Gig Economy Growth Outlook for 2024: How High Inflation, Higher Interest Rates Affect Gig Work

This is a complicated moment for gig economy growth, even a fragile one. Inflation has been sitting at 6.4-6.5%, not as bad as it’s been, but still uncomfortably high. The Federal Reserve Bank continues to increase interest rates to cool down spending. What does this mean for how gig platforms enable contractor performance?

We can make several educated guesses based on the trends we’ve seen play out in recent years. Join us as we explore our gig economy growth predictions for the rest of 2023 and into 2024 – a time that has been full of change and uncertainty.

Gig Economy Growth – Top Trends for This Year

If you’re worried about gig economy growth, it’s important to remember that gig work is still forecast to grow to 50% of the economy by 2027. Still, it’s important to consider how economic shifts might affect gig workers through performance management technology, as we do below:  

1. Technology’s Role Will Become Even More Critical

Those who have been paying attention know that technology plays a crucial role in gig work. This applies equally to direct selling organizations and large gig platforms – consultants have come to expect easy-to-use technology that adapts to them, rather than the reverse. 

Partly this is a consequence of platforms like Uber changing expectations with their mobile apps. But it’s also a result of the growth of gig work itself – according to the World Bank, the gig economy now accounts for up to 12% of the global labor market. Technology helps consultants and contractors deal with an abundance of opportunities that by nature require them to always be on the go.    

Now that inflation is top of mind for many, it is going to be even more important to have technology that meets them where they are – that provides a simplified experience. At a chaotic and anxious time, folks want technology that makes it easier to make money, that feels like it works for their benefit. 

For too long consultants, contractors, and distributors have been burdened with inhospitable technology and multiple, poorly integrated systems. Stand out in 2024 with performance enablement technology that feels truly modern and digital, and that even makes training fun! That’s going to be crucial, going forward.

2. Company Empathy Will Increase in Importance (Case in Point: Gas)

Not only is inflation projected to continue being too high for the average consumer, but fuel prices are also a factor. It’s no secret that gas prices are up worldwide for a confluence of different reasons – these factors include Russia’s invasion of Ukraine and America’s depleted capacity to refine oil into gas. 

As fuel prices stay uncomfortably high, gig workers are going to get hit. Many consultants, contractors, and distributors use cars to get around and make money – everyone from Uber drivers to cookware distributors who need to drive to a product demo. 

Consider using continuous learning and development (L&D) content to show folks how to create efficiencies in their use of fuel. Rallyware’s Performance Enablement Platform (PEP) helps you design L&D content and automate their flow to the workforce based on triggers like personal goals and weekly achievements. Regardless of the technological specifics – which you can always investigate more by requesting a demo – the fact is that you can use L&D content to show the workforce that you empathize with the high fuel prices; that there are ways to ease their fuel usage numbers; and that gig economy growth as a whole can be made easier. 

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Though there’s not much you can do about higher gas prices, you can show up – and show the workforce that you care.

3. ‘Great Resignation’ Will Require Asking Hard Questions

Throughout 2020 and into ’21 and ’22, the Great Resignation was a major factor in the job economy. People were leaving their standard-issue jobs en masse: according to the Bureau of Labor Statistics, over 47 million Americans voluntarily left their jobs in 2021. 

In some sense this redounded to the benefit of gig work. Stores and restaurants were closing, supply chains were disrupted, hours were cut – forms of gig work like direct selling and freelancing were obvious, profitable alternatives. Companies started wondering how to improve performance for remote teams. Still today, worker shortages and voluntary job quitting continue unabated.  

Now, with inflation and interest rates set to rise, it’s hard to know what the Great Resignation will look like as we enter 2024. Will the workforce return to non-gig work out of a craving for certainty? It’s doubtful – most industries that were struggling in 2021 and 2022 will likely continue to be that way. 

What happens if too many workers join the gig workforce? Will the gig economy be able to handle it? The gig economy is projected to include 50% of the U.S. workforce by 2027, and economic challenges might speed up that transformation. Is your organization ready to retain that volume of workers and help them succeed? Do you have the technology that will unlock their full potential? These are the questions you should be asking yourself as we stare down another year of the Great Resignation.    

4. Consumer Spending Will Slow

Get ready – with interest rates going up, consumer purchasing will likely slow, as consumers will have less discretionary money to spend. (That’s the hope behind interest rate increases, after all – to cool off the economy.) In fact, this is already the case, as US consumers have eased back on their spending. That might also mean fewer Ubers, TaskRabbits, and direct selling purchases – which could lead to less engaged workforces, who see higher hills to climb to reach their goals.

There are things you can do to prepare. As usual, the technology you use will be decisive here. Some questions to consider include:

• Can you automate L&D content that coaches consultants on how to persuade reluctant buyers?
• Can your technology gamify sales to help the workforce stay engaged with their success journey – even when it’s a struggle?
• Can your platform help the workforce track and manage day-to-day opportunities? 

Obviously, corporate headquarters can’t coach, encourage, and guide their workforce individually – but they can acquire technology that’s capable of doing so. Such platforms can close enthusiasm gaps in the workforce. At the moment when workers are ready to give up, the right technology meets them where they are, showing them how to accomplish their weekly income goals and making it easy to do so.

5. Performance Enablement Will Rise

We’ve explored this on the Rallyware blog before, but performance enablement is arising as a new paradigm for thinking about the relationship between business outcomes, technology, and the workforce. It’s the future of productivity – seeing technology as actually driving key business results, not just managing them after the fact.  

Don’t just take our word for it. Outlets like SHRM are writing at length about the effect that performance enablement is having on the workforce. So, what do we mean by performance enablement? Is it just another buzzword for driving gig economy growth using technology? Not exactly.

Performance enablement automatically personalizes the workforce’s user experience (UX) for the all-in-one app they use. It changes and adapts as the individual user’s goals, needs, and performance change. Performance enablement platforms also drive results based on corporate KPIs, altering the workforce’s experience based on whichever KPI has dipped below acceptable levels, adapting in real time. 

Combine this with robust data analytics, cross-enterprise communications solutions, and rewards and recognition technologies, and you have a paradigm shift. Performance enablement propels individual users toward their personal goals, while also calibrating their UX to match corporate KPIs like sales force productivity and customer retention. Such tech could prove very useful to gig workers as they navigate a more uncertain economy, as well as the companies that stand behind them. 

6. Consumer Sentiment Will Drop

As of early 2023, 87% of Americans are concerned about the economy. It’s likely that that will continue to affect spending on goods and services. If consumer spending flags even more, company earnings reports will be in trouble. 

That’s where technology comes in. Large gig platforms can cut costs by consolidating their tools in a single performance enablement platform, one that drives growth as well as creating efficiencies. Cutting costs while driving revenue is the two-step of choice for 2023.

Rallyware is built to help you adapt to changes in economic reality – next year and beyond. Request your free demo today!