Gigification of Manufacturing Jobs Marks a Significant Change in the Industrial Labor Force
In recent years, the manufacturing sector has undergone a profound transformation that is changing the way we think about traditional manufacturing jobs. This shift, often referred to as gigification, (pronounced GIG-ah-fuh-kay-shun), is re-shaping the landscape of industrial labor. Specifically, full-time employment with healthcare, retirement, and other benefits is being replaced by short-term, project-based, flexible work arrangements that offer no benefits and no income guarantees.
Small- and medium-sized manufacturers (SMMs) have long hired consultants on a project basis to provide assessments related to business practices and operating efficiencies, as well as deliver marketing and advertising services. Such arms-length relationships with shop floor workers have been highly unusual until the past couple of years.
Although statistics on gigification in the manufacturing sector do not yet exist, anecdotal evidence suggests that it is becoming more prevalent in southwestern Pennsylvania and nationally. The trend toward gigification and away from traditional work arrangements is being driven by several factors, including automation and robotics; globalization and supply chain complexity; and flexible production models.
As the use of automation technologies has increased over the past decade and most sharply over the past several years largely because of the convergence of the pandemic and technological advances, many traditional jobs in manufacturing facilities have been replaced by less formal employment arrangements. Typically, gig workers operate, maintain, and troubleshoot equipment on a temporary or project-specific basis and move on to the next assignment, or gig, when a job is finished.
When it comes to the globalization of manufacturing operations, that phenomenon has produced an intertwined network of supply chains that can add complexity to the production cycle. As a result, many SMMs are finding that they must have a higher degree of flexibility than they can achieve through traditional employment arrangements. Such unpredictability means that employers are reluctant to hire full-time workers who may be idled for days, weeks, or months at a time based on customer demand for a given product and availability of parts, components, and assemblies used to create finished products. It is a risk that many manufacturers are unwilling or unable to take, so they are instead opting to hire workers on an as-needed (just-in-time) basis.
Pros and Cons
In the manufacturing sector, gig workers include experienced professionals looking for flexible opportunities, recent graduates who want to gain valuable experience, and retirees supplementing their income. Although gig work offers the advantages of flexibility and opportunities to gain broader experience than many traditional jobs afford, the drawbacks are significant. They include income instability and a lack of benefits.
What’s more, gig workers often find it difficult to obtain mortgages, car loans, and financing for other “big ticket” purchases because they are unable to demonstrate to lenders that they have steady income which will allow them to make loan payments on-time. The reluctance of lenders to finance the purchases of gig workers despite their ability to afford the monthly payments can inhibit economic growth.
On the employer’s side of the ledger, gig work offers cost savings because employers do not have to pay workers a salary and benefits and can access specialized skills on an as-needed basis. Such temporary employment arrangements also reduce training costs because gig workers will likely have prepared elsewhere to handle the project work they are performing. Gig workers also give employers access to innovative ideas and workforce diversity that would be more difficult or expensive, or impossible, to obtain through traditional employment arrangements.
The gigification of manufacturing jobs represents a profound change in the relationship between industrial workers and management. Although it offers workers advantages such as working flexible schedules and being allowed to specialize in one area of a company’s operations stead of being a jack of all trades and an expert in none, this less formal work arrangement raises more questions than it answers.
As the structure of manufacturing sector employment relationships continues to evolve amid changes in technology, it is essential for employers to strike a balance between using technology to maximize efficiency and profitability, and the financial well-being of their workforce. If skilled workers have difficulty affording food, shelter, and other necessities, society needs to have a conversation about why this situation exists and how business leaders, workers, policy makers, and the public can collaborate to achieve a mutually beneficial balance between minimizing costs and offering a living wage.