Gig Economy in India – The Pros & Cons

Individuals are gaining back power, and startups are shifting to facilitate this tilt in power. This tilt in power entails the increase belief of future work being more ‘gig’ based where open talent can be recruited on project basis.

Infact, the 2017 report of one of the BIG 4s in the finance world released a study called the ‘Future of Jobs in India’. In this, they found that over 24 percent of the total world was depending on Indian freelancers to get their job done.

‘Freelancers’ are becoming buzzwords now. Nowadays, everyone claims to be a freelancer, doing something or the other. This has been facilitated by the Digital Revolution in the form of lower tariff rates by competing companies, and the increasing penetration of smart devices in the hands of the individuals.

But is it all about Digital Revolution that has contributed to this economy? Are some other factors involved too? Why is it that contracts are shrinking, and many are getting recruited for ‘months’ or ‘project basis’? Is everything all rosy for the freelancers out there, or are they feeling their share of exploitation?

What exactly is Gig Economy?

A gig economy is based on flexible, temporary, or freelance jobs, involving connecting with clients or customers through an online platform.

Industrial Revolution 4.0 has changed the way business used to function, as more and more people are moving towards technology. Technology is helping them grow better, and many a times a small apartment which was left unused for a long time is suddenly becoming the interacting place of cloud based company employees.

Not only are the businesses getting more and more niche, even the employees are finding it easier to get opportunities in terms of paid work, sitting in the comfort of the home.

Newer technology has thus paved the way for a gig economy in the Indian Economic space. The often tightly regulated environment of the formal jobs have loosened a bit. People are selling their skills and getting gigs according to what they demand, instead of them being a part of the very formal process of coming to office daily.

Many a times, the person getting the job done for you is often sitting miles away in another part of the country. Not only is technology the reason for the change, but labor market too is welcoming this change of work culture.

Thus it becomes very important for us to understand the impact that the gig economy is having on the Indian Economy.

Reasons for Indian economy accepting short-term labor

There can be many reasons as to why the companies are more and more tempted to recruit talent, especially the white collared one, for a shorter term.

• First, there is the obvious reduced cost of recruitment, which comes at the cost of providing benefits in the form of maternity, provident, medical, etc. But none of this has to be provided for the person working for you miles away in front of electronic devices.
• Second, the requirement to have a lavishing private space to get your employees on board is done for, as the ones doing the job in the 9 hours of shift move towards the ones who can actually get it done in a fixed time period which the employer and employee have agreed upon.

The example of Ola and Uber Workforce, or Unacademy Educators who get a contract each month to keep it flexible for the organization explains this the best.

The Pros or Benefit of Gig Economy

1. The gig economy has started the environment of competition and efficiency among the workers. The recruiters get some freelancers on board, and a healthy competition is promoted among them for extra money for the best performers.
2. Secondly, the organizations save on the time involved in training, as the ones having a prior experiences are given the gig on a contractual basis. This reduces the often increasing costs that comes with operations in office spaces.
3. Further, it helps the employees in having the peace of mind and freedom to work as per convenience.
4. Along with this, no fixed working hours, no employment policies, and no office-politics further helps them work without the obvious pull downs. The flexibility to pick and choose any kind of work helps them. Small businesses operate like a globalized corporation by tapping these talent pool.
5. The best thing is that in a country like India where metropolitans have not been safe for females, they get an option to pursue their career. Along with that, the ones managing their family don’t miss out on important milestones.

The Cons or Negatives of Gig Economy

While the positives of the move have been listed, like all things that exist, there is a different side to the gig economy.

1. There are no regulations or legislations in order to regulate the way the gig economy functions in India. But it is expected that the government would take notice of this.
2. The working hours sometimes get very hectic, and adding to that, the surmounting pressure to get the task done because of reasons which are as silly as deficiency of work which was to be completed by an in-office employee almost gets on the nerves.
3. There are no places to raise concern, as grievance redressal mechanism is seldom mentioned in the contract. Workers generally don’t have a bargaining power to negotiate a fair deal with their employers.
4. When a Freelancer wants to get back to a full-time job, it becomes difficult to reach to a “CTC” or Salary package, considering how the market currently gives a hike on the current package.
5. The recruiters face an issue regarding the confidentiality of a product that they are launching. A freelancer being used by competition may result in conflicts and legal issues.

Gig Economy in India

Wipro and Infosys, the giant software companies, are also known to hire gig talent on a project-to-project basis.

India, having one of the biggest demography in its youth, can be a source of top freelancers in the Asian region. Infact, something as basic as knowing English can help be in the translation market. Learning Chinese and German were never be this rewarding.

However, India’s rural economy is still deprived of this boom. Somehow, if the penetration of internet increases, which is currently a mere 16 percent in the rural areas according to Government of India’s report, it can help with reverse migration and increasing the opportunities for the rural youth.

It may motivate them further with acquiring new skills that are relevant in the job market. For semi-skilled jobs like Data Entry and highly skilled jobs like Subject-Matter Experts, Teaching and Online Education, and Sales and Marketing, the start-ups have gone in with full enthusiasm.

Are we ready for the change?

Call it the lack of well-paying formal jobs, or the lethargic culture in most of the companies which fresh graduates coming out of the comfort of their homes find difficulty in, everything has contributed to the Gig Economy in India.

Increasing amount of people taking up skill-building courses like Artificial Intelligence, Automation, Machine Learning, and SEO is only a testimony to the fact that the market is evolving. Due to this evolution, our country’s economy is experiencing the correction of a lifetime.

While the positive side of it is that many who used to work for the unorganized sector previously are getting procured with better gigs, it is still unclear when it comes to the ‘formality’ of jobs that are being generated.

Way Forward and Conclusion

The need of today is basic labor protection. Are the ones being a part of the gig economy doing all this for social security benefits? Let’s look at it this way. Not only are the companies benefitting because of the obvious benefit that they are extracting from the ones doing the gig from them, it is helping them grow bigger. The regulations are still not in place and hence the laws are defined by the employer, and hence inclined in favor of them.

But the fact that such regulations will only cripple an emerging market which is still in nascent stage is also true. It has a lot to mature upon.

The government can always redefine the terms of labor laws to accomodate the gig economy, but make sure this doesn’t stifle innovation. India could be a stakeholder with European Union and the USA, where talks are underway on ways to protect the gig.