White-collar work may become gig work following the coronavirus pandemic.
Amid the global coronavirus outbreak, an astronomical 40 million-plus Americans filed for jobless claims over 10 weeks. And many jobs in transportation and hospitality might never come back, economists say.
Layoffs have also hit white-collar workers in tech, as Airbnb, IBM, and Tesla announced they would cut jobs and reduce pay. Many of these specialized, well-paid tech workers may have worked at their companies for years without ever considering that their jobs were in jeopardy, Joe Mullings, the CEO of an executive-recruitment firm, said.
Mullings’ company has worked with companies including Google, Siemens, and Johnson & Johnson to recruit and hire for C-suite and executive-level positions.
Mullings said the coronavirus pandemic might bring about a period where employers need highly skilled workers but won’t have the resources to bring all full-time employees back to work.
The resulting “interim economy” will therefore consist of once full-time consultants or engineers working multiple contractual “gigs” for different companies, Mullings said.
“You’ve got tens of millions of people who are highly skilled and have a specialized skill set employers need but can’t bring them back at full compensation,” Mullings told Business Insider. “Some employers are going to take advantage of this. They are going to bring in flexibility you’ve never had before.”
How the coronavirus pandemic is pushing white-collar workers into the gig economy
Many Americans understand the gig economy as a pool of jobs accessible to anyone who can drive a car or delivery groceries at a moment’s notice. But the gig economy extends beyond delivery apps. Veteran journalist Tina Brown coined the term “gig economy” to refer to white-collar workers who could charge companies fees for their expertise without going through a third party. A consultant could charge a company for her own knowledge directly, eliminating the need for a consultancy.
“These new alternative workers are not overwhelmingly low income. They’re college-educated Americans who earn more than $75,000 a year,” Brown wrote for The Daily Beast in 2009. “Welcome to the age of Gigonomics.”
But specialized, high-paying jobs haven’t transitioned to the gig economy because the cost to recruit, coordinate, and build contracts for individual engineers and consultants is high. The Harvard Business Review said that if a person needed to hire two experts well-versed in Singapore and US tax law to help her business, she would need to recruit and draw up a contract for these gig roles. Going through an accounting firm saves the time that would otherwise be spent on recruitment and writing up contracts.
The pandemic, however, may have created a perfect storm for the “gigification” of white-collar labor. In addition to an abundance of newly laid-off knowledge workers, the pandemic has also pushed industries “previously impervious to remote working” to work from home, Harvard Business Review said.
Wall Street laid off workers and rehired them in contract roles after the 2008 financial crisis, for instance, NYU professor and economist Nouriel Roubini said in an interview with New York magazine. He added that this financial crisis would lead to “more of the same.” When some (but not all) of the laid off begin to get rehired, they will get part-time jobs without benefits and high wages, Roubini predicted. “That’s the only way for the corporates to survive.”