Safeguarding Mental Health in the Gig Economy

Thirty-four percent of U.S. adults are currently involved in the gig economy, and one-third have made independent work their full-time job. Rather than working for one employer on a fixed salary and under strict constraints, many people are finding alternative ways to generate income and using their personal networks to do so. 

Gig work is rising quickly, especially among skilled service workers, and the shift away from the traditional job market is largely positive. Sixty-three percent of independent workers say this was their choice, and 9 out of 10 full-time independent workers say that working on their own has made them happier.

Becoming your own boss can be time-consuming, costly, and unpredictable. Still, offering skills or services on a per-hour or per-project basis gives you the flexibility to set your own rates, work from anywhere, follow an unconventional schedule, and generate more income than a traditional job might offer, which could often result in better work/life balance and improved mental health. 

The Rise of Burnout—and the Need to Pivot

One in four Americans is considering making a change to their employment status, as the Great Resignation continues to rock the traditional workforce. In January 2022, 4.3 million workers gave notice and now, many people are turning to gig work for part-time, full-time, or supplemental income. 

Changes in the traditional workforce have no doubt fueled this decision, as many people are battling low pay, limited advancement opportunities, disrespect in the workplace, challenging caregiving responsibilities, and inflexibility in work hours.

“There was something about the traditional workforce that wasn’t conducive to me,” said Jason Nelson, founder and principal of Apollus Solutions, who joined the gig economy long before it became popular. After college, he went to graduate school, spent a year in the Peace Corps, and worked across the non-profit, government, and private sectors, before going full-time freelance in 2018. “It was the best career decision for me.”

Being a freelancer during the pandemic has brought its own set of challenges to Nelson, though, whose revenue nearly doubled within the first year. Facing anxiety and burnout, he had reached his capacity. 

“What I had built was beginning to feel like a traditional job,” he admitted. So he turned to a business coach and now he’s focused on getting back the feelings he had when he first went out on his own. At that time, there was electricity and joy knowing he had the freedom and flexibility to work from anywhere.

For L'Oreal Thompson Payton, writer, editor, and blogger, working in the gig economy is a little more complicated. She freelanced for 13 years in addition to working traditional jobs, up until she went full-time freelance in 2021. Her company had really good benefits and a maternity leave policy, which she utilized, but she was still unhappy and her mental health was suffering. 

“I had to psyche myself up to take this risk,” she says. “But I’m very fortunate that I had the choice to do so.” And if it doesn’t work out as planned, Thompson said she can always change her mind and go back to a more traditional job.

Challenges Facing Independent Workers

The cons of gig work may often be worth the freedom and flexibility that comes with it. Fifty-one percent of gig workers said that they wouldn’t switch to a traditional job for any amount of money.

As an independent worker, you can choose where and when you work, take mental health breaks as you see fit, and pass on projects that don’t align with your goals or standards. But at the same time, you have to deal with quarterly taxes, health insurance, finding work, paying for your own education or skills-based training, and tracking down payments. The challenges of working in the gig economy are significant as gig workers face their own set of stressors.

Hustle Culture

“We live in a capitalist society, so it’s inevitable,” Thompson Payton said. “[But] I hate it.” 

For years, she had a full-time job and freelanced on nights and weekends, working overtime to get ahead in her career. Now, as a mother and full-time freelancer, Thompson Payton says this way of life no longer serves her. She dedicates each weekday to a different task, such as financial tasks, pitching, researching, and writing, and no longer works late at night or on weekends if she can help it. 

Nelson blocks out one full day on his calendar every week to focus on creating, brainstorming, catching up on work, or simply unplugging. He still works on some weekends, but only by choice—and in the early days, he found joy in working on Sundays because he wouldn’t be distracted by meetings, emails, or requests. 

“With freelance work, there are no limits,” says Thompson Payton, which is a catch-22. You can take time off, as needed, but you can also work beyond the limits of a traditional job and the pressure to do so is high for some gig workers.

No Employer, No Benefits

Independent employment offers many perks to workers, but employer-sponsored benefits aren’t one of them. Non-salaried contract workers rarely get access to employer-matched 401(k) packages, paid parental leave, life insurance, employee discounts, or mental health care—which means conducting research, filling out applications, and making critical decisions on how to allocate your income and resources.

Being married to someone with employer-sponsored healthcare and benefits made the decision to go freelance easier for Thompson, who also lived with her parents after graduating from college, paid off her student loans, and saved $30,000 before taking the leap. 

Not having an employer or HR department to guide you can be challenging, but Nelson hopes to rewrite this narrative and encourage more independent workers to consider their independence as an opportunity to design their own workplace culture and benefits packages. Rather than relying on an employer to make these critical decisions, Nelson says, “I can intentionally design my business to the life I want to live.”

Taking the Independent Path

Deciding which projects to take and which ones to pass is an ongoing battle for many gig workers. With limited hours, you have to decide which projects are worth the labor. Often, that debate revolves around compensation, but not always. Some projects promise additional work opportunities or reaffirm your expertise, but many drain your time and resources.

“Every time I turn down an assignment, I think ‘I could do it, I could make it work,’” said Thompson Payton. “That default mindset is ‘I need to get paid.’ But at what cost?”

While he chooses to meet with every prospective client, even if he’s at capacity, Nelson said, “There’s a particular power in saying ‘No.’” Now, he asks himself, “Who are the types of clients I want to align with?” If they don’t align, then Nelson passes on the opportunity.

Saying “no” doesn’t always feel like an option, though. Some gig workers take any opportunity that comes their way. Without regular hours and pay, they may not know when the next opportunity will arise and therefore sacrifice projects they enjoy for projects that pay. The unpredictability of the work can lead many gig workers to reconsider traditional work, too, even if they never plan to return.

Inconsistency

As an independent worker, you can make six figures or more—and in 2021, 3.8 million independent workers did—but there’s no guarantee that you will.

Independent work often rises and falls with the economy, the season, or simply the project. Inconsistency of work and pay is often a concern for gig workers, and yet two-thirds of full-time independent workers say that working independently is more secure than having a traditional job, likely due to the fact that you can take on more projects if needed.

You have the potential to earn more as a gig worker, depending on your skills or services, but you still have to handle invoicing, budgeting, paying taxes, and managing various other obligations, including legal responsibilities. This may be, in part, why 45% of full-time gig workers have a high Economic Anxiety Index score compared to 24% of traditional full-time employees.

Allocating Resources to Mental Health Care

Not working a traditional job means you don’t have access to mental, behavioral, and well-being packages, which may come with free mental health apps, discounts on mental health services, and free telehealth resources. Therefore, it’s up to the gig worker to develop their own comprehensive plan that fits within their own personal budget.

When she left her full-time job, Thompson Payton said her therapist didn’t accept her new insurance, so instead of canceling her sessions she simply reduced their frequency to account for the higher costs. It’s “well worth it,” she said. She also pays for subscriptions such as Insight Timer, Shine, and Peloton. 

“What are those things [you] want to have access to?” said Nelson. It may include a gym membership, therapy resources, or working with an executive coach. “Start thinking about what type of workspace and environment you want to have.” 

For most gig workers, community is an essential element, and one that contributes to better mental health. There may be a misconception that gig workers are lonely because they don’t have traditional colleagues. Arguably, independent workers are deeply connected to their own thriving communities. 

“I have built a large network of colleagues,” said Nelson. “It’s a camaraderie that I never really had in the traditional workforce. I might spend most of the day in the weeds working, but I’m never actually alone… It’s important to have a person, a network, a cohort of folks who can support you in this journey.”

Due to the growing digital workforce and rising community platforms, many gig workers have found community online. In fact, there may be more opportunities to connect in the gig economy than in the traditional workforce, since you’re not obligated to spend time or collaborate with colleagues you may not align with, and can access more platforms, including social media apps. 

The potential for success in the gig economy is high. In the next five years, MBO Partners predicts that 50% of workers will have been or will be independent. This shift in the workforce will no doubt change the way work is evaluated, performed, and valued—and will hopefully change the way individuals and employers approach and work with gig workers.