What reasons do you see behind the phenomenal increase of gig economy in India? Is it a temporary boom or will last long? Is it going to replace traditionally hired workforce?
AP In today's parlance, gig economy represents a system where companies and freelance workers come to an agreement to engage in short-term work relationship. This system benefits both the parties and is steadily gaining momentum. It not only enables organisations to save on overhead costs like office space and equipment but also gives them greater flexibility to hire talent for a short term. The gig workers benefit from the flexibility that comes with the choice of work and increase in income by working on multiple gigs. In my view, gig working is here to stay and has come more to the fore with the current situation, which has helped in removing reservations about the workability of gig arrangement. Whether we like it or not, we all have been forced to adopt and adapt to remote working. We have seen and appreciate the advantages that it brings to an organisation in terms of getting the cost down. Organisations are now appreciating and opting to hire more gig talent with the current market scenario. Gig workers also see much advantage with this arrangement as they get greater choice and more areas to showcase their talent.
The increased focus on gig working has also been acknowledged by the government. This is evident in the step taken by Finance Minister Nirmala Sitharaman in this year's budget where she proposed that the gig workers would now be covered by the Employees State Insurance Corporation (ESIC). The budget also proposed to launch a portal that would collect relevant information on gig economy workers. This portal would help formulate relevant policies for health, housing, skill, insurance, credit and food schemes for the gig workers.
So, the future of working seems to be more flexible and without boundaries of single place of work. With the support of government, organisations will be able to provide a more conducive environment for the gig workers to help them achieve their goals. The faster the organisations understand the opportunities of this working arrangement, the faster will be their trajectory of growth. They will be able to attract and take advantage of the available talent of gig workers.
What motivates the workers in embracing gig economy? Is it just for the attraction of flexibility or as a second choice because of compulsion arising out of worsening unemployment situation?
AP The latest generation to enter the workforce is Gen Z. They have proven to have a mind of their own and do not want to be restricted or bound by structure. They look for flexibility and want to be able to work from any place at their own time. With today's situation, the tide has turned in their favour as remote and flexible working works well for them. Not only Gen Z, the earlier generations too have embraced this work arrangement and are happy to have more time with family. As per a study, in the United States, the Gig Economy is growing three times faster than the traditional workforce model with 36% or one-third of U.S. workers actively involved in this work arrangement. Being a freelancer provides more flexibility leaving time for workers to pursue their hobbies and spend more time with family. It provides an opportunity to get diverse experience and networking connections. Companies have to make very important decisions about how to manage human capital through the current Corona Virus (COVID-19) pandemic, including how to deliver on their responsibilities to their employees and customers, as well as their shareholders. Many gig economy businesses have proven to be valuable network enablers at this time, ferrying food around locked-down areas and responding to exceptional levels of demand. However, the pandemic is also acutely highlighting the precarious nature of the gig economy worker-company relationship.
What is the long-term potential of the gig economy could comprise and contribute to turn around of businesses and make India Inc. globally competitive?
AP Countries with high digitization rates and economic development like the US have been the early adopters of gig working arrangement. On the other hand, with a good supply of freelancers and educated labour, developing countries like India have great potential to adopt the gig economy. Technology penetration will play a big role in India's quest for global competition in talent space. India has the opportunity to study and observe the emerging trends in the countries with advanced gig economy and adopt the best practices. Today, India is witnessing the shift due to the following reasons :
- Changing attitude towards work and need for higher independence.
- Increase in the need for supplemental income due to high unemployment amongst the urban youth and increasing cost of living.
- The coming up of digital market place where service providers are skilled in niche areas.
- Rise of professional services - it is a platform convening the demand and supply of services in a gig economy.
- Asset sharing business model that engages gig workers to offer specific services such as transportation, accommodation and delivery. It builds a shared economy for assets and services.
It allows for low-cost asset sharing instead of asset ownership.
The pandemic has accelerated the shift in behaviour for preference towards online and remote services. This has led to an increase in proportion of workforce to become exposed to gig working than traditional employment models. This, with adequate supply of talent will enable India to compete with businesses at the global level.