Article (November-2021)

Articles

Opportunities in the Gig economy know no boundaries

LS Murthy

Designation : -   COO

Organization : -  Radiant

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?

LS Gig workers engage as short-term, temporary, freelancing or independent contractors for either one or more of employers with varied payment terms unlike the traditional employment engagement with the chosen organisations/sectors/industries. An inclination towards flexible gig work is being driven by factors such as freedom, flexibility, technological advances, skill focus, cloud sourcing, additional income and human capital transformation.

Gig Economy allows task ownership, convenience and flexibility. Emergence of attractive start-up culture, rise in freelancing platforms, MNCs preferring contractual employment possibilities for cost optimisation, lowering the traditional administrative and statutory compliances costs associated with regular employment and recruitment & selection process. Gig economy, emerging as a work engagement where on one side, there is a service seeker with a demand for a specific task, and on the other side, there is a service provider who has the expertise to perform that specific task. This project-based gig economy allows the service adopter to minimize overhead costs.

The history of gig economy is as old as formal economy, however its influence on India's labour market has increased tremendously in recent years with the success of platform-based companies. Gig work is not a new concept in India. With its large informal economy and casual & contract workers segment, India has always had the model equivalent of gig work across urban and rural areas, from temporary farm workers to daily-wage construction workers and infrastructure development project workers, seasonal industries like Sugar factories and highly labour-intensive companies like Steel and metals foundry moulding units, furniture manufacturing, jewellery & hardware export units etc have on demand project specific temp staffing practices.

Gig economy is among the most widely used terms in the business world today. While gig work, broadly defines, work delivered on-demand with little to no formal contracting has gained momentum faster with the success of platform-based companies such as Ola, Uber, Zomato, Swiggy, Urban company and the fast-growing online ecommerce companies & internet accessibility services. The gig economy benefits employers, employees, as well as the economy at large with gains extending beyond the traditional notions of convenience and on-demand availability and flexibility to both individual and companies. Today, over 200 million people are considered part of the gig workforce globally. Research studies indicate that participation in the gig economy is higher in developing countries versus developed economies and most of these jobs are in lower-income job-types such as deliveries, ridesharing, care and wellness and few select white collar jobs with niche skills. The gig economy has got boost during pandemic times and as per economic survey 2020-21 India has become one of the largest markets for flexible staffing in the world due to the adoption of e-commerce, digitalisation of economy, increase in commercial platforms and access to smart phones.

The digital gig economy generated a gross volume of approximately $204 bn from worldwide customers in 2018. Transportation-based services contributed to over 50% of this value. The size of the gig economy is projected to grow by a 17% CAGR. India has emerged as the fifth largest country for flexi-staffing after US, China, Brazil and Japan. It has the potential to service up to 90 million jobs in India's non-farm economy alone, transact over USD 250 billion in volume of work, and contribute an incremental 1.25 percent to India's GDP over the long term. The gig jobs are bound to increase in the coming years according to Boston consultancy group, the gig economy will comprise both existing jobs that will migrate to gig platforms as well as new jobs that will be created as a result of better market transparency, greater efficiencies in delivery and growing demand.

The gig economy has been on the rise and is expected to beat the pre-pandemic estimates, contributed hugely towards the resurgence of economic growth. The long-term employee benefits still retain the rigor and reward which attracts permanent jobs in specific sectors. The pandemic has in fact only accelerated the trend positively. India currently has a pool of about 15 million freelancers staffed in projects across IT, HR and designing. India's workforce is growing by approximately 4 million annually with millennials showing an increasing preference, this trend is expected to significantly grow in the near future.

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?

LS Predominantly, the gig workforce is driven by the opportunity to work on their own terms. The flexibility and freedom that comes with working for multiple companies are attractive for many. These gig economy workers are driven by a range of motivations, from desiring to have control over their schedule and more time for themselves to manage their personal choices.

Gig workers indicate that they could live much more comfortably with the additional income and cherish the option to pursue passionate goals and at times preparing for alternate careers. While gig work is a necessity for some, it is a luxury for others. Diversified perspectives and individual preferences and possible opportunities influencing the growth.

Pew Research Canter Survey states that most individuals preferring to be involved in the Gig Economy because they found it fun and they wanted to do something with their spare time. Being a Gig worker job offers in the Gig Economy doesn't necessarily require strict hiring qualifications for as long as you can provide quality service per agreements then you can earn additional money. Freelancing opportunities provide flexibility in schedules leaving more time to pursue other interests in hobbies, spending time with family or learn new skills or enhance qualifications and acquire certifications, strengthening the profile for future jobs.

Opportunities in the Gig Economy know no boundaries. It also promotes remote work which allows individuals from different continents to have a job even as a part-timer. It's huge motivating factor why Gig work is booming. It also provides valuable experiences and valuable networking connections, which are both great if you are looking for a diversified portfolio. The different projects that you can work, enhances organisational skills, adding to your list of transferable skills that employers look for a big value add. What was considered a fringe employment model has now become rewarding mainstream option.

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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?

LS The gig economy has been a driving force in shaping the future of work. Its characteristic of unique or no employment relationship upends the traditional ways of working in many ways; since there is no employer-employee relationship but for the short-term contract specific association. It appears as though the organisations may not go back to the time consuming, traditional process of hiring talent or even working wholly with full-time employees, as having a pool of gig workers mix with regular teams is more cost-effective for business houses and India is no exception.

The unimaginative pandemic crisis has on the one hand led to large scale loss of jobs across both service and manufacturing sectors. On the other hand, it has enabled the development of a gig economy and the resurgence of economic growth and jobs creation thanks to India providing strategic ease of doing business policies attracting global organisations and government's "Make in India" promotions and boosts of competitive talent pool.

A research report by ASSOCHAM indicates, 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 is likely to have 350 million gig jobs by 2025, presenting positive outlook and a huge opportunity for job seekers to capitalise and adapt to the changing work dynamics.

A number of digital platforms have been developed that match and map people to jobs. These platforms represent technological evolution. One may easily find a job that fits their experience and interests from sites like Upwork, one of the largest freelance marketplaces in the world.

In these times when technology is enabling disruptive innovation at an unprecedented pace, it is safe to assume that innovators can always find a way to turn a problem into an opportunity and Gig economy is here to stay and the mindset swift is huge bonus to the great talent with competitive competencies and capabilities to deliver world class services and that has been well recognised and appreciated globally, significantly in Information Technology space, Silicon Valley to all innovation hubs. The gig economy has the potential to serve up to 90 million jobs in the non-farm sectors of India (around 30%) with the potential to add up to 1.25% to India's GDP through efficiency and productivity gains alone per BCG published report. Gig economy in India possibly succeed in the top four largest industry sectors - Construction, Manufacturing, Retail, and Transportation and Logistics could alone account for over 70 million of the potentially gigable jobs.

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