4 gig economy trends that are radically transforming the US job market

Key Points
  • The gig economy is now composed of 60 million workers, and it is now an ever bigger slice of the American workforce.
  • By 2027 the majority of workers in the U.S. will be contract workers.
  • The rise is owed to these four trends: blockchain systems, F500 utilizing more contract employees, an uptick in fully remote companies and more robust networking among freelancers.

No matter what they're called — freelancers, independent contractors or flex workers — the folks who make up the gig economy now total nearly 60 million, and they are becoming an ever bigger slice of the American workforce.

In fact, a recent survey commissioned by online freelancing platform Upwork and Freelancers Union shows that the freelance workforce is growing three times faster than the overall U.S. workforce and that the majority of people will be working independently by 2027

This change has major implications for how the American workforce will look in the years ahead, the role corporations will play in this new landscape, and the technologies that are helping to drive the marketplace shift.

Below are four of the biggest changes impacting the gig economy and how they're set to transform the way we work.

1. Transparency through blockchain

It may have gained notoriety as the technology that provides the infrastructure for bitcoin, but blockchain is poised to play a bigger and more important role for gig workers in the years ahead. That's because blockchain systems — the decentralized technology that underpins bitcoin and other cryptocurrencies by enabling secure peer-to-peer transfer of value — offer the possibility for each of us to become free agents.

This is happening on two fronts, explains Bill Carmody, CEO of Trepoint, a New York-based digital marketing firm. First off, blockchain enables all parties involved — the gig worker and the client — to see what work was done and by whom. So, for instance, if a freelancer contributes to a project for a client, his or her specific contribution to that project is noted on the blockchain. This not only helps independent workers verify the skills and talents they're promoting but also gives companies an easier way to assemble the best teams of contract workers.

"When you connect transparency to the gig economy, you can really see where the value is coming from," Carmody said.

Blockchain also enables faster and more reliable payments. Today freelancers run the risk of being paid late, or not at all, for work they've completed, he said, adding, "With blockchain that's not possible. As the intellectual property shifts from the freelancer to the client, he or she is going to automatically receive payment as per the terms of the agreement. There's no way to shortcut that, which makes blockchain contracts much more valuable for gig workers."

2. Big corporations use more freelancers

Independent contractors and freelancers were once found mainly among cash-strapped start-ups and smaller companies. Not anymore. Fortune 500 companies are increasingly shifting noncore jobs, such as marketing, human resources and procurement, to gig workers in order to focus on the things they do best, like manufacture products or sell services.

In his new book, "Temp: How American Work, American Business, and the American Dream Became Temporary," Cornell University industrial labor relations associate professor Louis Hyman argues that it's not technology that's driving this shift but rather the companies themselves.

More from At Work:

Silicon Valley's dirty secret: Using contract employees to drive profits

Nix the C-suite, soon blockchain will let free agents run companies

"Corporations have the choice of how to organize, and they're increasingly choosing to use gig workers to be lean and control costs," Hyman said. A workforce comprised of free agents can be more adaptable to shifting economic conditions by reducing the number of workers when times are slow and adding more when demand is greater. In fact, Upwork claims that more than 30 percent of Fortune 500 companies are using its site. As these giant companies — FedEx, Bank of America and Verizon among them — turn more work over to freelancers, it creates additional opportunities for gig workers.

3. An uptick in fully remote companies

Remote workers have been part of the landscape for well over a decade now. What's more recent, and expected to grow, are fully remote companies. According to FlexJobs, an online platform specializing in remote and flexible employment, there are approximately 170 virtual companies operating in the United States, up from 26 in 2014. Among the largest are Automattic, AnswerConnect, InVision and Toptal.

These companies have no central headquarters to speak of, and the majority of their staff works remotely — from home, a shared office space or even the local coffee shop. And tools such as Slack, Zoom, Dropbox and Quip, a document-sharing and -editing platform, make it possible to communicate with far-flung employees and track their performance and workflow more accurately.

The other trait these fully remote companies share: the ability to attract talent from anywhere in the world. For instance, since its start in 2010, Toptal has been able to find the people and skills it needs from all over the globe. Today its more than 400 core employees work in 60 different countries.

That's good news for gig workers, said Trinia Hoefling, author of "Working Virtually: Transforming the Mobile Workplace" (2nd edition). No longer are they constrained by their location; they can access opportunities that fit their skills and interests anywhere in the world.

4. More robust networking among freelancers

Along with major companies utilizing gig workers for an increasing number of noncore tasks, there will be growing networks and platforms forming that will tie these independent workers together. This will enable them to share contacts, leads and share their work with potential clients and other freelancers.

Carmody said blockchain will play a role in this development by making it possible to see who has done what specific work. "There is a lot of bifurcation today between what content is out there in the marketplace and who has created that content," he said. Blockchain, with its public ledger, allows all parties to see exactly who created what content.

"Yes, gig workers are always going to be hustling for their next job, and networks will remain critically important," Carmody added. "But now there is a secondary network through blockchain that makes it a lot easier to find and connect with people you don't know but whose work you admire."