How the Gig Economy Is Changing the Canadian Tech Industry: Part 1
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Historically, qualified employees would find a job with a company and stay there for years, even decades, building a career and eventually earning a pension. This was true of all industries, at all levels. Those days are over.
Instead, the gig economy has taken centre stage. A lot of workers operate as freelancers or independent contractors, rather than traditional employees, to the tune of 20-30% of the Canadian workforce.
Even the International Monetary Fund (IMF) has recognized this change, as they review the impact of the gig economy on more traditional employment statuses, including the ability to qualify for social insurance and other support systems.
How Did the Gig Economy Come To Be?
“On demand” services have been growing with changes in technology. Everything from SaaS—Software as a Services—to food delivery have disrupted the traditional models of doing business. Entire industries have flourished where they never existed prior to the technology being available.
This same ‘on demand’ requirement also means that companies who offer such services need to be flexible and able to pivot, changing their model in an instant, if that’s what the market demands.
This kind of agility isn’t possible in a traditional company framework, with a hierarchy and staff who may or may not be effective at producing the necessary pivots.
How Will the Gig Economy Change the Tech Industry?
Tech—including app development—is the fastest growing industry in the world. It has always been a disrupter of the workplace and it’s about to get a lot more disruptive.
There is a need for companies to remain agile and fluid, to be able to respond to the growing and ever changing needs of their customers, both business and consumer.
Tech companies need to be able to hire for the skills they need, when they need them, without the overhead of retaining a legion of staff, and the infrastructure required to support that staff, who don’t serve their immediate needs.
“We believe this will drive a workforce revolution: Archaic workforce structures where people had a specific job within an organization are being upgraded to labor platforms that allow more on-demand models, giving people opportunities to work on different things and in different ways,” said Mary Hamilton, managing director and lead of the Digital Experiences R&D group at Accenture Labs, and Alex Kass, Accenture Labs Fellow.” (Source)
- Eighty-five percent of IT executives planned to increase their organization’s use of independent freelance workers over the following year.
- Seventy-three percent of IT executives surveyed reported that corporate bureaucracies were stifling productivity and innovation.
While the 2017 numbers of 20-30% of the Canadian workforce mentioned above as being a part of the gig economy might not seem very high, those same numbers are also expected to grow quickly in the next few years, and none more than within the tech industry, which is the baseline resource for so much of the change in the workforce is seeing.
Tech companies that want to optimize their operations, financially and in terms of their ability to respond to market demands, will look to the gig workers more and more. Clearly, the gig economy is here to stay.
As it becomes more the norm than the traditional employment model, the solutions to issues of work insecurity and social support will have to change too. With the Canadian tech industry at the forefront of this evolution, it will also be a testing ground for how workers will change the industry and vice versa.
This blog is part 1 in a 3-part series on The Tech Industry in Canada: Largest Growing Market.
Photo by Tim van der Kuip on Unsplash
