Coronavirus lockdown: Gig economy, or gagged economy?

April 19, 2020 4:44 AM

Thanks to the Coronavirus outbreak and the resultant global economic gloom, many freelancers today are out of work and bereft of opportunities, as companies cut losses and shrink budgets to survive.

Travel and fashion blogger and product reviewer Vaishali Shah; Gurugram-based Rachna Kalra works with authors and publishers to market their books; Mihir Shah, a Mumbai-based food blogger, traveller and freelance columnist; Faizal Khan, a Delhi-based freelance journalist; Bengaluru-based Durgesh Nandini has been freelancing as a PR consultant and community manager since she quit her job in March last year; and Arjun Tyagi, a consultant at New Delhi-based PR firm Kaizzen, who also works as a freelancer. (Clockwise)(Clockwise) Travel and fashion blogger and product reviewer Vaishali Shah; Gurugram-based Rachna Kalra works with authors and publishers to market their books; Mihir Shah, a Mumbai-based food blogger, traveller and freelance columnist; Faizal Khan, a Delhi-based freelance journalist; Bengaluru-based Durgesh Nandini has been freelancing as a PR consultant and community manager since she quit her job in March last year; and Arjun Tyagi, a consultant at New Delhi-based PR firm Kaizzen, who also works as a freelancer.

By Reya Mehrotra

Not too long ago, the emergence of the gig economy was being hailed by many as the dawn of a new era in employment. The thrill of not having a staid nine-to-five job, working at one’s own comfort and pace, being one’s own boss, so to speak, were some of the many reasons professionals left their stable jobs to branch out on their own. The widespread emergence of co-working spaces, especially in the metros, also aided the change. It’s no wonder then that the gig economy saw a boom, especially in the past decade. As per a report published in the March-April 2018 issue of Harvard Business Review, approximately 150 million workers in North America and western Europe had left stable organisational lives to work as independent contractors by 2018.

Cut to the year 2020. The situation hasn’t just changed, but taken a drastic turn. Thanks to the coronavirus outbreak and the resultant global economic gloom, many freelancers today are out of work and bereft of opportunities, as companies cut losses and shrink budgets to survive. According to an April 6 report in The New York Times, around 1.4 million freelancers in New York alone are looking desperately for alternative options to sustain themselves. The situation in India isn’t much different, with many freelancers struggling to stay afloat.

Despair & gloom
Bengaluru-based Durgesh Nandini has been freelancing as a PR consultant and community manager since she quit her job in March last year. While initially she did get some work, the scenario post lockdown has been very dismal, she says. “Nobody wants to give attention to freelancers at the moment. It’s because earlier one could go out, meet people, network and get work. Post the lockdown, work is possible only through word-of-mouth or professional networking groups,” shares Nandini.

Freelancers across the country are facing a similar situation. “This is the hardest time for freelancers as they are the worst hit. The economy wasn’t doing well even before the global pandemic and freelancers were suffering then too due to downsizing in most companies and organisations. But now, because of the slowdown, companies are cutting costs and freelancers are the first to go. Company budgets have been cut drastically even for top media groups. Even if the situation improves, the residual effects will remain for a long period,” says Arnab Banerjee, a Delhi-based media consultant and freelance journalist.

Gurugram-based Rachna Kalra, founder, WindWord consultancy, a marketing and publicity consultancy firm, works with authors and publishers to market their books. “I had two ongoing projects that have been on hold because all the activities planned around them can’t be executed now and the authors can’t travel to different cities for promotions. The whole publishing industry has come to a standstill as the printing press, too, are not functional,” says Kalra, adding, “Interacting with people, though, has not been a challenge lately because most people are available on platforms like Hangouts, Zoom, WhatsApp videos, etc. Authors can be based anywhere and still get in touch with me, but the promotional activities are a challenge. Nobody knows how long it will take for things to get normal. For now, I too am refraining from charging my clients as it is not fair to charge when there is nothing happening. Once all this settles, we will reassess the situation and start afresh.”

Kalra says in the three years of her working independently, this is the lowest period in the market. “I started freelancing after gaining a lot of experience in marketing and publishing… Projects would come and go, but there was never this kind of uncertainty. If one did not have work for 15 days or, say, a month, one knew that another month would be better… But now, even people with regular jobs are at risk… salaries are being cut too,” she says.

Other freelancers agree. “There has been a considerable impact on everyone. A few of my freelance projects got delayed while I had to lose out on some because the companies could no longer afford to pay me. No one has extra money to pay freelancers at a time when even permanent employees are at risk of losing jobs.

Permanent employees still have a fixed source of income, but freelancers are the worst affected,” rues Arjun Tyagi, a consultant at New Delhi-based PR firm Kaizzen, who also works as a freelancer.

Another dampener, especially for freelancing journalists, has been the rise of virtual events. While helping curb the spread of the virus, these events have ensured zero to no work for such workforce. “Most freelancers travel for work. When events are virtual, why would anyone need freelancers?” says Faizal Khan, a Delhi-based freelance journalist, adding, “Remote working has been the base for freelancers for long. Now, the lockdown has made work-from-home nearly universal. Regular employees are assured of salaries, in some cases with cuts, but the flexible force, who are without work, has no such sustainable income to help us see through this extraordinary situation. The short term is bad, the long term looks uncertain.”

At a time when all restaurants, cafeterias, etc, are closed, food bloggers, too, have been sidelined. “There are no food outlets open for reviews. I used to travel and blog, but that has all stopped. I don’t expect travelling to resume or food outlets to open any time soon. My brother, who worked in a Mumbai-based MNC, also lost his job amid downsizing in companies. I only expect things to get better by the end of the year,” says Mihir Shah, a Mumbai-based food blogger, traveller and freelance columnist with Gujarati Mid-Day, adding, “I am only writing for my own website as newspapers won’t take food reviews.”

Mumbai-based travel and fashion blogger and product reviewer Vaishali Shah has a similar story. “I have been reviewing products since four years now and this is the first time the business has been so badly hit. I am unable to receive products from brands for reviews as the delivery mechanism isn’t functioning well. I am only editing my pending videos for now. I also don’t expect brands to pay me well now for a few months as the market is down,” says Shah.

Some positive
While the larger picture is one of despair and gloom, there is a small percentage of freelancers who are also benefitting from the situation, thanks to companies who are preferring to work with them during this time because they “cost less”. Take, for instance, Bengaluru-based freelance features journalist Barkha Kumari, who gave up her job in March to take a break and pursue her hobbies. She has also been freelancing since. “Media companies are generally running low on staff as they are trimming budgets and are increasingly relying on freelancers to pitch in. This gives them the advantage of having a temporary employee work for the company at a much lesser cost than a permanent one,” she says.

Experts say not all sections of the gig economy might be as affected by the economic slowdown. “There are two sections in the gig economy: modern gig workers comprising content writers, software engineers, event planners, etc. The other category is that of old-fashioned gig workers such as daily wage labourers and those involved in agriculture,” explains Mahesh Vyas, managing director and CEO, Centre for Monitoring Indian Economy, a business information company that produces economic and business databases. “Modern gig workers form a fairly diversified industry that has got impacted, but some sections like content writers, etc, can still continue to work, as websites need to be populated and companies need to communicate in new ways. Such sections would continue to be engaged, but will have to reorient their communication process. Software engineers and web developers, too, will not be impacted much. The entertainment industry or the tourism sector has been more severely affected,” Vyas says, adding, “India comprises more than 70% gig workers and only 20-25% of those are engaged in the formal sector. In the coming months, the government must take steps to stabilise the economy. In doing so, the gig economy would automatically spring back.”

Sunshine years
Not too long back, the gig economy was a robustly growing and well-recognised sector globally owing to its flexibility and cost-effectiveness. “A gig economy is cost-effective for companies, given that they can accommodate a temporary workforce according to customer requirements or business needs, leading to saving administrative and compliance costs. This framework allows startups and smaller companies to leverage skilled professionals as required. This relationship is rather symbiotic and both parties have equal freedom to look for options that cater to their needs,” Deepak Sood, secretary general, Associated Chambers of Commerce and Industry of India (Assocham), had said at a recent conference.

At the conference, the gig economy was especially talked about owing to it drastically transforming the work landscape across the world. Harpreet Singh Malhotra, chairman and managing director, Tiger Logistics India, which is engaged in freight-forwarding business, defined gig economy in a nutshell as “the existence of a temporary or part-time workforce instead of a conventional workforce”.

The Assocham report, Gig Economy—Aligning Consumer Preferences: The Way Forward 2020, said that remote workplaces that enable freelancing and support the gig economy were slowly replacing conventional office spaces. “Independence and flexibility have become the new work mantras, which have redefined the meaning of labour. The so-called flex or gig economy has always been prevailing, but it grabbed eyeballs and expanded quickly over the past couple of years. The new tech bug known as IoT has led to a transformation in the workspace arena. This has led to a clear demarcation between traditional and non-traditional sectors of employment. The gig economy is at a relatively nascent stage in India, but growing rapidly in the Indian labour market,” Niranjan Hiranandani, president, Assocham, was quoted as saying.

Road ahead
According to the 2018 PricewaterhouseCoopers report, Workforce of the Future: The Competing Forces Shaping 2030, around 60% of the people chosen for the survey (which had 10,029 respondents in all, with 8,400 of those not retired) from countries such as India, the US, the UK, Germany and China think that only a few would have stable long-term employment in the future.

This, in fact, will be a growing trend, as per the report, which talks about how in a competitive market many move frequently and stay only as long as the project or business lasts, and contract negotiations are key. In such a set-up, a university degree is seen as less valuable than specific and relevant skills or experience.

The report further suggests that, by 2030, the search for talent will become more difficult and will be facilitated by artificial intelligence. Interestingly, the report also predicts that, by 2030, there would be no human resources (HR) management, as it would be replaced by automation, outsourcing and self-organised teams.

As of now, though, the HR department is at the forefront of employee management in organisations, brainstorming strategies to minimise losses. The road ahead, however, looks rocky, many HR executives admit, saying that even though some companies might not be firing employees, there won’t be appraisals this year nor should one expect the recruitment process to begin any time soon. “Our company is going through huge losses as we deal with aviation and travel, and both the sectors have been directly impacted. So far, no jobs have been lost and no salaries have been cut, and the management is deciding on how to avoid letting go of employees,” says Abhinav (name changed on request), who is the HR head of an Indian conglomerate holding leadership positions in aviation, hospitality and travel-related services. “But if this continues, the management may take a call to deduct salaries of employees. There will be no appraisals this year and other unnecessary services of the company have been stopped too to lessen expenditures. I don’t think there will be any new recruitments, especially of contractual workers, for a long time… they will be more affected than permanent employees. This situation may also impact how current and new employees are paid in the near future,” he adds.

Uncertainty ahead

* Around 150 million workers in North America and western Europe left stable organisational lives to work as independent contractors by 2018, as per a 2018 report by Harvard Business Review

* Around 1.4 million freelancers in New York are looking desperately for alternative options to sustain themselves currently, as per an April 6 report in The New York Times

* Around 60% of the 10,029 people surveyed for a 2018 PricewaterhouseCoopers report, Workforce of the Future: The Competing Forces Shaping 2030, from countries such as India, the US, the UK, Germany and China think that only a few would have stable long-term employment in the future

* By 2030, the PwC report says, search for talent will become more difficult and will be facilitated by artificial intelligence

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