One in six workers are gig workers and they represented 16.4% of the workforce at enterprise firms in the US during 2019. These statistics appeared in the report “Illuminating the Shadow Workforce: Insights into the Gig Workforce in Business” released this week by the ADP Research Institute. That percentage is up from 14.2% in 2010.
In addition, every industry relies on gig workers, as companies scramble to find the right talent, according to the report.
This figure differs from data tracked by SIA. According to its annual survey of buyer organizations, an average 21% of their workforces were contingent in 2019. However, SIA defines gig work more broadly than this report, treating the gig economy as synonymous with all contingent work and, as such, includes workers who are sourced and managed through a number of different segments within the Workforce Solutions Ecosystem.
The ADP Research Institute’s report looked at two kinds of gig workers: short-term W-2 employees and independent contractors paid as a 1099-MISC. It did not look at workers through online platforms such as Uber or DoorDash, who are typically paid as a 1099-K independent contractor.
“Our research shows that companies are turning to tenured, skilled workers and retirees on a gig-basis to meet this growing demand,” said Ahu Yildirmaz, co-head of the ADP Research Institute.
The ADP report found 1099-MISC workers — who are independent contractors and hired for their skill sets on a project basis — tend to be older, highly educated and choose to work on what they enjoy. The report found 30% of 1099-MISC works are aged 55 or older.
Meanwhile, short-term W-2 employees discussed in the report are younger, less educated, have a lower income and are typically working on a seasonal or on-call hire basis.
Takeaways from the report include:
Gig work growth. Short-term W-2 and 1099-MISC workers contributed equally to growth in the share of gig workers from 2010 to 2019.
Every industry relies on gig workers. Recreation, construction and business services are the top three industries using the gig workforce.
Choice. More than 70% of 1099-MISC gig workers say they are working independently by choice, not because they can’t find a traditional job. In addition, 60% say they will continue to do gig work for the next three years.
Gig work is not sporadic. More than half of the 1099-MISC contractors work for the same company for 12 consecutive months just like traditional W-2 employees.
Earning potential is similar to a traditional worker. The average income for employees working for 12 consecutive months is similar regardless of being a 1099-MISC worker or a traditional W-2 employee.
Gig workers under the age of 34 view themselves as traditional employees. In addition, 74% say they would continue to work as a 1099-MISC worker even if they lost their current health insurance. About 90% of gig workers have health insurance.
States with the highest proportion of gig workers are:
- Florida, at 22%
- California, at 20%
- Illinois, at 18%
- Texas, at 18%
The ADP Research Institute’s report is based on anonymized payroll data from 18 million workers from 75,000 large companies (those with more than 50 employees). It also includes data from 16,800 direct survey responses from traditional employees and gig workers as well as information from 21 C-level executive interviews.