A major driver of the gig economy is the quest for work-life balance. Younger professionals lay great emphasis on family life and personal aspirations.
- By Dilipkumar Khandelwal
Corporate roles and structures, industries, and even economies are experiencing what I view as creative destruction. One of the major reasons for this is the introduction of new technologies that allow talented professionals to farm out their skills to several companies instead of being attached to only one. This phenomenon is what we know as the ‘gig economy’ (freelance economy). I have read that there is a significant rise in the number of ‘gig workers’ in India, aided by technology that has made remote working common. One indicator of this is the mushrooming of co-working spaces in urban centres. Here, professionals and businesses can connect to forge mutually beneficial bonds.
Given its growing popularity, I wouldn’t be surprised if the gig economy becomes all-pervasive. That would be a boon for India, given that four million people enter our workforce every year. With businesses cautious about adding to their rolls, the gig approach could result in gainful employment for many. Companies benefit too because they can, based on client requirements, take on merely a temporary workforce – saving big on administrative and overhead costs. Time-bound contracts are the answer also for smaller firms and startups that may not be able to afford regular employees or professionals with specialised skills. The professionals benefit by getting to choose from a wider array of part-time employers and varied projects. This is a win-win model.
Let’s not forget this is an experience-driven generation that doesn’t want to be tied down to fixed corporate structures and norms. In return for professional freedom and a wider choice, it is willing to take a certain level of risks when it comes to earnings. In a study this year by NobleHouse, a platform that connects companies with talent, 73 per cent of respondents said they would prefer freelance work to a full-time job. A study two years ago by Ernst & Yong on the ‘Future of Jobs in India’ claimed 24 per cent of the world’s gig workers are in India.
Why Gig Economy?
What this tells me is that there is an entire value chain being built – from platforms that connect gig workers to businesses, to those that manage workflow and payments. It also tells me that the old models of employment are changing. As an extension of this argument, remote teams connected by technology will be the dominant trend of the future. Here are some characteristics of the gig economy:
- The biggest advantage for a company is the cost-saving on benefits and overheads. For the gig worker, it’s about finding work that he/she has a passion for and the credibility rub-off from associating with major brands.
- Work hours are getting flexible, with only deadlines being sacrosanct.
- A major driver of the gig economy is the quest for work-life balance. Younger professionals lay great emphasis on family life and personal aspirations. Therefore, they seek a culture that allows them flexibility as well as work that they find fulfilling.
- There will be greater investment in technology that allows diverse teams working different hours in different geographies to collaborate seamlessly. This maximises productivity and, therefore, profitability. This is borne out by experience – people working from home or an environment they are comfortable in are more productive than when in office. Incidentally, they tend to be happier and less stressed too.
- Since geography is no longer a limiting factor, nothing stops a young professional in a small town from working for a large corporation headquartered in a metropolis. For the corporation, it widens the talent pool it can choose from.
The gig economy isn’t without its challenges. While it is more evolved in the West, it is relatively new in India. We are still figuring out how to get the best out of it and to ensure gig workers are not taken advantage of through unfair remuneration or workloads. Also, given their status as freelancers, they may not have adequate protection against delayed payments or defaults. Lastly, the lack of technology access, especially in smaller towns, is a huge hurdle.
However, as Indian companies wake up to the opportunity, the gig economy will grow. I see professional services, the development sector, information technology and startups generating high demand for gig workers. The gig economy is a solution for our times. In a tough global business environment, there is a premium on talent, efficiency and savings. Gig workers provide just that.
(Dilipkumar Khandelwal is a business mentor, angel investor, and former MD at SAP Labs India. Views expressed are the author’s own.)