In this tech era, it is very common that we have heard about freelancers and their independence of work and time. Work from home was only a dream a few years back which only a few, like individuals in the creative field could experience. But from the last 4 to 5 years it seems very much possible with Gig Economy giving tough competition to traditional employment. Gig Economy has taken an upward turn and made work from home possible. Also, the hectic lifestyle of employees in the private sector has brought a positive picture in front of millennials.
Gig Economy is a free market system in which temporary positions are common and organizations hire independent workers for short-term commitments. The term 'gig' is a slang word for a job that lasts a specified period. The best examples are contract workers, consultants, etc. which show that Gig economy is not a new phenomenon, and it has been around for a while. It was previously unobserved, but with technological development, the barriers to entry have decreased so much that 'gigs' have become easily accessible to an unprecedented number of people. Once which was only seen as an offshoot, converted into a trillion-dollar industry with millions of participants.
Reasons for growing of Gig Economy
- Mobility - The workforce has become more mobile, and work can increasingly be done remotely via digital platforms. That means that freelancers can select among temporary jobs and projects around the world, while employers can pick the best individuals for specific projects from a larger pool than what's available in any given area.
- Hectic Lifestyle - Hectic lifestyles of employees in private sectors have created a negative perception of full-time employment among millennials. Factors such as growth opportunities, flexibility, better work-life balance, and the option to not acquire a college degree are encouraging millennials to opt for freelancing opportunities as opposed to corporate work culture.
- The start-up ecosystem - The start-up ecosystem in India has been developing rapidly. So, hiring professionals on a short-term basis helps cut down the fixed cost.
Gig Economy statistics (World)
- 57.3 million people freelance in the U.S. It’s estimated that by 2027 there will be 86.5 million freelancers. (Upwork)
- For 44% of gig workers, their work in the gig economy is their primary source of income. (Edison Research)
- 1 in 6 workers in traditional jobs would like to become a primary independent earner. (McKinsey)
- Deloitte’s latest millennial study found that 64% of full-time workers want to do “side hustles” to make extra money. (Deloitte)
- 1 out of 5 full-time independents has customers outside the U.S. (MBO Partners)
- 37% of full-time Independents are aged 21-38. (MBO Partners)
- 63% of freelancers think that having a diversified portfolio of clients is more secure than one employer and have an average of 4.5 clients per month. (Upwork)
- 79% of full-time independents said they were happier working on their own than at a traditional job. (MBO Partners)
Gig Economy statistics (India)
In 2018-19 as many as 72% of all gig projects were in large corporates and professional service firms compared with 52% two years back - The Economic Times India
70% of employers used gig workers at least once or twice for solving organizational issues in 2018 - The Economic Times India
2017 EY study on the “Future of Jobs in India” found that 24% of the world’s gig workers come from India - QZ
India is home to the second largest market of freelance professionals (about 15 million) who constitute about 40% of total freelance jobs offered worldwide - ICRIER Future of Work in the Digital Era: Potential and Challenges for Online Freelancing and Microwork in India
India’s gig economy now among largest in the world - Economic Survey, 2020-2021
Impact on Employers/Organizations
Until now organizations owned their employees’ skill and also had commitment to work for 9 to 5 jobs .They would in return lure their employees with different incentives and help them grow in their careers.However, the thought that a job is secure for a lifetime is not secure in itself anymore. While the transitioning generation between 1990 and 2010 accepted this fact, the next generation is in denial of commitment caused by job insecurity.
- Cultural Change- With a change in the collective thought of millennials, organizations will need to adapt themselves to a more flexible and modern workforce culture to retain permanent employees. The Gig Economy is going to impact future hiring, where gig workers prefer flexible work timings, output-oriented projects, self-managed leadership, and individual growth on every project completion. Organizations and professionals both need to come halfway to solve these differences.
- Control Changes- Gig Economy workers usually do not work in offices. They may work from their home, from a cafe, a co-working space, or even while traveling. This is the benefit that most attracts the new generation. While organizations still believe in physical workplace presence, managerial level professionals need to find solutions to this for gig workers. E.g.: to work from the office only 3 days a week
Impact on Job Seekers
With the following increasing trend of Gig Economy, Job seekers in coming years will have more opportunities than today. They will be more independent in terms of what to do and when to do it.
Some of the benefits which Job seekers will get are:
- Higher Income - Gig workers can earn more as they can take projects based on their choices or can increase the hourly rate. Little or no expenses in the form of travel, eating out and other expenses involved in ‘getting ready for office’ regularly results in higher savings.
- Test-Drive Something New - People love to do something new. But financial stability restricts this. With the increasing Gig economy, it is possible to explore a passion and see if it’s something more than a passing fancy, without give up the primary source of income.
- Flexibility - Flexibility to choose when and where to work, which clients to take, and to choose to work within desired timeframe.
- Risk mitigation - With different varieties of work at hand, it will help mitigate risk and loss.
According to Peter Miscovich, Managing Director, Strategy + Innovation, JLL Consulting in New York, by 2020 gig workers will comprise half the workforce, and as much as 80% by 2030.
Change is inevitable. Global forces will continue to make the gig economy relevant. It is up to us how we perceive it. If individuals and organizations want to consider proactive strategies to beat the global competition, they cannot afford to ignore the freelance workforce. The concept seems very different than the traditional form of employment, and it can be hard for job seekers as well as organizations. But there are so many benefits that come with it which can be useful to both. Also, there is a rise in freelancing platforms which is helping the Gig economy grow more. Many home-grown platforms such as Upwork, Truelancer, and Guru provide access to high-skilled freelancers. The number of freelancing platforms has significantly increased—from 80 in 2009 to 330 in 2021. These platforms boast of a clientele comprising not only start-ups but also Fortune 500 companies.
There are some drawbacks in Gig economy such as individuals may not receive incentives from their employers such as Pension, Medical insurance, but these have been attempted to be resolved too. To aid gig workers, the government passed the ‘Code on Social Security, which will provide workers with life and disability cover, accidental insurance, health & maternity benefits old age protection, and others. Under this code, the central and state governments will primarily fund social security measures, with a nominal contribution (1-2% of their annual turnover) by the aggregator. Also, the contribution made by the aggregator/platform will not exceed 5% of the amount payable to gig and platform workers.