What is the Gig Economy?
It is a labor market characterized by the prevalence of short-term contracts or freelance work instead of permanent jobs. The demand of the consumer is met by a service provider, i.e. a gig worker who can perform that specific task. In this economy, tech-enabled platforms connect the consumer to the gig worker to hire services on a short-term basis. Gig workers include self-employed, freelancers, independent contributors, and part-time workers. In simple terms, a shift from a full-time 9-to-5 job to an on-demand, freelance, and task-based economy can be termed as the gig economy.
The gig economy currently more prevalent in US, Europe, and India, is expected to bring transformational changes to traditional HR practices around the world, where gig and the traditional economy will thrive together. India with the uprising gig economy has the potential to become the top freelancing and crowdsourcing hub in the Asia region due to urbanization of the workforce.
Global Trends in Gig Economy
The digital Gig economy generated a gross volume of approximately $204 billion 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 and generate a gross volume of approximately $455 billion by 2023
Startups powering the gig economy hire talent across technology, marketing, finance, and HR on freelance or need-basis. IT companies are opening roles for moonlighters, freelance consultants on non-mission critical parts of projects, or as part of larger development efforts on a one-off basis. The gig economy can be the answer to talent supply chain challenges faced by professional or technology sectors. While critical roles would still be in the realm of regular employment, freelancers can reduce the burden on the supply chain, increase operational efficiencies, and reduce project costs.
Trends in Indian Gig economy
India has emerged as the 5th largest country for Flexi-staffing after US, China, Brazil, and Japan. Haryana, Madhya Pradesh, Andhra Pradesh, Gujarat, and Telangana have most opportunities in terms of growth for the Flexi-workers
The number of workers being hired as freelancers or contract workers has risen from 20 percent to 25 percent in the contingent workforce in the past two years
This points to the rise of the Gig or Flex Economy. More Indians are opting for a flexible style of work, one that lets them remain in control of their time and allows them to work when and how they want.
A report on the future of jobs in India by FICCI, EY, and NASSCOM, states that with a 24%share, India is leading in terms of online labor market globally. Further, a study by KellyOGC titled “Workforce Agility Barometer” reveals that for 56% of the Indian firms, the proportion of temporary workers is more than 20%. The numbers are into rising with more than 71% of organizations hiring more contingent workers.
The union budget 2020-21 has also proposed one-year long internship opportunities to engineers in urban local bodies, which shows Indian governments’ interest in this economy
Mr.Debjani Ghosh, country director, World bank has propounded a definite growth of a Gig economy pointing out that COVID 19 pandemic is going to change workspaces forever, and is likely to open up many opportunities for women.
Evolving Workforce Culture
An inclination towards flexible work is being driven by factors such as freedom, technology up-gradation, skill focus, additional income, and human capital. Gig economy allows task ownership, convenience, and flexibility. Service seekers are moving towards a gig economy for reasons such as cost-cutting and skilled workforce. Corporates find it cheaper to employ freelancers to perform specific tasks by avoiding the traditional administrative and compliance costs associated with regular employees.
The growing prevalence of independent work could have tangible economic as raising labor-force participation, providing opportunities for the unemployed, or even boosting productivity.
Consumers and organizations could benefit from the greater availability of services and improved matching that better fulfills their needs.
A big challenge of Job security, stability, the certainty of a job arises
No basis for financial credit services as a steady income is not assured
Independent workers and traditional job holders alike will have to become more proactive about managing their careers as digital technologies continue to reshape the world of work.