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Minnesota’s ‘gig economy’: not just for artists and uber drivers anymore

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The closing of the Eden Prairie-headquartered Golf Galaxy nine years ago marked a turning point for Rick Nordvold, ending a successful career with the golf goods retailer.

But that didn’t happen until he led the company through its initial public offering process and its sale to Dick’s Sporting Goods in 2007. The sale left him with two options: to move to Dick’s headquarters in Pennsylvania to take over as chief financial officer or to pass it up and stay in Minneapolis with his family.

He chose the latter.

Over the next few years, Nordvold would go on to hold executive-level position for two different local companies, neither of which actually lasted very long. His first post got eliminated as the U.S. economy sank into recession in 2008, and he walked away from the second one because the company didn’t need a CFO anymore.

Later, as he weighed his options in securing another senior-level post in the Twin Cities, Nordvold became aware that Minnesota had limited opportunities available for executive professionals like him.

So he became part of the so-called “gig economy,” the emerging workforce of people who work on a contract or a project basis to provide services to multiple companies at the same time — a group of nearly 54 million independent workers (aka freelancers) that’s expected to account for 40 percent of the U.S. workforce in the next three years.

In Nordvold’s case, he began his independent work in 2010 by working for three different companies, each of which needed just a fraction of the work of a full-time chief financial officer.

When Nordvold first joined the gig economy, however, it didn’t take him long to notice one unpleasant obstacle: how hard it was for talented freelancers to connect with companies — and vice versa.

The state of gig economy

The gig economy is hardly new to the U.S. economy. In fact, it’s been around for decades, though it was especially common among designers, artists, authors and journalists — many of whom are self-employed, with incomes coming from multiple sources.

But today the gig economy is everywhere, with independent workers in nearly every profession, even those that were once the domain of high-paying professional careers. The Freelance Union puts the number participating in the gig economy at 34 percent of today’s labor market, a number that is expected to grow to 40 percent come 2020.

That’s because the U.S. economy is essentially leaning toward contracting, said Alan Benson, an associate professor at the University of Minnesota’s Carlson School of Management. “Organizations used to do everything themselves,” he said. “Now, they’re moving toward doing what they’re good at, and outsourcing everything else.”    

Not all independent workers, however, get into the gig economy for the same reason: Some, with traditional 9-to-5 jobs, pick up freelance gigs here and there after shift to earn extra bucks; others pursue it on a full-time basis.

Many of those freelancers like their project-based gigs. Citing a 2016 report by McKinsey Global Institute, Nordvold noted that independent workers — like him — maintain a “higher level of satisfaction” in the gig economy compared to their counterparts with traditional jobs.

“I can speak here firsthand,” he said. “The variety of it is fun; the flexibility of it is fun; and it really enables me and my colleagues to really pursue opportunities that we’re passionate about.”

That sentiment was echoed in a Harvard Business Review report, indicating that some of the country’s most educated workers — attorneys, financial executives with MBA degree — are increasingly joining the gig economy.

Making connections

It’s only recently that researchers and government agencies have attempted to track this portion of the economy, though. And their findings revealed several challenges in the gig economy workforce.

The biggest one: Securing enough contracts or projects to piece together a steady income, a challenge that Nordvold experienced when he first joined the gig economy in 2010. “I enjoyed it,” he said, “but doing it on my own was difficult.”

A couple of years into his new life, Nordvold realized he wasn’t alone in his frustration, that many other freelancers with extensive experience in finance struggling to find meaningful work — even in industries where companies need workers.

So he founded a one-person firm connecting freelancers and employers, a company he merged last year with GO Intellectual Capital, another firm that initially worked with freelance marketing professionals. Today, GO has 36 senior independent contractors working for nearly 100 companies as finance, accounting and marketing consultants.

Justin Royer, who held executive leadership roles in several Twin Cities companies — including Golf Galaxy, Griffin International and Periscope — is one of the contract employees with GO, where he serves as chief marketing officer for a local sporting goods equipment company.

Royer, who joined the gig economy two years ago after two decades in the traditional workforce, said that he chose to work as an independent contractor for its flexibility and to “be a little bit more purposeful” about what he does and who he wants to work for.

He has seen many people leaving their jobs for the same reasons. “In terms of a choice, it’s getting more popular by the day,” he said. But there are also other reasons why Royer and others are embracing the way of working: “I do it because I think it’s a necessary skill for the future. The future of work is kind of headed in this direction.”

That’s, in part, because companies have dramatically reduced their workforce since the Great Recession. As a result, Nordvold said, so many corporations don’t have enough employees to take on new growth opportunities. “They have the money to do it,” he said. “[But] they don’t have the talent to do it because the people that they have just can’t take on new projects anymore.”

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Comments (1)

  1. Submitted by Frank Phelan on 02/12/2017 - 12:24 pm.

    Re-inventing the Wheel

    Let’s not re-invent the wheel here. There has been a thriving gig or free lance economy operating successfully right under our noses for decades. These freelancers are your neighbors, they buy homes, own lake cabins, and even have good medical insurance. After years of freelancing, they even retire with a comfortable stream of income.

    Have you what it is yet? It’s the union construction industry. If one plumber works 1800 hours in a year for one employer, and another plumber works 1800 hours for 3 or 4 or 5 contractors, their incomes and fringe benefits will be the same. Employers pay set rates for each hour worked into pension funds, medical funds, vacation funds, etc. No taxpayer dollars are involved.

    In return, contractors know they can bid for work. If their current 10 or 12 pipe fitters will not be enough to staff all of the bids the contractor has won, the contractor can fax the hiring hall for more help. When work slacks off, the employer lets go of however many employees they no longer need.

    Last year, there was a unorganized contractor that won several big solar jobs. The choose to not access labor through a union hiring hall, and as a result they were unable complete the work and lost the contracts.

    The system is a win-win for these freelancers and the employers that need then on an intermittent basis.

    In states where the government has inserted itself between employers and their workers via right to work for less legislation, this efficient system has been seriously harmed.

    So the gig economy isn’t new, its been here all the time.

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