The Gig Economy’s Impact on the Future of Work
I was recently in an Uber on the way to the airport when I started chatting my driver up. It turned out he had three similar on-demand kind of jobs—none of which were stable, traditional gigs.
This got me thinking: Many of today’s workers, and the younger ones in particular, are more entrepreneurial than their predecessors—despite the fact that they aren’t necessarily bona fide entrepreneurs.
More than 20 years ago, I landed my first real job: a full-time entry-level position on Wall Street at Fidelity Investments. Remember? Young professionals used to be able to get entry-level jobs at good companies and climb the ladder. But today, those jobs simply don’t exist, as many lower positions are outsourced or automated with technology. The economy has changed and new hires are expected to come to the job and start producing on Day 1. Hard to do with only a university degree.
Altogether, these trends have led to a generational bulge of middle-tier jobs. This area of the workforce is now occupied by people who usually would have moved out of those jobs faster, allowing the younger generation to advance sooner. But now they can’t get move upward at all, since folks in the middle tier stay there forever it seems. As a result, more and more people are leaving the lower rungs of traditional employment and are deciding to take part of the gig economy. That way, they’ll get the requisite experience to hit the ground running on Day 1 should they be offered a regular job by an established company.
How Young Workers Get Ahead in the Gig Economy
Want to land a job at Pixar? You’ll probably have to freelance for a while (think: YouTube design videos). Should you perform well in that role, you might get picked up full-time.
Within the next 5 years, many project as much as 50% of the US workforce will be made up of freelancers. This is both a blessing and a curse of the gig economy—especially as it pertains to younger people just entering the workforce. In the past, even those without a career path would fall into a nice profession simply by following the standard track. But today, you need to be more hustle-oriented and driven to reach just the first rung of many corporate ladders.
To be fair, there are exceptions to the rule. The career paths for lawyers and doctors might be the same due to the advanced education and certification required for those professions—and the free market probably won’t (and shouldn’t) change that. Nobody really wants a doctor who’s pieced together experience by performing operations on a gig-basis, right?
The Disruption of Venture Capital
While the rise of the gig economy has shaken up traditional career paths, it’s also enabled younger workers to make inroads into previously exclusive industries—like venture capital.
It used to be that, to get into VC, you needed an introduction from a family member or friend to land an internship. After that, you’d become an analyst. Do well there, and you’d earn your VC stripes. Then leave and go to a fancy Business School and go to a new VC fund as an associate. The better the MBA, the better associate job you’d get and so on.
That’s not true any longer.
Nowadays, there are several hundred VC firms. And hiring managers there are looking for entrepreneurs or former founders with operating experience. For example at my fund, Fresco Capital, we have three partners and three associates, and I am the only one with an MBA -and that was by accident! 🙂
What the Gig Economy Means for Young Workers
But remember, thanks in large part to the gig economy, there are other ways to meet that entrepreneurial criterion or grab that operating experience that don’t involve b-school.
Just take a look at Elon Musk’s story. When he started out, the serial entrepreneur had his sights set on working at Google. He waited outside the company’s Mountain View campus hoping to talk to people and was eventually rejected. Of course, we know how Musk’s story has turned out. He’s started a bunch of big-time businesses, which just goes to show that there are very non-traditional ways to cut your teeth nowadays.
At first, the gig economy looks scary. There’s no traditional go-to school to attend to land your dream job. But the gig economy does provide a democratization of talent—work is there, so long as you’re willing to hustle. Graduating seniors should consider the gig economy as a viable means for getting those tougher jobs.
The first step to landing your dream job starts with understanding that the economy is changing. The second step? Realizing you need to work harder and harder to beat out the next person.
What the Gig Economy Means for Employers
If large companies decide to hire kids right out of college simply because of where they went, they’re going to miss out on the best and brightest workers—it’s as simple as that.
More and more young workers are getting their first experience in the freelance economy. If you’re afraid to tap into this pool of talent, it’s only a matter of time before your company will lose all of its competitive advantage.
We’re going through a transitional period in the economy, and the traditional means of getting a job doesn’t apply anymore. The sooner both young professionals and their prospective employers understand this, the better off all parties will be.
