Actually the basic concept of “gig economy” is not new in India. The majority of the informal workforce in India has been freelance in both the urban and rural workforce. In urban areas plumbers, electricians, carpenters, housemaids, construction workers et al have always been part of the informal workforce without full employment and benefits. Some negotiate assignments directly with the principal employer and some are employed by contractors.
In the small and medium segment in sectors like gems and jewellery where skills are more important, migrant workforce who are not full time employees have been engaged.
However the issue with the organized workforce which employs 15% of the total workforce in the country has been the Contract Labour Act which has discouraged many larger employers from employing the contingent workforce. The biggest hindrance has been the law that if the contractor fails to provide the wages of the labour the principal employer has to pay the full wages of the contract labour. This clause kept many large employers from employing contract labour – and specially if their business was seasonal they lacked the flexibility to expand and contract their workforce with the demand of their business.
The arrival of large temp agencies eased it somewhat but for the arrival of the true gig economy we had to wait for a decade more
Gig economy in today’s times
Reasons for the current rise in gig workers in India
1. Flattening of the corporate pyramid – since the dawn of liberalisation in 1991 traditional large private businesses have had to become more nimble to compete with global peers. This changed the psychological contract they had with their workforce. The earlier “hire till retire” policy went out of the window. People were now assessed solely on performance and if they couldn’t measure up they were asked to leave. The organizations also realised that they needed to shed their various layers to be closer to the customer and to be nimble.
2. Rise in project work: With the arrival of the IT services companies a new kind of worker emerged, whose loyalty was to the skill set he/she had built an expertise in and not to the employer. If you hired a SAP MM consultant because you were pitching for a project that would need that skill, and it did not come through – that person would leave for an employer where the skills were wanted.
3. In 1999 Tom Peters wrote an influential article called “Brand You” which called on employees to see themselves as CEOs of “Me, Inc” – reinforcing the message that learning and growth of oneself is one’s own ownership and shouldn’t be relied on large organizations.
4. Growth in other opportunities – with the rise of the internet and falling barriers to erstwhile “elite” professions like writing, fashion design and photography many people moved away from the traditional “engineering-medicine-government job” paradigm to venture into these new creative fields. The rise of social media has given rise to newer and newer professions like social media influencers in various niches from technology to fashion, stand up comedy and performance poetry. Suddenly the only limits were one’s creativity and imagination.
5. The arrival of the platforms: In 2005 Amazon launched its Mechanical Turk website for people to crowdsource small jobs they needed to be done for some money. For high end knowledge work marketplaces like GLG emerged that connected companies who wanted insights and experts who could provide it to them for a fee. From those beginnings we have the rise of the on-demand economy today with app based platforms that match buyers and sellers (Ola, Uber for rides, OYO and Airbnb for stay)
Traditional organizations have been caught like a deer in headlights with the sheer pace of of changes in the last few years. For example traditional taxis like Meru, Mega Cabs and other radio cabs have been slow to react to Ola and Uber’s scorching pace. Similar is the case with traditional budget hotels and guest houses to OYO and Airbnb.
However, not all is hunky dory with this – the gig economy without a safety net of traditional employment benefits like medical insurance leaves workers in a vulnerable state. While reskilling now easier with the rise of microlearning platforms like LinkedIn Learning, Udacity, Udemy and Coursera – workers have to recognize that the main skills they need is “adaptability” and be prepapred to move across industries and to ride the waves as and when they come.
Implications for employers
Large employers are already sitting down and looking at what roles are needed and what can be farmed out to the gig-economy ecosystem. Many restaurants in the metros have already let go of their “delivery boys” and handed the delivery to platforms like Delhivery, Swiggy and Zomato. Each and every industry will need to adapt and if needed will need to help their workforces transition to the gig ecosystem.
As a talent partner with many IT firms in the US and India, contract workforce make up about 25% of our firm, VBeyond. Since they are remote what is needed is constant communication and engagement as they work on our clients’ sites, and keeping a track of what skills they are building so that we can find higher order projects for them and they keep growing in their chosen path.
With a contingent workforce the demand of employer branding is different than hiring for full time employees. It needs a dedicated Talent Community Manager who keeps them engaged and leverage that community to listen to their concerns. The community is key also to getting referrals for more such people in the future. The most important thing for them is a smooth seamless experience being onboraded and getting their payments on time. Having a CRM system and a database that keeps track of their skills and giving them visibility to forthcoming projects is also critical to be considered as a future client they would choose to engage with.
About the author
Gautam Ghosh is Consultant – Talent Advisory Services at VBeyond Corporation. He is a HR Blogger and is available on Twitter at @gautamghosh