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How the gig economy is reshaping the IT enterprise

Freelance work results in less IT project failure and greater productivity, a Constellation Research report found.

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The gig economy is taking over the enterprise as more employees opt for a more flexible work structure. However, this type of work is also proving to be invaluable for big and small organizations, a Constellation Research report found. 

SEE: Top 100+ tips for telecommuters and managers (free PDF) (TechRepublic)

Constellation’s latest report, released on Tuesday, examined the efficacy and current state of the gig economy. The data found that gig jobs are no longer limited to lower-paying work performed on demand, such as Uber and Lyft ride-hailing services; organizations of all sizes, particularly in IT, are also taking advantage of valuable employees. 

Gig work in the white-collar world has seen a marked increase in the past couple of years. The majority (72%) of all gig projects worldwide were in large enterprise and professional services firms between 2018 and 2019, a jump from 52% two years earlier, FlexingIT data found. 

“Companies have always valued the ability to increase capacity without increasing costs,” said Chris Keene, CEO of Gigster. “You have your staff, which is critical, but sometimes you need to build a big project or get a big deliverable and  you don’t necessarily want to build up your cost structure for that peak demand.”

This growth is a result of employees’ interest in flexible careers, as well as businesses’ desire for convenience and efficiency, the Constellation Research report found. With that in mind, the number of contractors, outsourcing teams, freelancers, and gig workers are projected to triple in the US to 42 million workers in 2020, according to Deloitte. 

Benefits of gig work for employees 

Employees of all ages and backgrounds can benefit from the gig economy. This type of work allows individuals to create a portfolio of projects, building their resume to appeal to more employers.  

The gig economy creates a climate of meritocracy because many platforms exist that allow freelance workers to be rated and ranked on performance. Office spaces and traditional jobs don’t typically offer that type of transparent, detailed feedback. This process allows for success and work to depend solely on performance and merit, rather than outside factors and bias, according to the report. 

Gig work provides a bevy of other benefits for professionals. The project-to-project type of approach allows employees to work on tasks for multiple companies simultaneously, both increasing their skill sets and exposing them to more opportunities. 

This type of work also gives the worker more independence and freedom to choose when and where they want to operate. Gig workers also have less risk of job and income loss with multiple employers and can even sometimes earn more while working less than full-time equivalent counterparts.  

A driving force in the gig economy is efficiency, allowing employees to work in an agile way, Keene said. 

“Imagine you built a building like [a traditional, full-time office staff.  You have a building and everybody you ever wanted to work on that building is just going to sit there,” Keene said. “The electrician sitting there for some six months until there is something to do electrical work on? 

“That sounds a little bit outrageous, but that is the way companies have staffed,” Keene added. 

Gig work allows employees to work when there is work, and to have free time when there is not, promoting a better work-life balance and more effective time management. This workstyle has also proved to produce higher job and career satisfaction for employees, the report found, since employees can apply for and work on projects they find interesting. 

The other advantage of remote work is the safety cushion it provides during uncertain times. The coronavirus pandemic, for example, resulted in thousands of layoffs and furloughs for full-time employees. Those established in the gig economy, have more opportunities to look for work from their various employers. 

“Coming out of this pandemic, there are a lot of jobs that people are not going to be able to come back to,” Keene said. “[The gig economy] has jumped forward 10 years.” 

Keene said that in conversations with Fortune 500 CEOs before the pandemic, those executives didn’t see gig work as an immediate trend. With the onset of COVID-19 and remote work, however, these opinions changed, with most CEOs pointing to gig work as the future of work. 

Advantages of gig work for employers 

Employers also benefit significantly from the gig economy, particularly in the IT sector, the report found.

Constellation Research used project data from on-demand IT staffing firm Gigster to show the benefits of using a gig economy approach. 

Compared to typical industry data, gig economy IT projects were 30% more efficient on average in their staffing. The projects showed customer dissatisfaction reduced by half, and such projects had more than three times the gig worker satisfaction rate of traditional IT projects, the report found. 

Hiring at most IT departments involves expensive and time-consuming recruiting, obtaining work visas, paying competitive wages, and lengthy onboarding processes. The gig economy, however, eliminates those issues by allowing companies to contract employees for a certain project or amount of time, based on skill.

This type of work widens the talent pool, too, with flexible schedules and remote positions making jobs doable for single parents and nontraditional workers, Keene said. 

Gig work for IT allows for faster access to talent and shorter time until productivity, the ability to hire IT staff for services not needed on a regular basis, agility in scaling IT staff up and down quickly to meet business demand, reduced cost of providing healthcare and other benefits, and lower workspace costs, according to the report. 

Continuing on with the data from 190 Gigster projects, the report found that Gigster projects  were consistently 30% more efficient for the same kind of project for the same time, during every stage of the project. 

An IT project run through Gigster’s talent platform consumed approximately 30% less full-time employees over time versus a similar project staffed the traditional way.

“We [can] convince enterprises that there’s much more flexible ways to manage their resources,  open them up to the opportunities of working with a more diverse talent pool, and support more diverse schedules,” Keene said. 

With gig work, “As long as you get your work done, as long as you’re available in core hours, and as long as you’re able to collaborate and communicate effectively, it doesn’t really matter that you’re there eight to five in a particular building at a particular desk,” Keene noted. 

Furthermore, the majority of traditionally staffed projects suffer from a high failure rate due to poor data-driven quality loops and limited external reviews. More than half of those IT projects underperformed (53%) or were cancelled (31%). 

The majority of gig economy IT projects (91%) in a data-driven delivery platform, however, were successfully completed, the report found. 

“You should put resources onto a project based on the specific skills that you need for the next phase of the project and the amount of skills,” Keene said. 

“Many roles don’t have to be full time. Architects, for example, or scrum masters or various subject matter experts, they are really valuable for their expertise,” Keene said. “What you really want is their insights and their maturity and their knowledge. You don’t need them 40 hours a week to do something that only takes 20 hours.” 

For more, check out 5 ways the future of work is changing, due to coronavirus on TechRepublic. 

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