There is no doubt that gig work is mutually beneficial to both companies and workers. By hiring gig staff, businesses can reduce overhead costs and increase their recruitment flexibility.
In the wake of the novel Coronavirus, businesses around the world had to rethink their operational strategies, but perhaps nothing stands out as much as the mainstreaming of the hitherto marginal gig economy in India.
Focus In India
Gig workers have increased steadily in the past few years, and it seems like it’s a trend that will last. Companies and workers alike have benefited from gig work. Hiring gig staff allows companies to save on office space and equipment expenses while providing them with greater recruitment flexibility.
The workforce, for their part, enjoy the flexibility of working multiple gigs, the ability to select a variety of work, and the ability to enhance their income. According to industry experts, India could have more than 130 million gig economy workers by 2020, with many more joining Flexi pools as formal jobs dry up. Many reservations that gig workers were not reliable and long-term viable were dispelled by the pandemic-induced lockdown.
The benefits of remote work have begun to be realized by businesses, which are reducing overhead costs, reducing liquidity strains, and rethinking operational decisions. Given the opportunities in today’s market, companies large and small are now increasing their use of gig talent. The gig economy offers workers more choice and flexibility, giving them more opportunities to use their skills.
Having been forced to cut staff because of a pandemic, in an uncertain market, many companies have been forced to hire gig workers. Gig economy growth has been boosted by this and e-commerce adoption as well as the broader adoption of online retail, as reported in the Survey 2020-21. The result of this is that India is now one of the leading markets for flexible staffing. Changes are taking place across the board for all types of jobs and roles and will do so in the future.
In response to artificial intelligence, robotics, and more flexible work schedules generated by pandemics, traditional full-time employment is changing. Companies will likely only want to employ workers for the hours needed as multitasking and multiskilling will be key competencies for professionals in the future. As a result, this sector requires urgent formalization. Both traditional and new-age businesses may shift towards outsourcing since the Indian blue-collar workforce has been validated.
Social Security Benefits
While the gig economy in India has grown rapidly, it is still in its infancy and faces many challenges despite the increasing numbers. In the past, the workforce had insufficient rights such as minimum wages, health benefits, and sick leave. The Code on Social Security 2020 now covers them, allowing them to receive social security benefits.
It is also important for employers to consider the contribution to insurance and social obligations of the gig workforce rather than only their tax obligations. The workforce needs to be assessed for skill gaps, as well as be upskilled and reskilled. The relevance of this becomes particularly apparent when automation is involved. As technology makes their work obsolete, many blue-collar and gray-collar workers will become redundant.
Manufacturers and infrastructure have traditionally used temporary workers. Despite this, the sector largely remained informal. With the increasing importance of gig staff in IT, ITES, and digital industries, hiring trends have changed. These sectors started seeing a spike in Flexi talent-hiring after the pandemic. The gig economy has gained traction in several industries, too, as industries have seen the benefits, and have begun to open their doors to gig workers to complete projects more quickly and to avoid other considerations such as PF, office space, and overhead.
At least two decades of technological advancement have been accelerated by the pandemic. In the same way, employees should progress in their technical skills. The percentage of India’s labor force with digital skills is currently 49.2%. Changes in business sectors have resulted in a demand for more digital skills in such areas as cybersecurity, data science, and artificial intelligence. These operators are soon going to be needed by construction and infrastructure firms that are researching 3-D printing, drones, and related technologies as well. As a freelancer, people can get the following benefits:
- Companies find it difficult to recruit full-time workers due to the COVID-19 pandemic, therefore they are more economical to hire freelancers.
- Flexibility in working hours and the resulting independence make it possible for people to balance work and family life better.
- Starting a business with a shoestring budget makes working with freelancers financially feasible.
- The convenience of some gig jobs in the unorganized sector is that degree-less individuals can enter the workforce easier since they don’t need a formal degree.
- The flexibility of freelancing allows freelancers to take on multiple jobs based on their interests, which can create multiple streams of income.
Budget 2021-22 & Business Plan
Since the gig economy and its workers are becoming more and more prominent, in this year’s budget Finance Minister Nirmala Sitharaman proposed gig workers would be insured by Employees State Insurance Corporations. In addition, women will be permitted to work in all categories with adequate protection, including night shifts.
Moreover, the budget proposes to create a portal that will collect information relevant to gig economy workers, including those in construction and building. Health, housing, skill, insurance, credit, and food schemes that are relevant to the gig economy can be developed through this portal. By adding social security benefits to gig workers, the sector is better positioned to achieve sustainable growth and benefit millions of workers.
More than a dozen companies and aggregators have committed INR 500 Cr to the new gig worker social security fund in India, including Swiggy, Amazon, Flipkart, Zomato, Ola, Uber, and others. Most large HR firms in India previously targeted white-collar jobs and personnel. With increased compliance allowing firms to hire gig workers, talent acquisition and management firms could expand their portfolio and target blue-collar and grey-collar workers, as well.
In logistics and online business, there is a high demand for blue- and grey-collar workers, as inefficient delivery channels are crucial for online business. Since e-commerce is expanding into tier 2 and tier 3 cities, there is an increase in the demand for gig workers in these areas. Startups that provide human resources management services can grab this untapped market, and legacy businesses may also benefit from Flexi-hiring.
The gig economy has a huge potential in India. Flexi-work adoption will be greatly boosted by the new government compliance legislation. The gig economy is at an exciting time and disruptors who understand this space will find endless opportunities for doing business in it.
