Article (November-2021)

Articles

Gig economy will bridge the demand-supply gap

Rajesh Rai

Designation : -   Vice President - People Team and Head of Human Resources

Organization : -  GlobalLogic.

01-Nov-2021

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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?

RR Gig economy as a concept has been in the existence in India for a long time. With India's large informal economy ranging from daily wage laborers to temporary farm workers, which is equivalent of gig work that has been in India across rural and urban areas.

With the ongoing COVID-19 pandemic, organisations and employees have been pushed to get accustomed to new ways of working. The increased digitization and platformization has boosted the gig economy. According to BCG, the number of flexi or gig jobs could soar to 90 million in 8-10 years, with total transactions valued at more than $250 billion, contributing an incremental 1.25% to India's gross domestic product (GDP). The increase in the growing young digital young population coupled with the increasing work flexibility, gig work is going to grow in the developing economies like India.

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?

RR The world is transforming at a very rapid pace. The enablement of digitization has accelerated the ways of understanding, implementing, and executing things more than ever. The pandemic has also made us realize that the organisations can operate remotely, manage efficiencies, and business productively.

In this day and age, it has become more about flexibility and choices people make. Gig economy is giving the workers the freedom and autonomy for functioning in a role as per their need and convenience. This greater flexibility gives the gig workers control over their schedule as compared to regular jobs. It also comprises of students pursuing higher education and are in a need of some extra income. These students are in need to supplement their education with actual work experience to develop skills for their future jobs. They are willing to take up roles that can be managed with education. Apart from enabling people to generate extra income to support themselves financially, it also gives them the sense of independence and exposure, which can help them build a career in the longer run.

Therefore, the increased work flexibility, extra income, better control of schedule are factors motivating workers in embracing gig economy.

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?

RR India has a young population that is enthusiastic about the opportunities that the future brings. As per a report by ASSOCHAM, India's gig sector is expected to increase to US$455 billion at a CAGR of 17% by 2024 and has the potential to expand at least 2x the pre-pandemic estimates.

India also has the world's third largest startup ecosystem which is rapidly growing. Hiring full-time employees with fixed salaries can lead to high fixed costs for startups. Therefore, startups are more open to hire skilled freelancers on per project basis to support non-core work requirement. The EdTech sector currently employs ~90,000 people, which will significantly go up as the demand for online education services continues to grow exponentially. In addition to the traditional gig roles, organisations are actively looking for gig workers in HR operations, customer support, transactions/operations processing, marketing & sales, software development, IT support, graphic design, etc.

MNCs and large corporates are also reaping the benefits of the flexi-hiring options to reduce operational costs by hiring gig workers for niche projects. This has further diversified the employment opportunities for gig workers and has given organisations liberty to manage the workforce effectively. The large talent pool enabled by technology skill set and the ability to work across geographies is making India globally competitive.

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