Gig Economy

Temporary Work Even Bigger In Europe

Temporary, contract, gig employment and job-hopping are fast becoming the new norm in the U.S. and elsewhere, especially among the younger workforce.

The first edition of the PYMNTS Gig Economy Index™ found that millennials typically change jobs four times within the first 10 years of graduation, compared to just two job changes in their parents’ generation. As much as one-third of workers in the current U.S. economy are engaged in short-term, ad hoc work.

In 2005, an estimated 10.1 percent of Americans worked gigs. By 2015, this had grown to 15.8 percent, an increase of 9.4 million workers. By comparison, during the same time period, the U.S. economy gained only 9.1 million jobs. Expect these numbers to rise as featured in the new, upcoming edition of the PYMNTS’ Gig Economy Index.

Some estimates place as much as 40 percent of the American workforce as part of the larger gig economy — including contingent workers and independent contractors — by 2020. By 2025, some projections account for the gig economy to both reduce unemployment time for more than 250 million people and add more than $2.7 trillion to the gross domestic product.

But the rise in temporary, contract employment and gig work are far from being a solely stateside phenomenon. If anything, temporary employment is an even larger part of Europe’s job market, given that unemployment rates in the region are nearly twice as high as those in the U.S.

According to data from Eurofound, the EU’s research foundation for the improvement of living and working conditions, more than half of all new jobs that have been created across all industries in the region since 2010 have been temporary contract positions.

Spain, for example, saw 18 million temporary contracts handed out last year compared with 1.7 million long-term jobs. In the Netherlands, more than 20 percent of job contracts are temporary. And in France, more than 80 percent of all hires are reportedly temporary.

The appeal of this form of hiring is largely cost-based for European employers looking to save wherever they can in wake of the financial crisis where recovery is still tenuous for many. The New York Times noted that European labor laws make permanent workers more difficult to lay off, and they often require more costly benefit packages.

“From the onset of the crisis, temporary employees have been more likely to exit employment,” wrote Eurofound. “This may increase the likelihood of them falling back into unemployment and holding temporary contracts in the future. At the same time, temporary employees find it more difficult to move into permanent positions and escape the cycle of temporary employment and unemployment.”

And Eurofound’s data shows that just 20 percent of temporary workers in Europe have transitioned to full-time work since 2012. The rise of temporary work has taken a toll on the European workforce’s financial stability, as temporary employees were found to receive 19 percent less pay on average than their permanent counterparts.

In the next few years, governments and other regulatory organizations will likely focus their attention and efforts on guaranteeing some measures of income protection for freelancers and temporary contractors to either solidify or erase the as-of-now blurry lines between contract workers, freelance specialists, employees with variable hours, and the temporary and seasonal workforce. Regardless of how the regulations fall in the end, gig work will increasingly be more than a quick fix for companies and a cash grab for workers — it could outright become the new face of the worldwide workforce.

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