Article: Gig Workers - A New Era in Talent Management

#Workforce Management System

Gig Workers - A New Era in Talent Management

Watch out the benefits and the bottlenecks of Independent Workforce System!
Gig Workers - A New Era in Talent Management

The demographic change, cravings for higher cognification and accelerating automation has given emergence to many new business models. A new seismic shift is being experienced in today’s hyper-connected world due to the influx of Gig Workers or Independent Workforce. The dynamism in the labor market with rising self-employment and innovative forms of working is constantly advocating the augment of a new era of mixed psychology questioning traditional methods of working. McKinsey Global Institute (MGI) workforce survey across six countries shows that around 162 million people in Europe and the United States are engaged in some form of independent work. The number accounts for 20% to 30% of the working-age population in these countries.  And estimates say that 6.2 billion hours of additional household work per year in the United States and 8.5 billion in Europe could potentially be done by independent workers, creating millions of new opportunities for this modern workforce.

What is tempting more people to join this Independent class of segment?

The top 5 self-proclaimed obvious benefits from the gigglers aspect are:

  1. Autonomy and Freedom of choice

  2. High level of professional satisfaction

  3. Productive flexibility

  4. Increased learning

  5. Work-Life Balance

Similarly, organizations too have many advantages by its side when they switch to engage Independent workers from time to time. 

Sandeep Kohli, National Director, HR, E&Y says, "For project-based work, demand comes in spurts, and so there is merit in working with freelancers, especially on niche projects, as they are experts in their domains." E&Y has a pool of more than 300 workers who are working on this Gig model. Microland too has outsourced many middle and senior level roles to Independent workers. 

In fact, some of the direct measurable benefits which organizations can reap by using Gig workers can be summarized as:

  1. Cost Saving

  2. Quick Turnaround time

  3. Effective delivery-driven relationship

  4. Increased option to choose experts

  5. Easy ramp up of seasonal work

Then, why many of us are still shying away from joining this new workforce? 

We all know that flexible labor markets tend to enjoy higher employment rates and lower unemployment than those with more rigid approaches. In fact, The UK is rated as having the 5th most efficient labor market in the World Economic Forum’s Global Competitiveness Report 2016-17. Why is the Indian ecosystem still lagging in this area? Let us look at some of the top 3 challenges that are posing a bottleneck for gigglers of current times.

  • Safety Net

When it comes to Gig economy and its workers, one of the major areas of concern is limited access to income security. There is hardly any protection in terms of fixed compensation, insurance, and disability in case the need arise. This safety net is a major bottleneck which is posing a threat to this category of the workforce. 

  • Governing Laws

Also, the majority of the existing employment laws are not applicable to them. Hence, there’s a high chance of exploitation in terms of fairness of compensation with respect to effort estimation per project. There are no formal laws governing Gig workers vis-à-vis full-time employment.

  • Long-term Retiral Benefits

Another important aspect is related to long-term security benefits for this segment of workers. Retirement benefits such as Provident Fund, Superannuation and any other company sponsored pension schemes are not made available to them.

Independent workers are the group that is most likely to suffer from such unfair one-sided flexibility. Hence, the need to provide additional protections for this group and stronger incentives for firms to treat them fairly is the need of the hour.The government will need to explore ways to improve pension provision amongst the self-employed creating more people to join the Independent workforce. This will help in creating more opportunities presented by digital platforms and the move to more cashless transactions.

What lies ahead! 

National bodies of various countries are independently taking initiative to frame laws for covering all types of employed people including this new segment of Independent workforce. UK already has a system in place to make sure that employees are paid a piece-rate as per the governing law. For India, a whole new ecosystem will need to be developed to support this new class of Gig workers. And the Government will need to re-look at all related laws governing it to make it more acceptable to the larger pool of talent.

However, in spite of these bottlenecks, the independent workforce segment will soon change the way talent may need to be managed. As per a recent research result by MGI, this segment could potentially grow from 76 million to 129 million in America and 89 million to 138 million across the EU-15. In the United States alone, freelancers’ accounts to a significant amount of their GDP which now make up more than 35% of the American workforce. Though India is still not a mature market for Gig workers and is in the nascent stage of evolution. However, there is ample opportunity for growth and their numbers will increase in the days to come.

Topics: Workforce Management System

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