Eight challenges of the gig economy—and how to fix them with ShiftPixy

If you’re thinking about joining the gig economy as an independent contractor or business owner, here are two things you should know:

• 35% of the U.S. workforce makes their living one gig at a time

• That number is expected to grow to 43% by 2020

In other words, the gig economy is the future of labor. Workers enjoy the flexibility and freedom to make their own schedules by simply accessing a smartphone app, while businesses can tap into a wide network of part-time employees when they need them.

But like any major movement, the gig economy has to go through some growing pains before it reaches its full potential.

While it offers major benefits to 1099 employees and business owners, there are kinks that still need to be worked out. Here are eight challenges of the gig economy, and more importantly—ShiftPixy’s solutions for solving them.

Gig economy challenges for workers

1. It’s hard to find consistent work

As a gig worker, you get to choose when you want to work, and depending on the gig, determine your own hours. Unlike tedious 9-to-5 desk jobs, there are no repetitive tasks or boring cubicles. The work is new, different, and on your terms.

However, the other side of this coin is that gig work isn’t always consistent. You hope you can find your next job, but you’re never quite sure when it’s going to be. If you drive for a ride-share company like Uber or Lyft, you have more control, but what if you’re a restaurant worker? This uncertainty can be stressful.

Solution: Don’t just rely on word of mouth to keep you employed. ShiftPixy is a gig app that connects you to employers seeking restaurant and hospitality workers just like you.

2. Workers lack protection

What happens if you injure yourself on the job? As an independent contractor, you may not have the same kinds of rights as full-time employees. There is no workers’ compensation if you need to stop working while you heal. In fact, it may be difficult to find any work during this time.

As the laws around the gig economy become more refined, you may start to receive increased protection. But what do you do in the meantime?

Solution: When you find gigs through ShiftPixy, eligible employees get access to workers’ compensation benefits, and maintain peace of mind with their part-time employment.

3. You have to find your own health insurance

The Affordable Care Act created a marketplace for individuals who don’t have an employer-sponsored plan, e.g., most workers who solely rely on the gig economy. The problem is purchasing your own health insurance can be complicated, and while it may be cheaper than before the ACA, it is often more expensive than workplace plans.

Solution: ShiftPixy’s platform gives eligible workers health insurance so that you can get the care you need without compromising your gig lifestyle.

4. No retirement account

The gig economy is ideal for maintaining a positive work-life balance, but it may be less than perfect for independent contractors who want to build a nest egg for retirement.

Unlike businesses that offer full-time employees 401(K) plans, part-time jobs typically don’t provide this kind of long-term security. It’s a challenge for anyone who loves creating their own schedule and wants to maintain this way of working in the future.

Solution: You don’t necessarily have to give up the gig work that you love to save for retirement. ShiftPixy provides security by letting you contribute to a long-term savings plan.

5. Competition is growing all the time

It’s a testament to the gig economy’s long-term viability that more and more businesses are participating in it year after year. The problem, of course, is that more businesses mean more competition for you.

As a small to medium size company, it’s tough to stand out when you’re limited by a seemingly small pool of part-time employees from whom to choose. How do you find qualified workers who you can rely on?

Solution: ShiftPixy lets you compete with other part-time reliant businesses by connecting you with vetted applicants while allowing you to build a bench of regular workers.

6. Restaurants lose money on delivery

Many restaurants rely on third-party vendors for delivery services. Using gig workers, these vendors assume the work of processing and delivering orders for your customers.

On the face of it, this seems like a smart solution. But any restaurant operator who uses third-party delivery has become all too aware of the drawbacks. Not only do you turn over your brand to someone outside of your company, you give up a portion of your profits as well.

Solution: Try self-delivery instead. With ShiftPixy, you can use your own part-time employees, protect your brand and save money.

7. Compliance is a headache

The gig economy presents some unique challenges for human capital management. Keeping up with the changing laws surrounding independent contractors, and trying to figure out compliance with the Affordable Care Act’s requirements are just a few issues that businesses must face. Plus, you have to dedicate precious time and resources to managing these administrative tasks.

Solution: Let ShiftPixy handle it. Our platform keeps you compliant with all laws and covers burdensome duties so you can focus on other pressing matters.

8. It’s hard to fill shifts in a timely manner

When you rely on gig workers, you replace traditional scheduling with shift scheduling, i.e., filling individual slots as needed. This method works great as long as you know where to find employees when you need them. But without a designated resource, you may struggle to connect with a shift worker to cover a last-minute opening.

Solution: ShiftPixy helps you find available employees—at any time. Our network matches your criteria with workers who are ready to help.