The digital revolution has brought about a significant shift in the global workforce, transforming traditional employment structures. One such phenomenon is the 'gig economy,' a term coined to describe the growing trend where individuals and businesses provide temporary services or freelance work for multiple clients. This dynamic work environment offers exciting opportunities for Small and Medium Enterprises (SMEs) in Kenya.

Understanding the Gig Economy

The gig economy is characterized by short-term contracts or 'gigs' that are project-based, offering flexibility to both employers and workers. According to a report by Statista, the gig economy in Kenya is projected to grow at an annual rate of 20.5% between 2021 and 2026.

Benefits for SMEs

• Cost savings: By hiring freelancers or temporary workers, SMEs can control labor costs more effectively. This is particularly beneficial during periods of fluctuating demand.
• Access to specialized skills: The gig economy provides access to a diverse pool of skilled professionals who may not be available full-time, thus allowing SMEs to tap into expertise that was previously out of reach.
• Flexibility: Gig work allows businesses to scale up or down according to their needs, ensuring they maintain a lean and agile operation.

Case Study: M-Shwari

A prime example of leveraging the gig economy in Kenya is the mobile lending platform, M-Shwari. This service allows users to borrow or save money using their mobile phones. The platform relies on a network of agents who facilitate transactions and earn commissions. By utilizing this workforce, M-Shwari can offer financial services at scale, reaching millions of unbanked Kenyans.

Recommendations for SMEs

• Identify suitable gigs: Look for tasks that align with your business needs and can be completed effectively by temporary workers.
• Vet potential freelancers: Thoroughly check the credentials, reviews, and references of any freelancer before hiring them.
• Establish clear expectations: Clearly define project scope, deadlines, and deliverables to ensure smooth collaboration.