'Moonlighting', 'side hustle' and 'solopreneurship' – all of these terms have become highly familiar both for businesses and the younger representatives of the global workforce. Today, anyone can start monetizing their skills and expertise on the side or even full-time with relative ease.
'Alternative work arrangements' are now the norm for nearly 57 million people in the US alone, according to Forbes. Technology has become a significant enabler of the gig economy. With a smartphone connected to the internet, anyone can now secure a quick job or build a full-fledged business. Big data and AI hold a great promise of transforming the gig economy even further, resulting in better experiences both for freelancers and their clients.
Big data can improve the matchmaking process on freelance marketplaces
According to PYMNTS.com research conducted this year amongst the US-based gig workers, 38.4% of non-seasonal gig workers secure their gigs through digital marketplaces. Most find this route convenient and more secure than setting up direct arrangements with clients. However, the competition is getting tougher each day. By 2020, 43% of the US workforce is expected to go freelance and work remotely, according to Nasdaq. As a result, securing good jobs may become challenging for those working exclusively through marketplaces.
The good news is that employers are catching on with this trend. Per an EY survey on the gig economy, one in two organizations had significantly increased the use of gig workers over the last five years, and plan to keep the same pace in the future. But, as the online gig space becomes more crowded, both employers and gig workers confide that finding a good 'match' can take a lot of time and effort.
Big data has a strong potential to solve this conundrum. Machine learning (ML)-powered algorithms can assist with the talent search by gauging the client's demands (including the unvoiced ones) and suggesting them with the optimal match for the job at hand. Gig workers, in turn, will agree to provide more professional data (e.g. information from social media profiles, educational credentials, complete resume) to assist such systems with the selection process.
Additionally, early attempts in AI-driven recruiting prove that such systems can be less discriminatory when it comes to race, age or gender. As well, new generation algorithms have become rather well-versed in predicting personality attributes of the candidates based on standard DISC and big five. All of these features combined can make the gig economy process fairer, streamlined and effective for all parties involved.
Big data can largely improve the payment experience
Cross-border payments can be a sore area for digital gig workers catering to a global clientele. The money remittance fees can be high, and the options for accepting payments can be limited in some markets. Payment services providers are also experiencing pressure from the gig economy as they need to make sure that those transactions are not fraudulent; and that the recipient complies with the tax obligations at their place of residence.Gig workers, on the other hand, would want to benefit from the added protection against non-paying clients. Over 58% of freelancers in a PayPal survey admitted to not getting paid for the services provided at least once during their career.
How can big data and AI help? Predictive algorithms can mitigate the fraud risks and reduce the friction at the KYC stage. Additionally, such algorithms can self-optimize over time and develop personalized policies for individual users based on their behavior patterns.
Michael Brooks, CEO of goLance, a freelance jobsite, also notes that digital marketplaces can use big data and AI as a competitive advantage for customers.
"The present state of these technologies allows achieving an incredible level of automation. Meaning that online marketplaces can deploy new competitive features," he says. "For instance, using robotic process automation, you can streamline the contractor tax reporting for employers. Freelancers, in turn, can benefit from personalized financial analytics that will allow them to make more accurate financial projects for their business."
AI can help gig workers improve their business operations
As AI gradually moves towards being a 'commodity' technology, gig workers gain more tools for improving the operational side of their hustle. The 'smarter' tech allows streamlining the low-value, daunting and ineffective processes every freelancer has to deal with – project management, onboarding new clients, outreach and so on.
For instance, Respondable – a new tool developed by the Boomerang for Google team – promises freelancers to ramp up their cold email response rates. Algorithmically, the tool assesses an email based on several parameters such as length, word count, sentiment and reading level, and then provides an estimate of how likely a pitch will receive a positive reply.
Fundera offers AI-based assistance for project management. The app can dynamically organize the user's daily schedule, based on the added tasks, auto-adjusts deadlines based on your performance and otherwise helps develop a better grip of the daily schedule. Considering that speed and productivity are key to a high gig work paycheck, this tool has a potential to say freelancers are a lot of time.
Big data and AI are massively changing the way how the gig economy operates. In fact, 49% of freelancers in an Edelman survey state that AI has already impacted the way they work. In the future, we should see further tangible improvements in the hiring process, the payment experience and business operations bolstered by innovative technologies.