What is Gig economy?
In a gig economy, temporary, flexible jobs are commonplace and companies tend to hire gig workers instead of full-time employees. Gig workers are independent contractors, online platform workers, contract firm workers, on-call workers and temporary workers.
The start of the gig economy starts all the way back in 1915, when jazz musicians coined the term “gig” to refer to performances.
Usually, the roles in which gig workers are most hired in are, Computer and IT professionals, content creators, Software developers, Project managers, administrative professionals’ and educators / trainers
According to the Bureau of Labour Statistics (BLS), as of May 2017, there were 10.6 million independent contractors (or 6.9% of all U.S. workers). The same survey also found that less than half of those workers rely on gig work as their primary source of income.
The result of a gig economy is cheaper, more efficient services, such as Uber or Airbnb, for those willing to use them. There is a greater flexibility to both employers & employees and businesses also save resources in terms of benefits, office space and training. Cities tend to have the most highly developed services and are the most entrenched in the gig economy.But it also has its share of its challenges as it is a largely unregulated phenomenon, thus issues of job securities, fewer benefits for employees’ creep in. Regardless, Gig economy is here to stay for the good, with the changing scenario of remote-workplace scenario due to the prevailing pandemic and it’ll definitely have a greater impact in how India and the world shapes up
Gig Economy in India vs Gig Economy in the World:
As Freelancing and the Gig economy trends are on the rise, countries around the world are helping both companies and freelancers get the best business engagements for themselves.
Global Gig Economy is expected to grow from $204 billion in 2018 to $455 billion in 2023, a Compound Annual Growth Rate (CAGR) of 17.4%.
The top 10 countries in Payoneer’s Global Gig-Economy Index for 2019:
India constitutes about 40% of the freelance jobs offered globally, with 15 million skilled professionals fuelling the ever-so-increasing demand of contract-based jobs or the freelance industry.
As per the results of the Online Labour Index*, the information technology and software industry were the most targeted in terms of a gig economy in India.
This was further established when PayPal surveyed and published gig economy insights about India, and found that gig economies dominated the information technology domain, with 50% of the freelance workforce engaged in this sector.
*(Online Labour Index, which was published under the iLabour project of Oxford University, presented the online gig economy equivalent of conventional labour standards by analysing availability of online labour across different countries in various fields)
Implications for HR in current scenario Gig Economy
The rise of gig work means the focus for HR will be finding tools to bring together the talent lifecycle across all the roles in your business (contingent and regular workers included) together with organizational effectiveness to understand and optimize structure and plan. Finding the optimal mix of regular employees and alternative workers will be a critical task for HR leaders over the next decade. Other implications for HR include:
The redefinition of roles. The staying power of the gig economy means it’s time to rethink how work gets done. Freelancers may not fit precisely into the whole job of a caregiver or retail sales associate, but the opportunities to find talent become clearer when you see work as a series of tasks that can be shared, rather than a single job completed by one person.
Evaluation of gig worker impact. Unlike traditional employees, systems that track a freelancer’s employee lifecycle are relatively new. In order to measure the impact these kinds of workers have on the business, it’s essential to connect this data to your other workforce systems, so you can spot issues, trends, and opportunities.Updating traditional labour policies to incorporate freelancers. As gig work becomes more deeply rooted in hourly labour, HR will need to lead the charge in creating policies that provide proper benefits, rights, and protections to these workers.
Following tips can prove insightful to set your organization up for success:
Deconstruct jobs in your organization
To see where you can tap freelance platforms to alleviate work shortages, start by deconstructing the job into its tasks. This exercise will lead you to re-evaluate not just the nature of that job and the kind of talent needed to accomplish it, but the different types of arrangements—including contracts, gigs, alliances, volunteers, automation, etc. that can be used to create a more fulfilling career path for all involved.
Build in measurement systems to better analyze gig work.
When gig work data is combined with multi-dimensional analysis that combines information from several systems, you gain powerful and actionable answers that will help you design the best programs for all your employees—and make a better impact on business goals.
Look for robust analytics platforms that have insight and value paths for contingent labour analysis, hourly, seasonal workers, contractors, etc. and connection points to business outcomes to understand impact. They can bring together the talent lifecycle across all the roles in your business, together with organizational effectiveness to understand and optimize structure and plan
Pilot a test program.
If you’re ready to try incorporating gig work into your labour force, it’s important to conduct your due diligence. Once you know the scope of your test project, involve your partners in Legal, Compliance, IT, and Finance to find out what infrastructure and policies should be in place for gig workers to come in and accomplish the necessary tasks.
Future of gig-workers in the Indian Scenario
With the onset of the COVID-19 pandemic globally, there has been a paradigm shift in the way we work. The future of work has begun moving from the physical office models towards the remote and virtual models. Added with the massive layoffs and mandatory stay-at-home directives that had been issued by all organizations, International Labor Organization estimated that approximately 400 million jobs were lost worldwide during the second quarter of 2020. Despite the dynamic employment scenario that had been created as a result, people who wanted to work from home realized this was their silver lining moment. With job security in strain, the trend of free lancing picked up at a rapid pace.
With a 46% rise in new freelancers from Q1 to Q2, 2020, several factors including internet penetration, digital boom, emerging start-up boom and new and disruptive technologies have moulded and influenced how work is done in India. Another major factor tipping the scales in favour of freelancing work being done in India is the low pay scale for regular jobs. India, today, stands second in terms of freelancing marketplace with an estimated 15 million freelancers, after the US.
Even a change in the city-wise pay scales has led to a competition with one another and can be seen when a large enterprise announces its willingness to outsource projects for a new office or a major hub. Digitization has led to large enterprises branching off in Tier 2 cities, leading to a growth in employment and freelancing. Since more and more enterprises are embracing the concept, the time is not far when corporates will compete to provide the best work environment for freelancers.
Of those freelancing in India, 60% are under the age of 30, eschewing the full-time life for the freedom of working on their own terms. If there was ever a time to hire without fear of full-time contracts, this is it. We have witnessed a good percentage of young professionals moving from their regular nine-five desk job to working as a freelancer which is not surprising when you consider the growth rate of the gig economy.
With the government having engaged gig workers in the past for its flagship projects like Digital India, Swachh Bharat, and Smart City campaigns, it is evident that the freelance economy is a shared, on-demand model where freelancers can take up multiple gigs at the same time. What was once thought off a refuge for the unemployed, is now a go-to option for many.
The CMIE, a company for business and economic database research conducted a survey which showed there are approximately 31 million unemployed Indians who are looking for a job of their choice. In such a scenario, while gigs would offer them scope for flexibility, employers would be keen to give out such projects to the experienced lot.
While on the topic for demand-supply graph, employers often complain that there are not enough skilled workers and others don’t find something appropriate. For a case similar to this, hiring a gig worker on a short-term basis for a project or fixed term would not only provide better return on investment, but also work opportunities to seekers filling up the supply-demand gap.
The benefits for freelancing workers far outweigh the costs. We could talk about the cost effectiveness or the easy availability of such individuals but this is a good platform to highlight that gig-workers bring in domain expertise who are better equipped to handle and prepare for dynamic market changes. Hiring such individuals also leads to instant productivity because freelancers are not likely to indulge in a buffer period to ‘settle in’ to a company. Instead, like the company itself, they will be focussed on getting the project done within the deadline.
A McKinsey report states that the freelance industry is estimated to grow to $20 to 30 billion by 2025 in India. Ultimately, freelancing in the Indian economy is here to stay and grow, and is on its way to become the new normal for how businesses work, globally.
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