Most Gig Workers Are Independent By Their own Choice Says Report

Payroll company ADP is reporting that the majority (70%) of 1099 gig workers say they are working independently by their own choice, not because they can’t find a “traditional” job.  

In addition, 60% of 1099-M gig workers say they will continue to gig for the next three years.  Those surveyed seem happy with gig work and place a premium on flexibility as a driving motivation behind their decision, over financial security or benefits.  

n a first-of-its-kind study, the ADP Research Institute puts the spotlight on the gig workforce in organizations, often described as a hidden or ‘shadow workforce.’  The research report titledIlluminating the Shadow Workforce: Insights into the Gig Workforce in Businessesreveals tenured workers and retirees are capitalizing on the tight U.S. labor market and the need for skilled workers, by turning to gig work.  

BIG TAKEAWAY: The report also found 1 in 6 enterprise workers are actually gig workers paid as either 1099-MISC (1099-M) workers or short-term W-2 employees working one to six months.

Backed up with anonymized payroll data of 18 million workers from 75,000 companies, coupled with 16,800 direct survey responses from traditional employees and gig workers, and 21 C-level executive interviews, the research shows that this changing composition of the workforce has significant talent management, budget and compliance implications for businesses of all sizes.

Additional finding include;

Following are additional takeaways from the report:

  • Gig work Growth: From 2010 to 2019, the share of gig workers in businesses has increased by 15%, with both short-term W-2 and 1099-M gig workers contributing equally to this growth.  The research indicates gig work will continue to grow, further impacting workforce dynamics and forcing companies to optimize talent management and workforce strategy.
  • All industries use gig: Recreation, construction and business services are the top three industries utilizing the gig workforce.   
  • Gig work is not sporadic: More than half of the 1099-M contractors work for the same company for 12 consecutive months just like any traditional W-2 employee.
  • Earning potential is similar to a traditional worker: The average income for employees working for 12 consecutive months is similar, regardless of being a 1099-M worker or a traditional W-2 employee.
  • Millennials and Gen Z gig it their way: Gig workers under the age of 34 view themselves as traditional employees, perhaps reflecting the shift in the workforce.  However, the prospect of health insurance does not appear to change their job behavior.  In fact, 74% say they would continue to work as a 1099-M worker, even if they lost their current health insurance.

Suffice to say, the gig economy is here to stay.