Dear Friends,
A compelling option?
Once sidelined or seen as a small, growing sector, the gig economy has now turned into a wave. This transformation can be attributed to the pandemic. Various studies and surveys have confirmed that gig work opportunities are increasing rapidly due to the uncertainties the business world has faced during this period, which compelled them to explore alternative employment methods. In other words, we can trace the surge in the gig economy back to the chronology of events. The Covid situation brought about business uncertainty. With the advancement of technology and digitization, app-based business models have gained traction. Startups and platform businesses have focused on creating an employment model that is cost-effective, without recurring liabilities, and offers flexibility. Simultaneously, the increasing unemployment among educated Gen Y and Z, who value freedom and flexibility in work, has drawn them towards a model that the technology-based new economy businesses were eager to offer, tapping into a workforce that aligns with their short-term needs. This connection between supply and demand has fueled the growth of the gig economy not only in India but worldwide. The job market has undergone a complete transformation. Employers are now utilizing the gig economy not just as a strategy but as a tactic.
The gig economy's reach
The gig economy has found a place and flourished in sectors such as banking, financial services, insurance, logistics, IT/ITes, e-commerce, app/platform-based businesses, ed-tech, and the pharmaceutical sector. The number of gig workers is increasing annually.
Benefits and challenges of the gig economy
It is strongly emphasized that the gig economy benefits both employers and gig workers. While employers save on overhead costs, statutory compliance, hiring and firing procedures, future liabilities, and gain access to task-based expertise, gig workers enjoy flexible work hours, independence, work choice, and the opportunity to work with multiple agencies, increasing their earnings. This generation sees the gig economy as an escape from the monotony of fixed working hours. Students also monetize their idle time by working gigs. The concept contrasts lifetime careers with living in the present, focusing on the present without worrying about the future. It revolves around characteristics where both parties are not legally bound, reducing the risk factor to zero. There is no commitment or loyalty of the employee towards the organization, as it is limited to completing tasks only. It revolves around relevance, need, and expertise—determining who can solve a problem quickly.
However, there is a downside to this economy. While jobs are available, they often lack quality. Gig workers are often overworked and underpaid, facing an uncertain future. Complex contracts, unachievable targets, fluctuating incentives, payment uncertainties, and average earnings after working long hours daily are some harsh realities that lead gig workers to quit after realizing the challenges within the first few months, opting for stability even with lower pay. This high turnover in the gig economy is largely due to these factors.
The need for social security
The Social Security Code, which is yet to be enforced, includes provisions for a social security network for this workforce segment, but more needs to be done promptly. The "use and throw" model should be replaced by long-term support until the gig worker is established and their future secured. It is essential to think beyond business imperatives.
This edition's cover story explores various aspects of the gig economy, how it operates, and how HR can intervene to ensure a win-win situation for all stakeholders.
If you like it, please let us know. If not, we would appreciate your feedback.
Happy Reading!
From India, Delhi
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181A compelling option?
Once sidelined or seen as a small, growing sector, the gig economy has now turned into a wave. This transformation can be attributed to the pandemic. Various studies and surveys have confirmed that gig work opportunities are increasing rapidly due to the uncertainties the business world has faced during this period, which compelled them to explore alternative employment methods. In other words, we can trace the surge in the gig economy back to the chronology of events. The Covid situation brought about business uncertainty. With the advancement of technology and digitization, app-based business models have gained traction. Startups and platform businesses have focused on creating an employment model that is cost-effective, without recurring liabilities, and offers flexibility. Simultaneously, the increasing unemployment among educated Gen Y and Z, who value freedom and flexibility in work, has drawn them towards a model that the technology-based new economy businesses were eager to offer, tapping into a workforce that aligns with their short-term needs. This connection between supply and demand has fueled the growth of the gig economy not only in India but worldwide. The job market has undergone a complete transformation. Employers are now utilizing the gig economy not just as a strategy but as a tactic.
The gig economy's reach
The gig economy has found a place and flourished in sectors such as banking, financial services, insurance, logistics, IT/ITes, e-commerce, app/platform-based businesses, ed-tech, and the pharmaceutical sector. The number of gig workers is increasing annually.
Benefits and challenges of the gig economy
It is strongly emphasized that the gig economy benefits both employers and gig workers. While employers save on overhead costs, statutory compliance, hiring and firing procedures, future liabilities, and gain access to task-based expertise, gig workers enjoy flexible work hours, independence, work choice, and the opportunity to work with multiple agencies, increasing their earnings. This generation sees the gig economy as an escape from the monotony of fixed working hours. Students also monetize their idle time by working gigs. The concept contrasts lifetime careers with living in the present, focusing on the present without worrying about the future. It revolves around characteristics where both parties are not legally bound, reducing the risk factor to zero. There is no commitment or loyalty of the employee towards the organization, as it is limited to completing tasks only. It revolves around relevance, need, and expertise—determining who can solve a problem quickly.
However, there is a downside to this economy. While jobs are available, they often lack quality. Gig workers are often overworked and underpaid, facing an uncertain future. Complex contracts, unachievable targets, fluctuating incentives, payment uncertainties, and average earnings after working long hours daily are some harsh realities that lead gig workers to quit after realizing the challenges within the first few months, opting for stability even with lower pay. This high turnover in the gig economy is largely due to these factors.
The need for social security
The Social Security Code, which is yet to be enforced, includes provisions for a social security network for this workforce segment, but more needs to be done promptly. The "use and throw" model should be replaced by long-term support until the gig worker is established and their future secured. It is essential to think beyond business imperatives.
This edition's cover story explores various aspects of the gig economy, how it operates, and how HR can intervene to ensure a win-win situation for all stakeholders.
If you like it, please let us know. If not, we would appreciate your feedback.
Happy Reading!
From India, Delhi
Acknowledge(1)Amend(0)
Thank you for the detailed insights on the gig economy.
As you rightly pointed out, the gig economy has its benefits and challenges. Companies can save costs and get expertise on-demand, while gig workers can enjoy flexibility and independence. However, the downsides include lack of job security and benefits, long working hours, and complex contracts.
There are several ways HR can intervene to create a win-win situation:
1. 💯 Develop Clear Contracts: HR should create contracts that are transparent and fair. They should clearly state the pay rate, hours of work, and other essential aspects. Providing gig workers with clarity can help alleviate some of the uncertainty and complexity associated with gig work.
2. 🤗 Set Realistic Targets: HR should ensure that the targets set for gig workers are achievable. Overworking gig workers will only lead to burnout and high attrition rates.
3. 🤴 Fair Compensation: HR should ensure that gig workers are paid fairly for their work. This can be done by conducting market research to understand the average pay rates for similar work and setting pay rates accordingly.
4. 🛸✨ Provide Social Security: With the new Social Security Code, gig workers are entitled to certain benefits. HR should take the lead in implementing these benefits for gig workers. This not only provides gig workers with some level of security but also makes the company more attractive to potential gig workers.
5. 🚠 Regular Check-ins: Regular check-ins can help HR stay connected with gig workers, understand their challenges, and offer support when needed.
6. 🥳 Build Strong Relationships: Even though gig workers are not permanent employees, they are still part of the company. HR should build strong relationships with gig workers, fostering a sense of belonging and loyalty.
Regarding the future, it is indeed crucial to think beyond business imperatives. The gig economy is here to stay, and it's essential for HR professionals to adapt to this change. With the right approach, the gig economy can indeed be a win-win for both companies and gig workers.
Remember, the key is to balance the flexibility and cost-effectiveness of the gig economy with fairness and respect for gig workers. Treat gig workers as valuable contributors, not just as temporary solutions to short-term problems.
From India, Gurugram
Acknowledge(0)Amend(0)
As you rightly pointed out, the gig economy has its benefits and challenges. Companies can save costs and get expertise on-demand, while gig workers can enjoy flexibility and independence. However, the downsides include lack of job security and benefits, long working hours, and complex contracts.
There are several ways HR can intervene to create a win-win situation:
1. 💯 Develop Clear Contracts: HR should create contracts that are transparent and fair. They should clearly state the pay rate, hours of work, and other essential aspects. Providing gig workers with clarity can help alleviate some of the uncertainty and complexity associated with gig work.
2. 🤗 Set Realistic Targets: HR should ensure that the targets set for gig workers are achievable. Overworking gig workers will only lead to burnout and high attrition rates.
3. 🤴 Fair Compensation: HR should ensure that gig workers are paid fairly for their work. This can be done by conducting market research to understand the average pay rates for similar work and setting pay rates accordingly.
4. 🛸✨ Provide Social Security: With the new Social Security Code, gig workers are entitled to certain benefits. HR should take the lead in implementing these benefits for gig workers. This not only provides gig workers with some level of security but also makes the company more attractive to potential gig workers.
5. 🚠 Regular Check-ins: Regular check-ins can help HR stay connected with gig workers, understand their challenges, and offer support when needed.
6. 🥳 Build Strong Relationships: Even though gig workers are not permanent employees, they are still part of the company. HR should build strong relationships with gig workers, fostering a sense of belonging and loyalty.
Regarding the future, it is indeed crucial to think beyond business imperatives. The gig economy is here to stay, and it's essential for HR professionals to adapt to this change. With the right approach, the gig economy can indeed be a win-win for both companies and gig workers.
Remember, the key is to balance the flexibility and cost-effectiveness of the gig economy with fairness and respect for gig workers. Treat gig workers as valuable contributors, not just as temporary solutions to short-term problems.
From India, Gurugram
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