The rise of the gig economy in India and its impact on staffing solutions
Adapting to talent acquisition challenges in the EV boom
October 17, 2023
Leveraging social media platforms for talent acquisition
October 17, 2023
On-demand labour has always been a part of the Indian economy, mostly informally. It came to the fore with the boom of ride-sharing and delivery apps. The term gig economy currently refers to the flexi-labour market comprising contractors, freelancers, temporary workers, etc.
A gig worker can work independently or through a staffing agency for one or more employers for a term or project, referred to as a gig. The employees who work through on-demand platforms such as delivery or transport are called platform workers. The others who work for casual wages or in conventional sectors are called non-platform workers.
Some factors that have helped the rise of the gig economy are:
- The rising start-up culture
- Business uncertainties and geo-political disruptions
- Increasing awareness about the importance of work-life balance
- A jump in the number of online platforms and options
- Increased accessibility
- More opportunities for women and people with disabilities (PwD)
- The government’s digital initiatives
According to a NITI Aayog report, the Indian gig workforce will touch 2.3 crore by 2029–30, a whopping 200% jump from 77 lakh in 2020–21.
What makes the gig economy such a force to reckon with? Besides flexibility, it has many advantages. These include cost-effectiveness, access to a larger talent pool, agility to scale and pitch for more projects, etc. Most organisations leverage gig workers through staffing agencies, considering the convenience factor.
Let’s look at how these two concepts are connected.
The gig economy and staffing solutions
Staffing solutions majorly contribute to the growth of the gig economy. Here are some highlights of the Annual Report Flexi-staffing Industry 2023 from the Indian Staffing Federation (ISF):
- The industry continued a double-digit new employment growth trend at 14% YoY 2022–23.
- Freshers are getting their first formal employment.
- A rise in women's workforce participation is being witnessed.
The report states that the general staffing industry that caters to non-IT and ITES sectors grew at 15.3% YoY (2022–23). Some examples are e-commerce, FMCG, manufacturing, retail, healthcare, logistics, energy, banking, etc.
Let’s take a quick glance at how staffing solutions help organisations of various sizes.
Start-ups: Start-ups constantly grapple with the need to do more with fewer resources, which makes it challenging to survive in competitive environments. Staffing solutions help them access on-demand talent to save on resources.
Small and medium businesses (SMEs): SMEs have a little more leeway than start-ups to experiment with products and services, markets, etc. However, they cannot risk onboarding more employees for such ventures. Staffing solutions help them test the waters safely.
Large organisations: Staffing solutions help large organisations manage their need to staff large projects or offset the problem of constant turnover.
The NITI Ayog report also had a few recommendations that included:
- Catalysing platformisation
- Accelerating access to finance for platform workers
- Developing skills
- Enhancing social inclusion
- Bringing social security
How will these changes impact staffing solutions?
Impact on staffing solutions
Staffing solutions have a set of regular challenges, some of which are:
- Managing a diverse and geographically dispersed workforce
- Complying with local labour law
- Managing gig worker benefits and keeping gig workers motivated
- Ensuring work quality
The predicted growth will only add to the challenges. It is not easy to manage the demand-supply gap across industries with quality. Staffing agencies must devise customised solutions based on specific industry trends and insights.
Since the government is considering reforms and regulations for gig workers, staffing agencies must update their services for compliance. With the government proposing a framework to help gig workers move from informal to permanent employment, staffing agencies must rethink their strategies.
The Careernet advantage
With our in-depth industry expertise, these challenges are easy to tackle for Careernet. Having evolved with the times for over two decades, we know what it takes. We have helped shape talent acquisition industry policies through the periodic insights that we gather.
Understanding the hiring outlook of various industries or job seekers’ preferences, being sensitised to LGBTQ+ inclusivity, and being aware of the Electric Vehicle boom, we have our finger on the pulse. We craft our customised solutions based on these insights to help our customers offset the challenges of flexi-staffing.
In the future, we see government policies and regulations bearing fruit sooner rather than later. There is more awareness among industry professionals about moving away from traditional employment models in the quest for flexibility. For gig workers, better reskilling opportunities and streamlined processes to obtain work are in the pipeline. Custom staffing solutions will be a big part of the future.
References:
