I recently overheard two flight attendants talking about how they became Uber drivers to earn extra cash on their way home from the airport. They were giddy with excitement of earning hundreds of extra dollars a month simply for picking up a ride on the way home from work. A drive they would have done anyway now comes with a little extra cash.
The idea of turning your home into a hotel and your car into a cab is a quick and easy way for people in all types of careers to add extra income to their pockets. This sharing economy is changing the way many think about work. And, for some it is creating whole new business opportunities they build for themselves when not at their “day job.” These new micro-entrepreneurs are finding alternatives to traditional jobs as a way to change their lifestyle and add discretionary income.
As I listened to the flight attendants, I began to wonder, will this concept of the sharing economy change everything from law firms and accounting firms to ad agencies and software developers and other services that can easily be “shared”? In many ways, that shift has been underway. A small business owner may not need a graphic artist 5 days a week all year round, but when they do, they don’t mind paying a premium to hire a talented freelancer. The same is true with a network engineer or any number of other services. The sharing economy has responded with businesses facilitating these new transactions like E Lance, Upwork, Outsource or many others that now help connect freelancers who can deliver services remotely with businesses needing those services anywhere on the planet. Even incubators or office sharing arrangements and real estate developers seem to be jumping on the trend by providing shared office space for these micro-entrepreneurs. Places like We Work or Liquid Space have hit on a trend to create cool work spaces for individuals(i.e. micro- entrepreneurs). The trend coincides with the Millennial Generation hitting their thirties and redefining what work-life balance means. They no longer look to the traditional job model as the only way to make a living.
It works out well for both parties. The small business owner works with talented people only when they need it and pay a premium for that service, but not the same cost as managing a full-time employee including the taxes, health insurance, worker’s compensation, vacation, and all the other expenses that typically double the cost to a business of the salary paid to the employee. For the micro-entrepreneur, they are their own boss and answer to not just one client but many and build out the lifestyle they want, being valued and paid for the work they do, exploring new career opportunities as they grow their micro-business. For the business owner, if the freelancer doesn’t do a good job, they simply find someone else, a lot easier than firing someone who works full time. For the freelancer, if they don’t like the client, well they don’t have to take that work in the future. Now, there is a downside, of course, for everyone, because there isn’t the same predictability or certainty of commitment to one another, but for many millennials, they never believed in that commitment or loyalty from the outset.
As the sharing economy redefines what is the “new normal” way to make a living, other industries may soon follow. For example, could law firms become loose associations of independent solo practitioners eliminating the need for big salaries and overhead? Will big marketers begin to look at smaller boutique shops that use a lot of freelancers versus big agencies with hundreds or thousands of employees that all must be fed and overhead that must be paid for by someone – not to mention the debt that’s needed to finance it all? As markets become more tumultuous, will the nimble ability to react, respond and change in a dynamic world be more appealing than the old stalwart blue chip firms? Will large companies begin to devalue the excess cost associated of those big firms and agencies such that they choose to go with smaller micro-entrepreneurs? And, even beyond that, will large companies looking to shed costs consider eliminating full time jobs for contractors, freelancers or small firms that are all too happy to have their work and serve them without the continuous overhead?
Only time will tell, but the sharing economy and concept that it provides, particularly to millennials, will surely have an impact if not a full paradigm shift on how work forces are managed in the coming years. When so many services can be performed remotely and delivered via shared cloud based systems, the technology needed to support this new way of working not only exists, but is a lot less expensive than the traditional office based system. The sharing economy has already shattered old business models for tried and true industries like transportation and hospitality. Just imagine what industries could be next.
If you want more information about how to predict future trends that impact your business using our Digital Mapping tool, contact Jen Wolfe at jwolfe@dotbrand360.agency.