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Welcome to the Gig Economy

August 08, 2017 | John Salustri

If you haven’t heard of it, you will. Gig workers are playing a growing role in how corporate space users are redefining their staffing. While much has been written about how to hire and retain top talent, there is a simultaneous reliance on the utilization of gig—or, essentially, on-demand—workers. Taken alongside the corporate trend to do more with less, the gig movement could have major implications for commercial buildings, and those who are charged with their value enhancement.

First, some definitions. The phrase gig economy (the word is borrowed from freelance musicians) is most often is used in the context of Uber and Lyft drivers as prime examples of workers for hire. But gig workers can run the gamut from plumbers and spacklers to freelance writers and commercial artists. Or, as Investopedia puts it: “In a gig economy, temporary, flexible jobs are commonplace and companies tend toward hiring independent contractors and freelancers instead of full-time employees. A gig economy undermines the traditional economy of full-time workers who rarely change positions.”

The benefits of a gig staff, or partial staff, to the hiring corporation are obviously huge, feeding the many ways corporations are striving to do more with less, from salaries and benefits to footprint. “These ‘gig’ workers,” says Cushman & Wakefield in the 2017 edition of The Occupier Edge, “are ultimately changing the corporate landscape and how we work. Now, companies can much more easily hire non-permanent employees on an as needed basis, while gig workers are enjoying the freedom, flexibility and work life balance they crave. Everyone wins.”

(Well, sort of. Freedom, flexibility and work/life balance maybe. But those freelancers are also saddled with worry about the source of their next payday and grappling with tax structures and healthcare. It’s not a lifestyle for the faint-of-heart.)

Workers on demand are also prime candidates for space on demand, which carries huge implications for corporate overhead. “Firms are increasingly redesigning their offices to provide fewer private offices and cubicles,” says C&W, “and more open and collaborative space to address the fact that 30-50% of their workforce are not actual employees. The goals are twofold: first, to provide workplaces that facilitate discussion and collaboration. Second, to decrease the firm’s overall rent bill by providing less physical space per worker.”

Now, while this provides the above-named benefits to the corporation, it also carries a special responsibility, one that touches directly on the interaction between the user and the property and asset manager. C&W states that a culture of collaboration is key when corporations mix temp and full-time workers. “When all workers are engaged,” they say, “they are more likely to be committed to company goals.”

“Now more than ever,” The Occupier Edge continues, “CRE needs to secure a seat at the table with other business unit leaders when discussing the company’s strategy and forward-looking plans. There needs to be a good understanding of not only who will be using the space, but how and when they will be using it.”

And that has major implications for how asset managers define future value, and how building managers cope with more flexible lease terms, the accommodation of shifting teams and the expansion and contraction of workspaces.

Properties that offer the amenities that encourage collaboration and team and provide the flexibility for corporate users to swell and contract on an as-needed basis will be the ultimate winners. The gig economy is here, and everyone will be affected.

About the Author
John Salustri is editor-in-chief of Salustri Content Solutions, Inc., a consultancy focused on enhancing the web and print content of clients around the nation. He is a regular contributor to JPM Magazine and a frequent blogger for IREM’s website. Prior to launching SCS, John was founding editor of GlobeSt.com, the industry’s premier real estate news website, where he managed the daily output of 25 international reporters, and prior to that, he was editor of Real Estate Forum Magazine. John is a four-time winner of the National Association of Real Estate Editors’ Award for Excellence in Journalism.

Comments

09 Aug 2017 | Helen Day
Hi John, great article on strong emerging trend! One further thing: Workers on demand + space on demand = need for furniture on demand, whether it's a temp project office or touchdown space for meetings. CORT, a Berkshire Hathaway Company, offers a quick-to-deliver inventory of quality furnishings and services that are there when you need them and gone when you don't. Great for enabling property managers, facility managers and tenants to remain flexible in the Gig Economy!
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