We can all agree that 'flexible work,' 'gig economy,' and the ‘sharing economy,' to name a few terminologies, has seen a substantial increase in popularity, notably, since the worldwide pandemic hit. Previously, the term ‘gig’ was associated with blue-collar jobs, however, the Indian economy, which was severely hit during the peak pandemic period, has now evolved beyond this, and is also witnessing the productivity and dependability of the gig workforce.
India's gig economy has grown and is predicted to thrive in the post-Covid-19 era, in areas such as FMCG, BFSI, Assessment, Ecommerce, Automotive, Media and Entertainment, to mention a few. Given the current need for business agility and the young demographic’s focus on strategic roles, any meaningful work, and the freedom to pursue their passion without being shackled by a 9-to-5 job are desirable. Gig work allows people to choose their working hours, the work they like, a pay-per-job model enables them to work with companies that pay more than the average.
This has certainly paved the way for businesses to experience a paradigm shift by reconsidering their existing (traditional) business model and adopting a 'New Mode of Operations’. Though the Gig economy's breakneck pace of evolution was never labelled as a part of the "formal economy", India is now embracing this phenomenon to move towards the gig model by establishing certain ground rules.
According to an ASSOCHAM report, India contributes 40% of the global freelancing economy, and there are approximately 15 million skilled gig workers in India. The Indian gig economy is anticipated to expand at a compound annual growth rate (CAGR) of 17% and earn $455 billion by 2024. It is also estimated to generate 350 million new employment opportunities by 2025.
Transitioning for business output
Enterprises have been benefiting from the gig economy since it is less expensive and allows them to tap into a diverse pool of (work) partners. Throughout the years, enterprises have evolved themselves and have been experimenting with different ways gig workers could fit into their vision.
With the push from the pandemic and individuals shifting to more flexible working hours, businesses are now reaping the advantages of the gig economy for various reasons, some of which are:
- Work on-demand and outcome-based: The gig economy is the only market economy in which work is driven on-demand and is outcome-based; with large enterprises converting their fixed third-party payroll expenditure to variable spending directly linked to their PnL. At scale, gig platforms play a critical role in enabling businesses to get work done on-demand while simultaneously offering partners with visibility and assurance of income without the requirement for ‘full-time’ work.
When integrated with the effective work board (tech) tools, gig platforms support large organisations in completing business operations on-demand and achieving the expected outcome. Thus, the gig economy is much more than just discovering gig workers for businesses. The gig economy provides even more value to the entire business ecosystem by delivering results from the gig workforce. It is also crucial to acknowledge that the tools required to manage gig workers differ from those used for a 9-5 work model.
- Being Hyperlocal: Gig economy has been a major game-changer where businesses can push themselves to execute their work in tier 2, 3 cities. With the emergence of ridesharing, e-commerce and hyperlocal delivery start-ups there has been a rapid growth of a new class of urban gig workers who are the operational backbone of these start-ups. They are drivers and runners who transport food, medical supplies, forgotten keys and a plethora of other items that are available on-demand through apps. This new workforce helps city dwellers save time and live hassle-free by getting them what they want and when they want it, and customers happily pay a premium for the service. Through the working model of gig platforms, enterprises can now expand their business use by maximising their speed, scale, and quality of work across the region.
For example, if a consumer start-up brand plans on establishing its operations in 100 cities through a traditional route of work, it would need at least 6 months to get the first set of outcomes. However, if the tech-driven gig model is put into place then the enterprise will be able to drive output, within 3 days across all 100 cities.
- Higher productivity, fresh ideas: Enterprises can increase their overall productivity by leveraging the focused, innovative, and driven gig partners. Moreover, as freelancers have vast experience of working with various organizations, they bring in fresh ideas, expanded vision, thinking, and visualization for idea presentation, industry trends, and solution-based approaches to market challenges. They have a better understanding of what clients want and require little to no handholding to return with work that does not require any adjustments, reducing back-and-forth interventions.
- Better alternative: Independent workers are usually highly qualified and willing to be deployed to complete clearly defined tasks. Enterprises that hire them can do so for services as and when needed, only paying for the tasks which they complete. This translates into high time and cost efficiency, which results in increased earnings without compromising on the quality of work.
Gig economy has proven to be much cheaper than every alternative route of driving enterprise work. Businesses must incur two major costs to drive a traditional workforce: upfront costs by placing job roles, salaries, and entire office setups with no concrete and desired output, and incremental costs to balance attrition at each level through constant hiring, retraining, and re-management on a month-to-month basis.
Nurturing the Future Workplace
Enterprises have come a long way from having all employees on the payroll to the outsourced gig business model. It will be exciting to see how businesses are shifting their focus from physical spaces and more towards remote working.
In essence, a careful balance must be struck between traditional business and gig economy for the sector to evolve into a talent-first, goal-driven and less-hierarchical work structure, rather than its much-maligned short-term, low-pay, zero-benefits one.
The gig economy will undoubtedly help businesses thrive in 2022 by enabling them to make quick decisions and see faster results in a cost-effective manner. Last but not least, the government and policymakers are now actively supporting this economy by creating a plan to scale India's gig economy by putting in-depth responsibilities for entrepreneurs, investors, and non-governmental organisations. Businesses must continue to accept and embrace this rapidly evolving (gig) trend in order to create a dynamic, flexible, and inclusive environment for all workforces.