Trends & opportunities in a flourishing gig economy
The pandemic has changed the way we live, think and go about our daily life. A big disruption has come in the way we want to earn money and look at our career graph. The virus has threatened human life to the extent that people have started revisiting the very idea of holding a job, the reason to rush behind money and career, with an overwhelming population deciding to stay back at their home towns, spending quality time with family and friends. Coupled with technology intervention which has diluted geographical distances, and most of the companies still continuing with the work from home edict—India is experiencing a flourishing Gig Economy.
Studies have estimated that India currently has a pool of ~15 million freelance workers staffed in projects across IT, HR and designing. Additionally, India’s workforce is growing by ~4 million people annually. As young millennials choose the way for independence and a more liberated lifestyle, they are showing an increasing preference for gig contracts.
With remote working opportunities, the trend is expected to significantly impact the transformation of the quality of the job market in the near future. As per a report by MasterCard, India’s gig sector is expected to increase to US$455 billion at a CAGR of 17% by 2023 and has the potential to expand at least 2 times the pre-pandemic estimates. In another estimate by India Brand Equity Foundation, the country is likely to have 350 million gig jobs by 2025, presenting a huge opportunity for job seekers to capitalise and adapt to the changing work dynamics.
The prevalent start-up economy in the country has also given a push to the Gig economy as hiring full-time employees lead to high fixed costs and thus contractual freelancers are hired for non-core activities. MNCs are also adopting flexi-hiring options, especially for niche projects, to reduce operational expenses after the pandemic. The trend is significantly contributing to the gig culture in India. As per an Aon survey—'Decoding the Gig Economy’, 49% of the 145 companies have already employed gig workers and 65% plan to increase this number over the next 2-5 years.
According to IBEF sector analysis, the services sector is expected to have 76% gig workers in next 2-5 years, followed by the FMCG Pharma sector which is expected to have 69% gig workers in the same time frame. The EdTech sector is also riding on the gig revolution and currently employs ~90,000 people. The gig economy is expected to hire people in HR operations, customer support, transactions and operations processing, marketing and sales, software development, IT support, graphic design, and others, in addition to delivery services and other such roles that have traditionally been blue-collared jobs.
An upside to the choice of gig workers is the service quality improvement for the rural and semi-urban areas, which generally lacks proper technical labour force. As the rural and suburban economies increase their demand for electronic and digital appliances, the bigger brands struggle to provide after sales and installation services. The reverse migration during pandemic has seen quality labour force going back to these hometowns and also successfully finding employment, even if not permanent positions, a rewarding one, near family. This has actually opened up the opportunity for big brands to hire quality people in these areas, and offer access to better talent pools.
As the economy is still trying to find its feet to grow sustainably, permanent jobs are difficult to come by. While the entry level jobs have already become contractual based, it is important to note that even the mid-level jobs and positions are not looking at permanent candidates. In fact, managerial positions are also being filled up contractually.
The entire scenario of gig economy has also honed opportunities for reskilling and upskilling the workers dynamically. Without a fixed job hour, it is easier for the gig workforce to pursue their own dream and target. As automation redefines the way to work, the gig workforce is expected to provide the workforce supply seamlessly. However, the certified quality work force available in the gig labour economy is still under-utilised in many areas because of labour laws in the country. Gig employees work on various compensation models such as fixed-fee (decided during contract initiation), time and effort, actual unit of work delivered and quality of outcome, but maybe without provident fund benefits.
A 2020 survey by Flourish Ventures highlighted that ~90% Indian gig workers lost their income during the pandemic. While they earned >Rs. 25,000 per month before the pandemic, by August 2020, ~9 in 10 were earning <Rs. 15,000 per month and >33.3% were making ~Rs. 150 per day or less.
However, this also provides the opportunity for the gig economy to grow and flourish. While the government has taken the initial steps to ensure social security of gig workers through the ‘Code on Social Security’, it is necessary to give a push to the gig economy through labour reforms, for creating better employment opportunities in a transformed digital culture.