Gig Economy & the Future of Work

Gig Economy & the Future of Work

Lying on the couch, I’m performing on my laptop. a couple of minutes later, I find myself scrolling through the infinite food options on Swiggy. You’ve probably used one among the various ‘food-tech’ apps either to look for a restaurant, make a reservation at your favourite bar. Restaurant picked, the discount code applied & order placed! The delivery guy soon arrives. he’s the human link during a technology-driven industry of convenience. He has several counterparts — those that drive you back from a late night party to those who bring you groceries or those that lend you their home for your trip — living the courier lifestyle.

Welcome to the Gig Economy where a military of workers called “giggers” are creating their own destiny as companies like Uber, AirBnb, Ola, Zomato, Swiggy et al. are using technology to disrupt industries. This shift claims to specialise in the worker where one gets to settle on his/her own work hours during a hi-tech frontier, departing from the standard 9 to five jobs!

The term “gig economy” was first coined by journalist Tina Brown in 2009. She wrote about the trend of workers pursuing “a bunch of free-floating projects, consultancies and part-time bits and pieces while they transacted during a digital marketplace.” To sum up, Gigs are either skill-based assignments or need-based tasks.

As they assert , there’s nothing new under the Sun. an equivalent holds faithful the Gig Economy which perhaps existed from ancient days where a person decided to hunt and gather. And, the formula is similar: leave , explore, learn more! Interestingly, the full-time employment culture, which has redefined what a standard job seems like , is additionally a reasonably recent phenomenon.

Where it all began?

Prior to the economic revolution and until the Victorian era, people worked multiple jobs to piece together an honest living. The Gig Economy of unpredictable employment patterns sprang up when industrial jobs were seasonal. Historian (at Cornell University) Louis Hyman’s years of research revealed that companies like Manpower Inc. and Kelly Girl provided temporary labour (mostly women secretaries) to big corporations to bridge gaps within the workforce.

“The technological revolution was preceded by the industrious revolution, a social reorganisation of individuals , which involved groups working together in small spaces, dividing up tasks in order that each labourer didn’t need to be as skilled” Hyman explains.

As the noise for better employee welfare and benefits got shriller and louder from trade unions between the 1930 and 1950s, an incredible shift in larger corporations’ attitude towards employees was evident. With legal systems in situ following the labour movement, corporations began prioritising employee benefits like Social Security , medical leaves and paid leaves, unemployment insurance, insurance , pensions, life assurance , etc.

Economic downturns fuel Gigs

Piece-work has long been a part of middle-income workers ever since the economic revolution. Part-time work witnessed a spike world over from the 1980s when traditional organisations began moving faraway from full-time employment offers towards short-term, more flexible staffing opportunities. This was a results of lean revolution to chop costs and specialise in short-term profits. within the following decade, agencies for temporary workers spouted where 85% of the businesses began using temporary labour by decreasing employee benefits.

Gigs generally seem hot during a recession which was exactly what happened during the 1991 economic downturn. As a results of job losses, alternative work began gaining ground as a response to the weak labour market. a couple of years later, the Internet’s evolution in 1995 and therefore the inception of Craigslist within the consecutive year — all appeared to work wonders in boosting the prospects of the choice workforce.

Between 1995 and 2005, the amount of workers with alternative employment arrangements for his or her main job went up from 12.1 million workers to 14.8 million in 2005 within the US, consistent with the Bureau of Labour Statistics.

The fad of fast-growing subset of gigs continued to awe people while Amazon became one among the primary companies to leap onto the Gig Economy bandwagon in 2005. But the subsequent years resulting in the good Recession in 2008 made life difficult as money was tight and jobs were scarce. People searched for ways to supplement their stagnant wages and dwindling savings. This pent-up demand was met with a replacement sort of work that enabled the gig economy. Simultaneously, companies began shifting from antiquated full-time workforce model to contract-based (on-demand) workers.

Tech-driven industry of convenience

Interestingly, the amount of recession saw giggers crowding the customer service segment of labor . The inclusion of a versatile workforce eventually opened organisations to the thought of being more agile and accommodative. What changed was that 70% of employers within the developed countries truly believed that giggers increased their profitability and efficiency.

On the opposite hand, the app-based economy has also made us (consumers) smarter, better connected and more demanding as we love the speed and convenience that the digital platforms offer. Not only has this enabled in consolidating remote and mobile workers by directly connecting service providers to customers but also made consumers’ voice more powerful.

Though there’s no accurate estimate of their numbers, it’s projected that this ‘flex’ or ‘mobile economy’ will comprise half the workforce by 2020, and the maximum amount as 80% by 2030. Gig Economy is symbolic of the type of contract work expanding into every corner of the economy — more just like the reincarnation of contract work.

A McKinsey study estimates that 20–30% of the workforce in developed countries already engages in some sort of independent work. Adding to the present , India is home to the second largest market of freelance professionals (about 15 million), standing next only to the US (nearly 53 million). Most of them have full-time roles but also work side-hustles which they earn from. These 15 million Indian freelancers contribute to about 40% of total freelance jobs offered worldwide, a report by ICRIER states.

The proliferation of apps like Uber, Lyft, AirBnB, TaskRabbit et al. have defined the direction of today’s global economy by disrupting sclerotic industries which don’t adapt easily. However, all isn’t hunky dory during this fluid workforce.

It’s not all sunshine & rainbows in Gig Life

The Gig life comes with many riders. In fact, several companies supporting the Gig Economy are blatantly accused of exploiting their workers as there’s no safety net for giggers who are a part of the ecosystem. within the process, their rights and pay is compromised. Gig life also means there are not any standard benefits like pensions, hikes, sick pay, leaves or holiday entitlement.

Since most of the low-skilled gig workers are poorly paid and earn only supported the amount of working hours clocked, financial insecurity also looms large. With this impending threat, they often hand over their social life to overwork and make ends meet.

With payouts not guaranteed and gig work not being long-term, they find it difficult to urge a loan or mortgage. aside from this, they even have to pay taxes and file returns, regardless of their wages. Some gigs, specifically, require licenses and permissions, counting on the region they’re operating in, making it even harder and fewer reliable within the long-term.

For instance: Uber drivers can’t really decide where they work. they’re constantly nudged towards locations where the app wants them to be. And, if they need to form extra money , they can’t be choosy about their working hours. the thought of this new boss — an algorithm — is different and more complex within the Gig Economy as we’ve traded human bosses to AI.

Meanwhile, workers also got to find their own gigs which may be a cumbersome process because it isn’t easy unless you’ve got a longtime relationship with a client. With no benchmarking system for freelance work, a gigger is usually accused of overpricing projects or succumbs to ridiculous price bargains. Geographic flexibility within the gig economy also means more competition which successively means lower bids for an equivalent work. As a gig becomes popular, earning potential will always decrease. And, as earnings decrease, workers are forced to regulate their schedules to maximise their income.

Though the gig economy has helped workers leverage their skills, knowledge, and networks, it’s shrunk the company resource pool by creating higher attrition rates among organisations. It also involves the regular implementation of latest technology platforms to manage churn faster. this will be very time consuming and dear .

But there are advantages to being a Gigger

Companies supporting the sharing economy have helped create a completely unique sort of business model where workers have an opportunity to earn money on their own schedules either through in-app payments and ratings-based marketplace ecosystem or by showcasing their expertise on tech platforms like UpWork, Fiver, PeoplePerHour, etc. they will either be freelancers or full-time workers with side-hustles or those on temporary contracts.

According to a report by Noble House titled, “The way forward for Work is Anywhere — Gig Workforce”, 70% of the Indian Corporates have used gig workers a minimum of once for major organisational issues in 2018. Further, the report said, nearly 45% of the human resource heads surveyed want to rent gig workers in order that they will supplement the talents of the prevailing workforce and 39% would do that to scale back the value and 10% for filling temporary vacancies in their teams.

As bigger corporations are willing to experiment with temporary workers, they will save costs as employee training and employee protection expenditure go down drastically and proportion quickly. during this model, gig workers get personal time as they choose their own work hours which allows them to network and improve productivity.

The discretion also helps them decide the worth on their projects and, at a time and place of their choice. They even have the advantage of finding a spread of jobs and being at their creative best as every project might be different. Obtaining education or learning new skills is feasible for gig workers, given the pliability of your time and work. Sometimes, gig workers earn quite full-time employees as pay varies from client to client.

In fact, several studies show that folks with more control over their schedules and adaptability in choosing their work are significantly more satisfied with their work than their peers who hold regular salaried jobs, despite losing out on benefits and security. For a transparent majority, it’s a conscious decision to embrace the gig economy.

Companies Supporting Mobile Economy

The companies enabling the gig economy are essentially replacing contracting companies. For instance: If there’s a marriage and I’m trying to find manpower, there an app for supplying the manpower. Similarly, if I’m making a billboard film and am trying to find background actors, I could also use an app to rent them than to approach a talent agency. More importantly, these platforms are powerful enough to serve your demand real-time. I don’t got to book a ticket beforehand nor do i want to book a cab hours before my schedule anymore. Everything’s available on my fingertips!

Upwork is another platform that gives gigs from low to high level skill set, seeks to attach businesses to a reliable and bigger pool of quality talent, while workers simultaneously can enjoy freedom and adaptability to seek out jobs online. Another example is that of ‘Flexing It.’ it’s a network of over 50,000 freelancers and 19,000 clients and it aims to make a marketplace for specialised, experienced independent consultants in India. So, if you’re trying to find highly skilled consultants starting from senior associates to experienced directors and strategy consultants, then this is often the place to be!

Similarly, Uber’s disruption of the taxicab industry, based largely on identifying opportunities for innovation in transporting people, has democratised workspace globally. And, now product companies like Zomato, Swiggy, Food Panda, UberEats, UrbanClap, HouseJoy have all followed an equivalent model, contributing to the Gig Economy.

Growing pangs of unrest

Despite the convenience of having the ability to open an app, book a cab and jump into it, the worldwide expansion of gig work has caused friction and controversy. In November 2018, Uber and Ola drivers went on a strike to protest against the autumn in their earnings and an identical strike was administered by Swiggy delivery executives in December 2018. These workers aren’t represented by any trade unions and are generally considered to be self-employed. Going by that logic, some platforms like Swiggy, Zomato and Uber Eats which claim to be neutral, mandate their delivery executives to wear a consistent , indicating how their workers must do their duty of acting like employees.

With app-based tech aggregators facing such repeated challenges over the stress of employee benefits from gig workers, the threat of automation always plagues them because it is seen because the way forward for businesses. Moreover, autonomous vehicles or driverless cars are likely to prove much safer than conventional ones, they believe. Similarly, e-commerce giants are experimenting with drone delivery which eliminates the hassles of navigating through traffic snarls or relying heavily on human resources.

A dire need for regulation

Even as a sizeable chunk of workers remain outside the normal employment structure, there’s a dire need for regulations or policies which create a security net for workers within the sharing economy. When it involves managing the on-demand workforce, many organizations suffer from fragmented governance models and manual processes.

Currently, one proposal being floated is to make a 3rd category of worker, sitting somewhere between self-employed and employed — the independent worker. This classification bridges the gap between traditional employees and contractors, acknowledging the unique characteristics of independent workers and giving them the proper to bargain for cover from employment discrimination.

Europe and Britain have already got introduced legislation which provides more leverage and power to gig workers in choosing predictable hours of labor along side benefits of leaves to place an end to “abusive practices” around casual contracts.

In India, the gig economy is at a nascent stage but is growing rapidly. consistent with a Millennial Survey by Deloitte, 16.8% of millennials evaluate career opportunities by good work-life balance, followed by 13.4% who search for opportunities to progress, and 11% who seek flexibility. this is often one among the most reasons why millennials are interested in the gig economy.

Not falling behind, the Indian Government in 2015 introduced a contract scheme under its Digital India platform. While it’s recognised gig workers and entrepreneurs, the principles are still fuzzy. Since there’s no proposal for a regulation protecting gig workers in India, benefits like overtime pay, paid or leave , health or medical allowance, protection from harassment or discrimination among gig workers are still not recognised.

However, the Indian government could model a policy for gig economy around innovations like Australia’s GigSuper, a fund which makes it easier for gig workers to save lots of for a pension. as long as workers within the gig economy are vital to the ever-changing landscape of the company world, insisting that these gig platforms follow the principles laid by the govt would give workers greater protection while ensuring that the gig economy lives up to its enormous promise.

A full-time reality

As the current workforce’s obsession with freedom intensifies, the gig economy will still grow and disrupt businesses. The Gig Economy’s digital platforms consistently deliver choice, control and options for people that prefer to build portfolio careers. those that aren’t reliant on gig work, use it for supplemental income while those that are charmed by its flexibility and pay are seeing it because the best overall option.

Within subsequent five years, it’s predicted that the worldwide workforce will comprise nearly 50% independent contractors. this is often both a blessing and disguise, especially for younger people entering the workforce. within the past, even those without a career path would find yourself falling into a pleasant profession by simply following a typical track. But faced with the ever-changing face of labor during a tech-driven world, one must be more skill-oriented and driven a minimum of to form it to the primary of the various professional ladders. So, we’d like to form investments in our infrastructure and make changes to the way we lookout of workers.

Additionally, app-based businesses will become a crucial a part of the world’s economy, compelling traditional ones to adapt an app-based labour market in ways we cannot yet anticipate. Maybe, your job of the longer term are going to be a gig and you’ll be getting more freedom from your employer through an app, a technology or a robot! except for now, the Gig Economy is here to remain and features a great distance to travel before side hustles become a full-time reality!