The Gig Economy and Its Implications on Human Resource Management

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A gig economy is a form of the labor market, where an individual operates under freelance-based cooperating or short-term contracts without permanent positions. Since the gig economy is only the beginning of changes in the structure and forms of employment, it is important to systematize the prospects for changes in a changing economy. The question is asking for a definition of the gig economy and its implications on human resource management (HR). The answer is intended to define the term and discuss its overall influence on HR. These changes include the crowding out of workers with artificial intelligence, the development of quick and cheap education, the rise of entrepreneurship, and the change in personal finance. In addition, it should be noted the need to change personnel management technologies in connection with the development of employment in the gig economy. Changes are required in the technology of personnel selection, its adaptation, and motivation, the development of an HR brand.

Gig Economy

The gig economy or the economy of freelance does not yet have an exact definition. Some include only those employees who work on the basis of uber-like services, while others refer to all freelancers or even all employees with additional part-time jobs. In any case, the gig economy encompasses the labor market, characterized by the predominance of short-term contracts or freelance work on permanent jobs, or a work environment that offers flexibility regarding working hours. In the gig economy, instead of regular wages, workers receive money for their short-term work, where an example would be food delivery or a car trip. Employees in the gig economy include couriers or taxi service drivers. Proponents of the gig economy argue that people can benefit from flexible hours due to control over working hours and setting priorities in their lives. In addition, the flexible nature often implies benefits for employers, because they pay when work is in demand, and if there is no demand, they do not bear personnel costs.

The gig economy as a new model of precarious work is characterized by an ever-increasing emphasis on underemployment, the transfer of labor relations to a lower wage bill, for example, when freelancers or crowdsourcing volunteers are used free of charge to develop socially significant and commercial projects. This model is attractive for employers, as it opens up new opportunities for reducing personnel costs, maintaining office space, reducing the amount of work involved in maintaining payroll settlements, and supporting many processes in the system of contractual relations between employer and employee (Burtch et al., 2018). Thus, the most popular projects for collaborative online work are projects related to the development of open-source software products.

HR Implications

The gig economy can have drastic implications on human resource management due to an overall increase in the dynamics of the labor market. The trading area is quite profitable and shows investors that replacing workers with freelancers or other technologies is a profitable goal. Although the need for everyday and unskilled manual labor will decrease sharply, these same studies show that the demand for creative activities that require imagination and human intelligence will increase, which partially compensates for unemployment. Artists, executives, entrepreneurs, and customer service specialists will become more in demand on the market due to the inability to automate these sectors. With the development of the gig economy, changes in the labor market will be forced, because of which it will become necessary to accelerate the pace of training, especially in the technical field. The days have passed when everyone could get some technical skills and earn the same thing all their lives. Job seekers will have to qualify in new areas for them in a short period of time. Thus, the concept of a master of one thing will disappear.

The main ramification of the gig economy is the fact that HR managers will need to be able to provide quick and effective training for their short-term freelance contractors. The overall process must take a small number of resources and time in order to fully enable efficiency. Such an approach to education can be implemented only with cheaper, faster, and more flexible training. In the gig economy, it might make no sense to expect that a certain amount of money spent thorough training and qualification improvements will pay off because after such as investment, this training will no longer be relevant. Maintaining local employees will depend entirely on their ability to provide flexible training and on the willingness of employers to organize courses and training that give employees the required knowledge and the development of relevant skills.

Entrepreneurship is inextricably linked to the labor market and lifelong learning. At a time when more and more work is being automated, the level of employment is unstable, and work for qualified personnel is disappearing, the value of those who have truly human qualities – imagination, wisdom, leadership, and essential values ​​is growing. In other words, the role of HR will shift from adhering to old practices to cooperating with dynamically changing the highly entrepreneurial labor market.


In conclusion, the gig economy is an evolution of the labor market, where employers are no longer obliged to keep workers and employees operating on a short-term basis. In other words, a freelance economy allows people to trade independence and freedom for stability and certainty. These changes have major implications in the HR management field, where human resource managers need to adapt to the given trends by adhering to efficient and cheap training. In addition, HR needs to be able to perceive freelancers as a mix of entrepreneurs and short-term contractors due to the dynamic nature of the gig economy.

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BusinessEssay. "The Gig Economy and Its Implications on Human Resource Management." December 1, 2022.