Gig Economy – A Local Reality
Gig Economy – A Local Reality
- iConsult India
- Human Resources
- January 3, 2021
Building and maintaining economies is an extremely complex task with immensely delicate yet somehow strongly forged intricacies and interdependencies. The un-foreseeability of the future today, because of the ongoing global recession and the pandemic has invariably transformed stakeholder behaviour in the market. Where corporate moguls once greatly relied on long term planning, contingency planning is now rapidly catching on. This, coupled with a few more factors, has led to the popularisation of the term “Gig Economy”. The word “gig” was coined in 1915 by jazz musicians to describe performances. Today, it has been adapted to a greater meaning. Gig economies consist of people working on small tasks or “gigs”. These gigs can be anything from conducting research to coding a software. A gig worker can opt to work on either an hourly or a project basis. Once the task is complete, the worker moves on to the next gig. Gig economy came to the forefront as a mass-influencer in 2009 post the sub-prime crisis when it became hard for people to find permanent jobs. More and more people started relying on short-term project-based work. Uber, AirBnB, Swiggy, etc are the pioneer firms in promoting gig workers to make a living out of temporary engagements.
This growth is mostly owing to the following factors:
- Increased flexibility and control over one’s own life, time and passion.
- More cost effective as it may not be possible for companies and start-ups to afford skilled professionals as full-time employees.
- Gig workers can be accommodated temporarily, according to the customer requirements or business needs, leading to savings in administrative and compliance costs.
- Increasing diversity in the workforce has become easier with flexible, work from home models which enables people of different strata of the society to find employment.
- Corporates have the freedom of hiring experts for tasks that may not be required on a regular basis.
What started in 2009 is today an answer to many of our contemporary woes. India constitutes about 40% of the freelance jobs offered globally, with 15 million skilled professionals fuelling the gig industry. India saw a 12% rise in gig workers and a 115% increase in work-from-home gigs in the Covid-19 era. However, despite the stated benefits, the blurred lines around the definition of a gig worker may create some confusion. For instance, one might think that gig workers are the same as freelancers. But in 2017, the then Manpower Minister of Singapore, Lee Sim clarified that the two are in fact different. Gig workers may or may not work under an employment contract. Hence, they may or may not be the hiring company’s employee. But freelancers like to operate on service contracts. Which makes them self-employed. So, it can be concluded that while every freelancer is a gig worker, not every gig worker is a freelancer. With such a wide diversification, one can imagine the kind of challenges that managing a gig economy can present.
Some of the disadvantages of gig workers are:
- Continuity of operations is put at risk if the employee turnover is so high and dynamic. Plus, maintaining a corporate culture becomes challenging.
- The extra cost of on-boarding and training new workers ever so often can create budget constraints and can complicate forecasting.
- Under the lack of compliances, gig workers may create problems in HR audits, manpower planning and other strategic initiatives.
- Working at odd hours for multiple jobs may not be everybody’s cup of tea. It may lead to burnouts and lack of motivation.
- It can be challenging for corporates to enable employee mobility and collaboration amongst a dynamic workforce.
Gigs have been catching momentum globally, amongst both blue-collar and white-collar workers. For those curious about its applicability, some broad job areas affected most are as follows:
- Content Creation
- Computer and IT
- Software Development
- Accounting and Finance
- Project Management
- Administrative (Eg: Virtual Assistant, Pharmacy Technician, Design Administrative Assistant)
- Education and Training
- Drivers, Contract Labours, House Helps, and other blue-collar workers
While all this sounds very interesting, there’s a flipside to this coin. According to John Bluedorn, a senior economist at the International Monetary Fund, youth inactivity in India is at 30%, the highest amongst developing countries. ASSOCHAM predicted in January 2020 that India’s gig economy will grow at a CAGR of 17% to $455 billion by 2023. To achieve the same kind of growth in the shadows of Covid-19 and the subsequent nationwide lockdown, a thorough revaluation of the gig ecosystem is mandatory. The labour legislations in India currently are primarily regarding solving the challenges that the organised sector faces. This is not enough. New statutes need to start focusing on the gig economy, taking into account the growing strength of such workers. If statutes start to extend social protection to gig workers as well, it will solidify the foundations. As all the world leaders today agree, the youth is the largest party in building and sustaining any nation. The youth is also the first to embrace gigs. Law makers need to identify this and empower the youth today so that the transformation to a gig economy can be smooth. Compliances and legal protection need to be put in place. Education and training have to be restructured to accommodate project-based job offers. Conventions of permanency and job-stability need to be revised to have a more dynamic approach towards life. And most importantly, all of us as a nation have to accept that gigs are an inevitable truth of the future which needs nourishment in the present to thrive.