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?
SG The world has seen a Technological Revolution over the last decade, which is primarily led by the growth in start-up eco-system in India. These start-ups primarily focus on ease and convenience to consumers through mobile apps, and hence have seen a tremendous growth especially during the pandemic.
The millennials are highly fascinated with such initiatives, as it provides them several unconventional job opportunities through contractual assignments or freelancing, and ways to make quick money, sometimes without a professional degree. The organisations are also looking at contractual employees, who are good at multitasking and possess multiple skills, as hiring full time employees lead to additional fixed costs and expenses.
The pandemic has made organisations to strategize their thought process and reduce operational expenses, and gig economy provides them that opportunity through hiring flexibility. During pandemic, there has been a steady increase in the workforce employed under gig economy and this change is here to stay for long.
As per a recent report by ASSOCHAM, India's gig economy is expected to increase to $455 billion at a CAGR of 17% by 2024 and has the potential to expand to 2x the pre-pandemic estimates. In another estimate, India is likely to have 350 million gig jobs by 2025, presenting a huge opportunity for job seekers to capitalize and adapt to the changing work dynamics.
Long term, gig economy would work hand in hand with the traditional mainstream jobs, as all organisations would need a certain % of employees to be fully committed and dedicated to them.
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?
SG As part of conventional working model in the private sector, individuals typically have a hectic work schedule and not much of work life balance. Individuals need to follow certain discipline and style of working as per the corporate governance model in place. While in gig model the individuals get the flexibility to work as per their convenience. Since individuals are on contract, they are free to switch the jobs easily or take up multiple responsibilities at the same time. A gig worker can decide to take up a job that interests him the most and is in line with his skills and growth potential.
The Covid pandemic in 2020 forced several businesses to slow down and trim various fulltime roles permanently, to reduce the financial impact on them. This paved the way for contractual gig workers to step in, as it worked out better for the organisations to hire them and save on fixed costs related to office space, health benefits, etc.
The pandemic has caused a shift towards digitalization and has opened several job opportunities for millennials, specifically the blue and grey collar workers. The availability of online platforms has made it easy for the gig workers to enroll and adopt these platforms as per their skills. There is freedom from a typical corporate structure (hierarchy), flexible working hours, remote working, work life balance, etc. The floodgates are open for gig workers with no education or knowledge barriers. The online platforms have increased their reach and ability to serve a wide range of customers.
On the other hand, certain individuals have switched to being a gig worker out of compulsion, as they lost their permanent job due to various reasons.
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?
SG Over the years, gig economy has seen a meteoric expansion across the world but has raised questions about its viability as an economic and livelihood engine that can be sustainable in the long run. The benefits and advantages provided by gig economy are humongous, as it embraces people with different skill sets. It is easy to take up a gig worker job as a driver, food delivery or a courier delivery, repair works, etc. with minimal additional investments for a livelihood.
The gig economy, well aided by mobile app-based platforms, could potentially catalyze the economic recovery, as it provides more job opportunities to the masses. It has also given avenues for women and students to earn and contribute to their respective families when needed.
The gig economy has always existed in the past but has now given a more formal meaning to the unorganized sector, MSMEs and small-scale industries. The ecommerce platforms like Flipkart, Ola, Swiggy, Urban Company, Dunzo, Porter, etc. have provided several job opportunities and have helped Indian economy to grow. Some of these new age companies are already unicorns and are popular and recognized across the globe.
It is imperative that the organisations need to keep the gig workers motivated as they contribute a lot in the growth of the organisations (and country's economy), while making a livelihood for themselves. They need to be accepted and covered under some benefits which are common to permanent roles. Benefits like health care, life insurance, paid time offs, etc. would further help in increasing the productivity and improving the economy.