The gig economy is thriving. Here’s why.
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Emergence of India’s gig economy
As per the dictionary, the gig economy is:
“a labour market characterised by the prevalence of short-term contracts or freelance work as opposed to permanent jobs.”
With the use of technology platforms to match and provide workers for growing in-demand services, the past decade has seen a stupendous rise in the gig economy in India. Some of the most common examples are companies like Ola and Uber (cab and rikshaw services), Swiggy and Zomato (food delivery services) and Urban Company (care and wellness services). The gig economy in India was previously known primarily for blue-collar jobs. However, this trend is definitely changing with an increasing adoption of gig work by white-collar workers who are hired by start-ups and small and medium enterprises, as well as legacy companies. The gig economy has seen tremendous growth over the years.
On the upswing
So why has the gig economy in India seen such substantial growth?
As per a report by ASSOCHAM, India’s gig sector is expected to increase to US$455 billion at a CAGR of 17 per cent by 2024. It has the potential to expand to at least two times the pre-pandemic estimates.
This uptick in gig numbers can be attributed to several factors:
- Impact of the pandemic
The pandemic accelerated the demand for low-end gig work when the reliance on home-deliveries increased. Apart from that, millions of jobs were lost during the health crisis, which resulted in many who had been in traditional 9–5 jobs transitioning to gig work as their primary source of income or as a source of extra income. The unprecedented situation changed the mindset of most workers, making them more open to taking up temporary work.
- Cost effectiveness
Most companies consider it more cost-effective to employ gig workers than recruiting full-time staff since several of the benefits given to full time employees are not given to gig workers. The addition of extra gig workers when the load of work increases, especially during the holiday season, is a strategy that many companies employ.
- Adoption of flexi-hiring by large organisations
As per NASSCOM, nearly 60 per cent of organisations in the tech industry now invest in gig workers. 97 per cent of these companies plan to keep hiring gig workers at the current levels or increase their gig hiring. These companies are now able to access a highly specialised workforce without the hassles of training or onboarding these employees. While organisations had earlier employed subcontractors, most companies would stay away from freelancers. All that is changing now. According to Moneycontrol.com, companies like TCS and HCL Tech are already piloting gig working models for internal projects.
- Gen Z'ers prefer gig work to 9–5 jobs
The burgeoning Gen-Z and millennial workers are also responsible for driving the growth in the gig economy. Not for them the monotony of a typical 9 to 5 routine. Gig workers have the flexibility to choose the clients they wish to work for and the locations from where they wish to operate. Moreover, several millennials and Gen-Zers have lived through times when they have seen their own parents losing jobs (especially during the economic recession of 2008). For this reason, they are not particularly drawn to working 9 to 5 for a single employer. They thrive on the independence and freedom that gigs provide them and prefer working at their own convenience on projects that add value to their portfolio.
- Widening of talent pool
With the emergence of gig workers for high-skilled jobs companies now have a larger pool of specialised talent to choose from. In fact, gig coders are expected to become a mainstream phenomenon in India IT. Gig work is conducive for companies that work on agile models and gig workers are contracted for tasks that need expertise.
Poised for further growth
As per a report “Unlocking the Potential of the Gig Economy in India” published by the Boston Consulting Group (BCG) in March 2021, the gig economy can become a major driver for employment generation, serving up to 90 million jobs (roughly 30 per cent of India’s non-farm workforce), adding up to 1.25 per cent to India’s GDP in the long-term.
There is no doubt that the gig economy has become an integral part of the Indian workforce and revolutionised the way people work. As gig workers play bigger roles in helping organisations chart their growth trajectory, the organisations, in turn, must ensure that the rights of gig workers are upheld.
Careernet offers a professional staffing solution through Careernet FlexiStints, with a ready pool of knowledge workers that can be engaged and scaled as per your organisation’s specific project requirements. Write to us at sales@careernet.in for more information.
