‘Gig economy’ Grows Globally: Will Conventional Ways Of Work Change?

The trend of an increasing number of people veering away from traditional employment models in favour of undertaking freelance work is termed the “gig economy.” As per a study by two Harvard economists, the alternative work arrangements have risen by 66 per cent in the last decade.

This trend has got an impetus in India with big firms like Wipro and Infosys hiring contingent workers (a provisional group of workers working on non-permanent basis) on a project to project basis. This trend is immensely popular in the developed economies as well. As per an EY report, 50 per cent of organizations have seen an increase in their use of contingent workers over the last five years and the contingent workforce in the United States has grown by 66 per cent in the past 10 years.

Praveen Rawal, Managing Director, Steelcase India and Southeast Asia told BW Businessworld, “The need for flexible working and healthy living is fast becoming a deeply embedded yearning of our time. According to a study of 12,000 employees across 17 countries by Steelcase, more than half of employers never allow their employees to work away from the office. However, many workers are moving toward the agile path because they are seeking intuitive, simple-to-use tools that empower them with workplace choice & control.”

According to global freelancing and crowd-sourcing marketplace Freelancer.com, India is one of the top countries in the world where gig economy culture is on the rise. Out of over 4 million users from India, more than 3.5 million are registered as freelancers on Freelancer.com. A gig employee has more control on his time, has the flexibility to choose the kind of work he/she wants to do and doesn’t have to fear about the future of the company.

Amit Ramani – Founder & CEO of Awfis Space Solutions told BW Businessworld the reasons behind the growth of this trend, “Cognizance of the need for better work-life balance

- Increasing time taken to travel

- The clear definitions of organizational structure and hierarchies thereof are dissolving, it is more about people working as teams and flexible work options are lending to this further

- Technology & IoT is further leading to the diminishing need for physical face to face interactions. Work is getting done from wherever and whenever one wants it.

- Outsourcing – a portion of the tasks can now be moved out to freelancers or teams who take up such opportunities”

Freelancers are changing the way we think about work, with their flexible schedules and multiple employers. Increasing numbers of skilled professionals are driving the growth of the gig economy. With lakhs of freelancers already operating in the market via online marketplaces, India could emerge as a leading destination for this shared economy model of employment in the Asia-Pacific region. Gig economy in India is being fuelled by start-ups.

However, there are some concerns regarding this concept as well. Enumerating the points why freelancing is not the best option for many, Rawal said, “Firstly, in India, there are the obvious infrastructure voids in areas such as transportation and utilities, which reduces how efficiently people can get to and from work. Most businesses in growth markets have limited space for large employee populations which hinder their ability to create effective work environments. Highly engaged employees prefer flexibility over how and where they work. They can concentrate easily, and work in teams without being disrupted.”

In India, very low wages are paid to the freelance workers. There is no minimum wage law for such employees. In addition, the freelancers find it extremely difficult to get credit from financial institutions as they have no job security. “Another prevailing apprehension for employees is the need for a collaborative and social approach. Businesses are not fully harnessing the power of networking. Sometimes called ‘entrepreneurs in residence’ or ‘intrapreneurs’, are boundary-pushing, out-of-the-box innovators in large organizations who are actively looking for networking opportunities, away from that traditional corporate hurdles,” added Rawal.

On the employer side, their confidentiality might be compromised as a freelance worker might be working for two competitive organizations at the same time. They can’t get the benefit of team-effort with the freelancers and since the employees are not accountable to the organization, many times they don’t follow deadlines or quality standards. Ankit Bohare, the founder of a media blog, Therawstraw, told BW Businessworld, "Freelancers bring in a lot of energy and creativity. You can pool their talent and optimize it for the growth of the organization. However, sometimes they fail to deliver and there accountability is also an issue. Now, I try to work with the freelancers who I already know."

An effective measure that can go a long way in reducing the risks for the employers is a sound contract. Ramani enumerated these steps for an employer which can help him negotiate compromise with confidentiality:-“Draw up water tight contract with relevant non-compete and confidentiality clauses

- Discuss openly and upfront with the consultants

- Talk clearly about the ramifications if the contract is breached”

In spite of its shortcomings, the trend shows no signs of slowing down. However, a few years down the line, we might see some governments bringing in legislation for the contingent workers.