It’s the latest trend in an evolving workforce where individuals seek employment on their own terms. It is known as the “gig economy” and it’s here to stay! But what is it exactly, what kind of jobs are involved and how can you be part of this booming industry?
According to the Macquarie dictionary, the gig economy is “individual workers … employed on a contract to do a particular task for a set time with little connection to their employer”. People work in the gig economy for a variety of reasons and in a variety of ways. Some people work in the gig economy as their main source of income. Others work in it occasionally to supplement their income when moving between careers, jobs or as a transition into retirement.
Why is the gig economy so popular?
Participation in the gig economy has grown rapidly over the past few years, particularly with the challenges of COVID-19. The gig economy has transformed the traditional, in-office 9-5 working world and caused many to pursue “gig” work for additional (or even primary) income.
Employment figures are also a factor, with the Australian Bureau of Statistics reporting that in April 2020, underemployment hit a record high of 13.8 per cent, and in June of that year, unemployment hit a record high of 7.5 per cent — the highest level in over 20 years. For many, the gig economy was, and still is, a way of keeping money trickling in.
The gig economy can offer individuals flexibility and convenience. It gives individuals the opportunity to work when and how often they want, and to balance work with personal commitments such as hobbies, study and family responsibilities.
What work options do I have in the gig economy?
Examples of “giggers” include project-based workers, independent contractors, freelancers, sole traders and people hired temporarily or part-time.
But perhaps one of the biggest draw-cards of the gig economy is the breadth of variety in terms of the industries you can work in. You can specialise in anything from graphic design, E-commerce, copywriting and bookkeeping to childcare, beauty, gardening and even dog grooming! And that’s just the start! Many giggers also run their own ridesharing, delivery, tutoring, administration, marketing or project management businesses.
How can I join the gig economy?
In terms of how to join the gig economy, there is a wealth of advice readily available, including at the national and state government levels. But here are five of our top tips.
#1 – Register for an ABN
If you want to be part of the gig economy in terms of starting your own business and being paid for your goods or services, you will need to register for an ABN (Australian Business Number) to legally operate.
This is a unique number that the Australian Business Register issues to all businesses. It identifies your business to the government and community and to the Australian Taxation Office (ATO) when dealing with your tax obligations. If you earn more than $75,000 per annum, you must also register for the Goods and Services Tax (GST), which requires an ABN.
#2 – Market your brand
If you want to join the gig economy, marketing and advertising your brand and business is critical. A good place to start is by researching problems, trends, demographics and other observations within your target market. Then take a close look at your business and see how you can set up smaller marketing tasks. Here are some examples:
- Reach out to current business connections and ask friends, family and past colleagues to reach out to their co-workers and connections. Referral discounts or free services or consultations are incredibly valuable here.
- This can include digital networking, joining online forums, attending conferences and industry events, and actively engaging with other businesses via platforms such as LinkedIn.
- Create a website. There are a range of easy-to-use website creation tools out there that you can experiment with. You’ll also need a domain name, URL and a web hosting company that will help get your website “live”. You can find out more here.
- Advertising takes many forms, and the platform you choose will depend on your target audience, your budget and what is appropriate for your particular product or service. Traditional advertising platforms include newspaper, magazine, radio, TV, phone directories, outdoor, direct mail and electronic direct mail. However, advertising online via websites, digital marketing, Google My Business and social media (like Facebook, Instagram, Pinterest and Twitter) is one of the most powerful and cost-effective ways to attract new customers.
#3 – Be insured
Another important element to consider if you are keen to join the gig economy is insurance, particularly if you are a sole trader. A sole trader is classified as “someone who owns and operates a business in their own name”. The different types of insurance include:
- Public liability insurance. This is required for all sole traders and covers accidents, damage to third-party property, or bodily injuries resulting from services that you provide.
- Third-party personal injury insurance. This is typically required for sole traders who operate a vehicle as part of their job.
- Worker’s compensation insurance. Although not necessarily required, it might be worth considering if you plan on hiring subcontractors or other freelancers to work with you on your business as it will help you provide compensation for any injuries they incur while on the job.
- Professional indemnity insurance. If you provide advice or professional services, this kind of insurance protects you and your business against claims of errors, negligence or
- Insurance for equipment. Many creative professionals use expensive equipment. Insuring this will help you get reimbursed for stolen, lost or damaged gear. Additionally, you can purchase electronic equipment insurance to protect things like your laptop or computer from damage or theft.
- Technology and cybercrime insurance. If you operate much of your business online, cybercrime insurance can give you financial protection from scamming, hacking and other technological disruptions.
#4 – Consider your super
If you are considered to be a sole trader or self-employed by the Australian Tax Office (ATO), obviously super payments won’t be contributed on your behalf by an employer. However, any super you pay will be your choice rather than a legal requirement.
The benefits of contributing to super include:
- You will be saving for your retirement.
- You may be able to claim a tax deduction for personal super contributions.
- Super contributions are taxed at 15 per cent, so you may save tax depending on your situation.
- Super investments usually get better returns than bank savings accounts, so your savings will grow faster.
#5 – Get financial help
Between managing customers and clients, sending invoices, marketing your products or services and actually working, finding time to undertake your own administration and finances can be challenging. If you work for yourself as a contractor, freelancer or sole trader, engaging the services of a professional accountant can help with:
- Saving you time. Transferring the financial upkeep of a business to a professional will allow you to continue what you do best — working! It will alleviate you having to research complicated tax rules and lodging tax returns and Business Activity Statements (BAS).
- Saving you money. Experienced accountants can advise you on which of your business expenses are necessary, those that may help minimise unexpected tax obligations, and help you claim potential deductions on business expenses.