October 26, 2016
Yet Another Research Report On The Gig Economy
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Albert Einstein once said, "If we knew what we were doing we wouldn't call it research." How fitting in this case. Yet another report came out this week estimating the size of the gig economy. Pymnts.com released their research http://www.pymnts.com/gig-economy/2016/gig-economy-growing/ done in conjunction with Hyperwallet, which attempts to define the the size of the independent work marketplace.
This is on the heels of the recent McKinsey Global Institute (MGI) study, "Independent Work: Choice Necessity and the Gig Economy."http://www.mckinsey.com/global-themes/employment-and-growth/independent-work-choice-necessity-and-the-gig-economy. In that comprehensive report, the authors had a significant disclaimer about the problem of data collection in this area. The annual contingent labor study done by the Department of Labor was discontinued in 2005, so there are no government statistics about participation. Various entities, including companies in the space, academics and think tanks, have launched efforts to explore the subject. So there is no dearth of data about the gig economy, the problem is each study has been done with a slightly different approach. In fact the MGI study even included a great graph comparing the size estimates emerging from these disparate research projects. It tried to isolate the specific industry segment which was being addressed by the researchers. For example, it listed 5 different studies, including their own, that sized the independent workforce in the US as a percentage of the working population. The results were broad ranging, from as little as 16% to as high as 27%.
So given that the numbers don't quite jive, who is right? Since I am working on my new book, Thriving in the Gig Economy, I have been wrestling with this issue quite a bit. I have decided that potentially they are all right; you just need to be cognizant of how they have framed the question. MBO Partners, for example , provides the best ( and only) historical perspective, having issued its report on the State of Independence in America for each of the last 6 years. https://www.mbopartners.com/state-of-independence/mbo-partners-state-of-independence-in-america-2016. They focus on independent consultants in the professional services space and estimate the market size at just south of 40 million participants. They define 3 primary categories of independents: full time, part time and occasional. MGI, on the other hand, has a higher size estimate based on four categories of workers, including two groups, who are working in this way out of financial pressure rather than personal choice. They include some categories of workers, like doctors and therapists, who may or may not be captured in the MBO Partners data.
One area that has very limited data available is the use of digital talent platforms by gig workers. The new PYMNTS report is targeted specifically at this. In fact, they specifically don't include the group of "freelancers" who may get their work from intermediaries, like M Squared Consulting http://www.msquared.com or Business Talent Group. https://businesstalentgroup.com/business-strategy-consulting-google/?gclid=CLLwv-vy-c8CFUKTfgod6t8HGA. Given the exclusion of this key population, the graph which showed the type of professional services procured through the digital talent marketplaces was telling. The professional service in the highest demand was photography. The senior level independent consultants do not appear to be represented. I have yet to comprehensively go through this report, so I can't speak to conclusions the authors may have reached. Perhaps there will be more to come on this in the future. At the very least, there may be more to come in my book.
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