Gig-Economy In India

Every area of human life has been gradually changing due to technology impact. You are hungry and need to grab a bite. Apps such as Swiggy, Zomato will ensure you can enjoy food form your favorite restaurant. You don't own a car and you need to go somewhere quickly and affordably. Just tap open Ola or Uber or local taxi apps to get a cab in a jiffy. All these services are rendered to you in the new concept of asset-light business models made possible by employment of the new gig-workers employment model, wherein Companies can scale without taking up high upfront fixed costs.

Gig is a slang term meaning a job for a specified period of time and it refer to the workers outside of the traditional employer-employee relationship including freelancers, workers who are employed on a contractual basis with their employers, project based work and short-term work.

What is Gig-Economy

Gig economy is a free market system in which Freelancers, independent contractors, project based workers and temporary hires are hired for temporary positions. This can be found across every industry. Gig employees could be writers, cab drivers, photographers, food delivery personnel, e-commerce delivery personnel, service provider, accountants, tutor, artists.

Simply put it is anyone who enters into formal agreements with a company to provide services without being on the company’s payroll. Digitalization of the economy allows workforce to be mobile, so people can select temporary jobs from around the world, and employees can find the best individuals for each job without much constraints. Our Knowledge center provides you with more information on this topic.

Gig-Economy Participants

There are 3 major Participants in this new economic model

Independent workers

Companies pay independent contractors to finish a job. They can work anywhere and are becoming more mobile. They have a variety of temporary jobs to choose from all over the world. Independent employees can be divided into two categories: labour providers and commodities providers. Less educated workers are the ones who provide the labour. They entered the gig economy because they had problems finding alternative employment opportunities. Included in this group of workers are drivers, delivery personnel, and handymen. The highly educated employees who frequently hold another full-time employment serve as the goods providers. They could be designers of software or artisans.

Platform Companies

The second element consists of platform businesses that directly link workers and customers. Most of them are technological platform businesses such as Urban Company, Ola, Uber, Zomato, Amazon, Flipkart and many upcoming e-commerce or online business. These businesses serve as a conduit between the employee and the customer. They take a certain percentage of any service they provide. From Cab drivers to SEO specialists at a computer company, job seekers can easily obtain a fast and temporary position. People can browse online profiles and reviews of both clients and employees on these platforms.

Consumers

Consumers are those who require a certain service, such as assistance with a software development project or transportation.

Current Status in India

• 77 Lakh Workers engaged in 2021
• Expected to grow to 2.35 crores by 2030
• Worker Skill-set breakup
  • 31% in Low skilled
  • 47% in Medium skilled
  • 225 in High Skilled
• Trends indicate reduction in Medium skill with increase in Low and High Skill roles
• Medium Skills expected to dominate till 2030

Data Source

Benefits

• Ease of finding short term and free lance opportunities
• Direct Transaction opportunity between consumers and service providers
• Flexible Work schedule for employees
• Online Profile and service rating to assist consumers in choosing right provider
• Ability to work anywhere and anytime for employees
• Market Driven Prices for skill-sets (mostly in High Skill Jobs)
• Demand and Supply match, allowing for scale of services as demanded by consumers
• Limited Risk for Companies as they can hire for specific period and validate fit for role
• Access to diverse pool for Employers

Challenges

• Lack of employee benefits such as Insurance, Leave or limited working hours
• Cost savings primarily due to removal of benefits, requiring employees to find own alternatives
• Limited learning opportunities for employees to skill up, allowing them to move to higher skill roles in future
• Variable earning leads to challenges to access financial services from Banks and NBFC's
• Most low and medium skill roles are fueled by Incentives, leading to unsustainable economic models for Companies, which may find it hard to reduce cost in short and medium term
• Service optimisation challenges for companies as they are dependent on intent of workers to work at specific period. Most offer incentives, leading to sustainability worries
• Limited Loyalty among workers, who choose to work with those who offer most pay. Companies are forced to engage with larger pool of workers than required, leading to high acquisition costs and maintenance

Way Ahead

The advantages of the gig economy outweigh the drawbacks much too much. Gig workers have the option to select tasks that best suit their interests and objectives, allowing them to make money from multiple avenues.

Even though traditional employees do not participate in the gig-economy, traditional workers have benefited from it. More and more employees are requesting for flexible work arrangements as the workplace continues to evolve. Employers are under pressure to give their office workers more remote work possibilities.

Businesses have benefited from the advantages of the gig economy. They have been more successful in meeting seasonal demand, reduce overhead expenses, reduced hiring costs while being competitive. However, changes are abound in this space as Indian Govt has been working on providing for benefits for gig-workers, which is currently under development. The latest developments can be read from here

EasyHires is a cost-effective solution for hiring blue-collar workers on a flexible basis across India. Our services are designed to reduce overhead costs while providing workers with flexible job opportunities. We have partnered with over 150+ customers and 50k+ individual consumers over the last 5 years, allowing them flexibility to hire workers on demand in a cost-effective manner. If you are looking for similar solutions, feel free to connect with us to see how we can be of assistance to you.