The Rise & Challenges of Gig Economy in Current Scenario
The GIG economy has become mainstream much sooner than expected. It got a thrust with the introduction of internet-based aggregator services like Uber, Zomato, Ola, Meru, and Airbnb.
For a recognizable reason, the crisis has intensified the exposure and acceptance as the primary business models have been jeopardized in some bewildering ways. Organizations are already focusing on “immediate wins” to recover and thrive in a given crisis. Companies have strategically started evaluating the benefits of an alternative/ shared/ gig employment workforce model.
According to Deloitte’s ‘Future of Work Accelerated’ report, three in five organizations (60%) consider increasing the share of gig workers as others reduce dependence in favor of a full-time workforce.
With remote work as the only option for most organizations, the gap has further marginalized, and gig workers have magnified opportunities. There are numerous reasons to support this evident rise of the gig economy. To state a few:
- Digital transformation: The immense growth and rapid adoption of technology have attributed to the dramatic expansion of the gig economy trend. Technology has converged the way of working to mobile and has removed all geographical barriers.
- Quick solution: The short- term skilled labor& temporary needs at the right time forms the base of the gig model, and that’s gaining prominence because of the accelerating demand for the changing current and future developments.
- Competitiveness: Hire, train, engage, and retain are complex processes. Organizations struggle to find resources depending upon the quantum of work to rationalize and optimize their workforce otherwise.
- Flexibility: Employers and the gig workers enjoy the flexibility; they can start, swap, and end jobs as and when needed and further choose to get the right fit as per the requirement and interest. Gig work arrangements are fluid, and this model is aptly adaptable in approach.
- Cost: Humongous reduction in the operating costs has also boosted the development of the said economy. Organizations are concentrating on attaining scale afore profitability.
- Liability: Organizations are not predisposed or liable to any social security benefits such as paid leaves, wages, overtime, provident fund, insurance, and other fringe benefits, in the gig economy model.
- Multiple jobs: Along with flexibility, there comes a choice to engage in multiple jobs to boost income. Individuals can take short breaks to upskill and take-up a dream profile of their interest.
- Economy: For a country with a population of over 1.38 billion, with the majority of the unemployed, considering the gig economy perhaps is the most tangible and realistic way of creating employment for our colossal base of the high-skilled, semi-skilled and unskilled workforce.
- Crisis: The pandemic has fuelled the gig economy. With the work from anywhere model, gig workers are benefitting from the never-ending demand.
Organizations have welcomed the gig model wholeheartedly; it is likely to be capitalized as an aftermath of the pandemic.
Out of 100 leaders who participated in a survey conducted in April 2020:
- 45% confirmed working on a hybrid model of the workplace; what % will come to work from office / continue to WFH.
- 68% working on a hybrid model for resource development, need, and upskilling and cross-training their existing resources.
- 43% stated working on a hybrid model for talent composition, considering full-time employees, shared talent & gigs.
The labour market is getting redesigned and re-oriented. Organizations are leveraging gig work to long term cost-effective business models. The gig is here to stay and is rising at an exponential sparkling speed.
An Aon survey on “Decoding the Gig Economy” has done exclusively for ET show Sector-wise % age of companies looking to hire gig workers:
|Industry||Current||Future (2-5 years)|
|FMCG – Pharma||15%||69%|
|Technology & BPO||57%||60%|
With soaring rise & countless advantages, it has its downside as well. Lack of Social benefits tops the chart for Gigworkerss, and unclear legal framework makes this model troublesome for the organizations.
According to the TIME survey conducted a couple of years ago,
- More than 80% of companies that use independent contractors say that they do so because they can quickly adjust their workforce size, save money on benefits and tailor the worker to a specific task.
- More than 50% said those contingent workers are not as invested or loyal as employees.
- Around 50% said that gig workers are harder to retain.
The above three statements depict the challenges faced then; not much has changed even now, in this new aged gig economy. The organizations still find it challenging to manage and administer geographically distributed gig workers that are legally less bounded than full-time employees.
They are compared and expected to be as loyal as their counterparts without giving any job security or social benefits. Thus, the gap will remain as is lest gig rights get protected in some way. The essential social protection has to be covered and considered. The equation is straightforward: YOU REAP WHAT WE SOW!
The organizations will have to strategically keep critical profiles in-house and use super-skilled or semi-skilled gig workers to do short-term, specialized, or routine work. A flexible and adaptable hybrid model will keep the boat afloat and move it in the right direction.
India’s gig economy is projected to grow at a CAGR of 17 percent to $455 billion by 2023, as per reports by industry body Assocham in January this year.
Gig work will transpire as the new substantial, preferred, and explored workforce. There is already a visible shift from the conventional 9-to-5 job to the “SUIT YOUR SCHEDULE” model. The future is about RELEVANCE: WHO CAN DO WHAT, not about where we work from or for whom else we work for.
Strategies, now or later, will be formalized, molded, bent, and adjusted to define the guidelines to protect the NEW BOUNDARYLESS work, workplace, and workforce in the most anticipated shift: THE GIG SHIFT.