Welcome back to another episode of DID YOU KNOW? – Where we breakdown everything business and finance simply for SMEs to understand. This week we take a continued look at human capital the very life-blood of any business that is looking to grow, whether it is increasing sales, brand awareness, and social responsibility to maintain respect, loyalty, and transparency in their community.
- Outsourcing vs Offshoring
- Gig Economy vs Sharing Economy
- of Labour
Introduction
The fourth industrial revolution is playing a huge factor in the South African labour market thanks to the advancement of online platforms that can connect customers with brands as well as shape the way those brands tell their stories to gain a bigger piece of the market. In part 2 of this miniseries, we look at the two main driving forces that have made freelancing, social media marketing agencies and online developers become the new normal and if you have not read Part 1, we suggest you take the time to do so.
Gig Economy
A brief history – Since 2009, “gig economy” has referred to part-time freelance work, but the start of the gig economy starts back in 1915, when jazz musicians coined the term “gig” to refer to performances whereby individuals have greater work flexibility but without the benefits of the employed, such as healthcare, pensions and paid holidays.
What is it? – Gig workers are independent contractors, online platform workers, contract firm workers, on-call workers, and temporary workers. Gig workers enter into formal agreements with on-demand companies to provide services to the company’s clients.
How does it Work? – The gig economy involves the exchange of labour for money between individuals or companies via digital platforms that actively facilitate matching between providers and customers, on a short-term and payment by task basis.
The Advantages?
- Flexibility
- Lower Overheads
- Greater Independence
- Variety of Jobs
- Better Pay
The Disadvantages?
- No Benefits
- Isolation, Lack of Cultural Solidarity
- More Stress
- Less Reliable Workers
- Tighter Contractual Compliance
Conclusion: The gig economy has so many overlapping parts that it is sometimes used interchangeably with the shared economy but we can say this about the gig economy, it is more volatile when it comes to finding your next gig as well as the onus is on you to find the gig for yourself, so as a small business owner remember to always do your homework before using gig workers.
Sharing Economy
A brief history – Launched in 1995, eBay was one of the first enablers of the sharing economy since it provided a global online marketplace where anyone could purchase or sell just about any kind of item. Communities of people have shared the use of assets for thousands of years, but the advent of the Internet and its use of big data has made it easier for asset owners and those seeking to use those assets to find each other.
What is it? – The sharing economy is an economic model defined as a peer-to-peer (P2P) based activity of acquiring, providing, or sharing access to goods and services that is often facilitated by a community-based online platform.
How does it Work? – Sharing economies allow individuals and groups to make money from underused assets. In a sharing economy, idle assets such as parked cars and spare bedrooms can be rented out when not in use. In this way, physical assets are shared as services. For example, car-sharing services like Uber can help illustrate this idea. According to data provided by the Brookings Institute, private vehicles go unused for 95% of their lifetime.
The Advantages?
- Cheaper Products and Services
- Additional Income
- Fresh and Great Deals
- Spirit of Solidarity
The Disadvantages?
- Financial Volatility
- Lack of Warranty
- 3rd Party Dependence
- Market Intervention
Conclusion: The sharing economy is an overlapping part of the digital economy that small business owners should be more comfortable using as this can be seen as a more stable industry due in part to it being backed by internationally recognised companies blazing a trail of trendy but simple ideas to make it more accessible for the average man and woman on the street.
And that is a rap for part 2 of our three-part miniseries highlighting when a small business can find Human Capital for their brand. There is no shortage of freelancer work out there to tap into but the real challenge is to find the right person (s) that can understand the needs and execute them on behalf of the business. Next, we are looking at how the labour market is governed to protect the employee and employer of their rights. We recommend you read part 1 of this miniseries to gain perspective of how we believe it will work in the not so distant future so stay tuned for the next chapter of our amazing in-depth miniseries.
Yvette Pugin
Contributor
A force to be reckoned with: Qualified Senior Bookkeeper with 40 years experience in Administration, both in Corporate and the SME space. Having started working in the 1980’s when computers were still a dream; her experience was gained with manual systems. After working with SME Suppliers in the corporate environment, it became apparent that there is a need for not only education, but system management for SME’s.