Often called the “Fourth Industrial Revolution”, the current business environment is one that has reshaped how people interact with companies. Technology today is replacing older modes of work at an increasing rate and with an ever-growing search for profitability in an increasingly competitive world, businesses today have welcomed the benefits of newer technology with open arms. And as it is with any system of interconnected entities, aspects such as labor markets have greatly evolved too in the wake of these changes.
The gig economy is one such result. The recent spree of changes that modern-day economies are undergoing due to the adoption of newer technology, today, has loosened a previously structured and often regulated access to formal work opportunities. The rapid adoption of technologies, in addition to changing candidate preferences, today means that workers are able to procure multiple pieces of work or ‘gigs’ while companies have an option of reaching out to candidates with requisite skills.
With such shifts within the labor markets, it remains important to note how pervasive has the impact of a growing gig economy been for an economy like India.
Modern problems require modern solutions
With a large working population and an overall workforce which grows by over four million every year, the advent of the gig economy in the country has had a major impact on the country’s labor market. Reports show how there has been a significant rise in both the number of gig workers across the country, as well as growing numbers on the hiring side. According to one such study that captured this growth, over 70 percent respondents from the hiring side have used gig workers at least once or twice for solving organizational issues in the last year. Further, the report said, nearly 45 percent of the human resource (HR) heads surveyed wanted to hire a gig worker so that they can supplement skills of the existing workforce, 39 percent would do this to reduce the cost and 10 percent for filling temporary vacancies in their teams.
India, due to its sheer number of the working population, many of whom are beginning to get digitally connected, has found a growing acceptance to gig work.
Reports from a freelancing aggregator Truelancer states that over the past few years, the gig economy has grown greatly. It currently values the global freelancer market at $2-3 billion which is growing at an annual rate of 14 percent. India currently accounts for $1 billion of the global market. While the US leads the race with 53 million independent workers, India has 15 million freelancers with its gig economy workers increasingly gaining independent contracts in industries like IT and programming, finance, HR, and design, among others.
Drivers of the gig economy
To look closely at the projected rise of the gig economy in India, one needs to follow the journey of how technological and demographical shifts have made companies and candidates evolve their interaction with each other. Increasing digitization has meant that remote working options have become an option in front of HR professionals, often playing a key role in incentivizing employees. Co-working spaces, both offline and online, have come up which allow people to connect and make the best use of each other's qualifications to perform efficiently.
With a large working population and an overall workforce which grows by over four million every year, the advent of the gig economy in the country has had a major impact on the country's labor market
With talent pools today becoming way more diverse in their age constitution and with Millennials and Gen Z workers increasingly becoming part of the country’s workforce, many have begun preferring to become part of the gig economy. Either under the force of lack of formal jobs and or just evolving economic conditions, studies show that as more and more companies undertake business transformation to make their processes more technologically driven, the number of gig workers are bound to go up. Increasing use of technology, like AI and automation, would also lead to the creation of new job profiles and a business’s need to look for qualified talent. In the coming years, instead of hiring outright for such positions, it’ll be possible for companies to just reach out to talent on a more project-like basis.
An important aspect of the rise in tech usage in a country like India has meant that many who would’ve worked previously within the unorganized sector are now able to procure better employment. But that’s not to mean gig economy finds itself in a clear area when it comes to the ’formality’ of the jobs it generates.
Most jobs created under this growing trend exist in their own informal space. Although this might seem to be an effective measure for both professionals to set their working wages according to free market operations and a company to hire people with specialized skills on a temporary basis, the real-life implementation of the model doesn’t essentially come back without its red flags.
The other side: Are labor legislations keeping up?
While it has reached a fairly mature stage in developed countries where recruiters and employers are used to a concept of a mobile workforce, organizations in India are still getting used to this departure from the traditional work culture. But as estimates show, flexible jobs and gig based employment are certainly growing. Given the technological journey that Indian companies are still to chart, the gig economy is bound to grow. But in order to successfully utilize the gig economy as a way of engaging the rising workforce of the economy, many other factors like skill levels and technological access of the masses have to fall in the right place. But all is not ideal with the current work of affairs.
With talent pools today becoming way more diverse in their age constitution and with Millennials and Gen Z workers increasingly becoming part of the country's workforce, many have begun preferring to become part of the gig economy
Many end up becoming a part of the gig economy not out of a yearning to try out different things but rather a very real need to have a job. Given the rapid growth of India’s working population, the employment generation capability of a gig economy has helped many within the labor markets to become employed. A stance which many have proposed as a way of creating jobs. Although this might be a temporary solution towards creating employment, independent workers by nature of their work are more exposed to market shocks than regular salaried full-time employees of a company.
Regulations here can come in various forms. They range from overarching schemes like the creation of a Universal Basic Income scheme and the provision of skill-building opportunities (even ‘gigs’ would soon require specialized skills) to looking closely at the freelance and gig-based employment and taking steps to make them an attractive and secure option for people to follow.
Though proponents of the gig economy claim people can benefit from flexible hours, it has its fair share of detractors, who consider it a form of exploitation, with very little workplace protection. While gig work is a necessity for some, it is a luxury for others. It remains to be seen what journey we undertake.