Gig Economy Gaining Workers in India

India is emerging as the third largest online labour market. Online Labour Index survey 2016 shows that India-based employers represented 5.9% of all projects/tasks posting for online labour of which 45% were for software development and technology projects.

This trend suggests the changing nature of employment in the IT-BPM sector. This trend was reaffirmed as 45% of the survey respondents viewed new ways of working such as freelancing as an important megatrend shaping the industry.

What is a gig economy?

In the present context, a ‘gig economy’ involves a temporary contractual job or short-term contract or freelance work that a person may take, on a project-to-project basis, for which the payment is made once the task is completed. The gig economy gets its name from each piece of work being akin to an individual ‘gig’.

A gig economy encompasses all platforms that hire independent contractors, consultants and workers in different sectors, such as information technology, content creation, social media marketing and communications, food and beverages, creative fields such as art and design. In effect, it means the existence of temporary or part-time workforce instead of a conventional workforce.

The evolution of the digital age can be considered one of the major reasons for the growth of the gig economy. Workers or independent contractors get paid for each gig or job they do, and this very principle is the basis of all internet applications that involve this temporary workforce.

Gig economy in India

Given the absence of any codified Indian laws in this space currently, the persons working in the gig economy, based on the nature of their engagement, are categorised as independent workers or independent contractors. Freelancers are attracted to the gig economy because they can follow their niche and, at the same time, leverage the flexibility and independence that comes with it.

A worker or independent contractor has the choice of selecting his or her work hours and at times, even the mechanism through which he or she wishes to complete the work. Such workers or independent contractors can work from home, especially when the project is related to arts and design, information technology or creative writing. This also leads to freedom of choice for both, the employer as well as the worker or independent contractor, to look for other suitable options due to no restriction with respect to proximity to the workplace.

Upsides

A gig economy is also cost efficient for companies, given that they can accommodate temporary workforce, according to the customer requirements or business needs, leading up to saving administrative and compliance costs that they would otherwise incur if they choose to hire full time or regular employees, especially in cases where business models do not involve the engagement of permanent workforce.

It may not be possible for companies and start-ups to afford skilled professionals as full-time employees. In such situations, companies may choose to enter into contracts with the professionals for a specific time period. This relationship is rather symbiotic, and both parties have equal freedom to look for options that cater to their needs.

Downsides

People who are part of the gig economy may have several benefits, including the independence to choose their hours of work, workdays, holidays and preferred organisations. However, the key disadvantages in a gig economy may include instability in a job, uncertain pay schedules, unsteady workload, and a lack of social benefits and/or any statutory protection akin to a worker in permanent employment.

The downside of a gig economy is that, unlike traditional employment, workers in a gig economy do not seem to be eligible for any social benefits such as insurance, medical benefits, employees’ provident fund, bonus or gratuity. These gig workers also do not have any employment-related rights, except in some cases involving any breach under their respective contracts.

Several websites, such as Upwork.com and Tapchief.com have taken steps to provide a platform for employers to find the right human resource for their work. Freelancers offer a plethora of skills for prospective hirers to choose from, and are given the opportunity to source different projects globally.

The Online labour Index, which was published under the iLabour project of Oxford University, presented the online gig economy equivalent of conventional labour standards by analysing availability of online labour across different countries in various fields.

As per the results, the information technology and software industry were the most targeted in terms of a gig economy in India. This was further established when PayPal surveyed and published gig economy insights about India, and found that gig economies dominated the information technology domain, with 50% percent of the freelance workforce engaged in this sector.

Support for the gig economy from the government and policy makers might be the answer to the great Indian talent conundrum.