketing (including digital marketing, social media, marketing automation and direct mail)… the full B2B marketing mix.
A qualified member of the Chartered Institute of Marketing (CIM) and Institute of Direct & Digital Marketing (IDM), Graham is also part of the ‘GDPR Working Party’ at the Direct Marketing Association (DMA) and was a Council member at the DMA for 3 years.

The views expressed are those of the author and do not necessarily reflect the view and opinion of Curo Talent.

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