Everyone’s talking about the “gig economy”—and a growing number of people work in it. The term might seem like something new, but it really isn’t. Before apps brought the idea of on-demand services and gig work to everybody’s phone, the gig economy was sometimes called the freelance economy, agile workforce, or even temporary work.
It may also seem like everyone has a side hustle these days. Or that people have quit their high-powered day jobs for gig economy jobs that pay just as well but with less stress. And, while some people have successfully transitioned from 9-to-5er to gigger, the truth is, the gig economy isn’t just on-demand work.
Instead of a traditional, in-office, full-time job with a single company, gig workers work as short-term, temporary, or independent contractors for one or a variety of employers (though they are not employers in the traditional sense).
India’s gig sector is expected to grow to $455 billion by 2024 at a compounded annual growth rate of 17 per cent—with potential to grow at least double the pre-estimates for the post-COVID-10 pandemic period.
With the long-held skepticism over the efficiency and dependability of a gig workforce wiped out by the pandemic-induced remote work regime, more and more corporates are comfortable hiring this new breed of talented people.
The pandemic has changed the way businesses are conducted, not only in India but all across the world. Due to the forced remote work culture, many companies are realizing its advantage on stressed cash flow, remodeling their operations as per business continuity plans, and opting to hire freelance talent under the given market scenario.
While the model has been slowly accepted by employers, employee and government, this sector observes a lot of skill gaps. Constant up-skilling and reskilling will be required for such talents to stay industry relevant and market ready.
Rapid digitization has led to the disruption in the labour market. Technology here plays a very important role in galvanizing the scope of independent work regardless of the geographical boundaries.
Independence of the project and flexibility of work hours has become the new work mantra which has redefined the meaning of labour.
In the present scenario, India stands to lose around 135 million jobs due to the pandemic. Many of them could be guided towards building skill sets to suit freelance work opportunities and be a part of this growing flex or gig economy.
PROS: A gig worker gets the freedom to work for several employers at the same time while retaining his freedom. It is a shift from a regular 9-5 job to an on-demand kind of work, where the worker also gets the freedom to choose his remuneration. It gives the workforce the freedom to accommodate both the work and family along with the preference to choose the projects that suit them best.
However, the gig economy is still at a very nascent stage in India and is marred by several challenges. Industry bodies has been conducting several studies on this parallel economy and just before the advent of the pandemic, the Associated Chambers of Commerce and Industry of India (ASSOCHAM) had predicted India’s gig economy would grow at a compounded annual growth rate of 17 per cent to touch a figure of $455 billion in the next three years.
CONS: There are some challenges in this sector that need to be addressed. This workforce has limited employment rights like minimum wages, health benefits, sick leaves or even retirement benefits to fall back on. Also, the payment is assured only on the completion of the project giving a sense of financial insecurity. The lack of any kind of protection was also deterring several talented workers from participating in the economy.
ESIC AND OTHER SOCIAL SECURITIES FOR GIG WORKERS
Union Finance Minister Nirmala Sitharaman announced that social security benefits will be extended to gig and platform workers during her Budget speech in the Parliament on February 1, 2021. The Finance Minister announced that the law on minimum wages would now apply to workers of all categories including those associated with platforms. She said that this will be ensured through new labour codes.
FM Sitharaman also assured that women will be allowed to work in all categories and also in night shifts with adequate protection. The compliance burden on employers will also be reduced with a single registration and licensing and online returns.
New Portal for Migrant Workers
- The Finance Minister in her budget speech also proposed to launch a portal for Migrant Workers.
- She stated that the portal would collect all relevant information on gig and construction workers, including those working in building and construction, among others.
- The portal will help provide benefits to such workers such as help form relevant health, housing, skill, insurance credit & food schemes for such workers.
ESIC safety net extended to gig economy workers
- The Union Budget 2021-22 has proposed to cover such workers under the Employees State Insurance Corporation (ESIC).
- The extension of the safety net of ESIC and other social security benefits to gig economy workers was proposed by the government as a part of the reforms to the three labour codes, which was passed by the Lok Sabha in September 2020.
- The safety net, however, had come with its own limitations as the same set of reforms to the labour codes allowed firms greater flexibility in hiring and firing workers without any permission from the government.