The ‘gig economy’ over the past couple of years, has evolved from being just another employment fad to a major macro-trend in the human resources and capital ecosystem. As the term suggests, workers are paid on a ‘gig’ basis instead of regular wages and freelance workers take on temporary/independent contracts.
A recent study by McKinsey has estimated that up to 20-30% of the workforce in developed markets is engaged in independent work. Furthermore, the gig economy has now started revolutionizing not just the everyday services like for food delivery executives, app-based drivers but also high-end permanent staffing roles like that of software engineers, UI-UX consultants, full-stack engineers, CAD designers; to name a few.
In the wake of mass commercialization of voice and data connectivity, today’s digital-first workforce now prioritizes flexibility, freedom, and remuneration whilst evaluating and considering their next job/gig and hence, this macro-trend is set to cause a series of disruptions in the conventional landscape of professional staffing and even other touch-points of a candidate’s lifecycle which includes talent acquisition.
Gigs: why they’re here to stay
According to a report from PayPal, 1 in every 4 freelancers is from India. Dominating the software ecosystem too, India accounts for 50% of the global freelancers – a majority of whom are under the age 40. And thus, the gig economy is not just a short-term disruptor as even with the most basic interventions of fair commercial-contracts and streamlined corporate (HR, Procurement, etc) policies and processes, the gig economy could exponentially change the experiences of the hundreds of millions of people globally who are under-employed or unemployed as well as significantly change the operations and functioning of the employers hiring them.
Individual & organization: gigs are good
It is a trend which is on an upswing not just in India, but in other parts of the world too. In the US, it is predicted that by 2023, 50% of the workforce will be freelancers. Some of the aids like freedom, high level of control, wages on a task basis, duration of a task, work-life balance, better work culture etc. make independent work more agile and helps the young population to move between roles, organizations and across geographic boundaries.
On the organizational front, it gives companies the flexibility to scale up and down based on their job, product or service requirements. The gig economy allows the organizations to judge a person’s assets and understand their liabilities and decide to hire them full time or not. In an Indian context, it will dramatically increase employment prospects through a micro/niche ecosystem. Moreover, given that there are no geographical barriers for an organization or the employee, it reduces the operational costs leading to healthier P&Ls.
‘G’ for gig: ‘G’ for growth
An industry estimate suggests that the Indian freelance/gig market size is expected to grow to a mammoth $20-30 billion by 2025. Compounding these numbers are startups that are powering the gig economy by hiring talent across the profiles of technology, marketing, finance, and HR; on freelance or need-basis. IT companies too are gradually transforming their mindset to the gig economy by opening roles for freelance consultants based on their seasonal or specific project requirements.
Of the leading metros in the country, New Delhi, Mumbai and Bangalore contribute a fair amount to all flexible work opportunities available in India. Additionally, the advent of increased automation, greater technology inclusion, deeper internet and mobile technology penetration; have only catalyzed the gig economy and the world of work, especially in the professional staffing industry.
Disruption in the staffing industry
If we compare our staffing industry with the west, it is still at 2% of the overall workforce of the economy. In future, when more people will be interested in a temporary job, the expansion of this industry will be very high in terms of the pace gig economy is growing. Hence, changing our business models too. For example, staffing is just a contractual employment where an employee is in a full-time job working for some organization.
Going forward, we will have our own set of freelancers which will be utilized based on the work. Companies like Adecco may do staffing on hour basis as per the job requirements. It helps a company like Adecco providing a much larger exposure to the entire country rather than focusing on a particular city/region. We can reach out to more tier 2 and tier 3 cities as there is abundant of talent across the country.
External factors will be a change in a particular business model for a company like Adecco and it will require a fragile manpower to do the job for a short period of time. Moreover, internal jobs such as recruitment, processes, and payrolls, will also go through a shift.
We can also have freelancers across the country giving maximum results. Recruitment will be more technology and output driven in future.
In terms of P&L also, it is only going to add to the advantages. Variable workforce or gig economy will help in reduce an organization’s costs and achieve the maximum results. For example, in industries like e-commerce or financial and accounting, companies hire executives for the limited period of time at their peak of a season which add value to the company. This kind of model gives a company a flexibility to hire people on their own terms and get the work done as and when required, keeping the costs under control.
The future: gig to go big!
Given that India’s millennials are looking for more than job satisfaction today, gigs that encompass employee engagement, career mobility, development feedback and hyper-connectivity through integrating IT infrastructure are some of the key aspects which an HR of any company will have to focus on in future.
At the same time, for independent workers to stay atop the gig economy wave, gig-workers need to develop differentiated skills where managers can start seeing them as partners, rather than mere vendors.