COVID fuels gig economy

The COVID-19-induced lockdown has put millions out of job without discriminating the status of workers, be it in white collar or blue collar job segment. It has exposed the brittle relationship of employee-employer in firms and companies, small or big, with terms and conditions governing their bond far from transparent. At the same time, the pandemic also took the lid away from the plight of workers especially in unorganized sectors, who were among the hardest hit as they overnight lost all income stream, having no social security whatsoever.

Even as the country was already loaded with huge burden of unemployment in pre-COVID crisis, the crowd of workers forced out of job during the ongoing COVID times further complicated the joblessness scenario. However, the crisis triggered a change in the employment scenario, where people on a mass scale have started crossing from one sector to another sector for ensuring continuous working days to keep themselves afloat in a depressed economic scenario.

In other words, we see a continuing and substantial shift in the job market to a contract-based system, indicating an unprecedented boost to the gig economy. Even companies, big or small, have started realigning their systems to prefer to employ more workers on contract basis instead of going all out for permanent absorption of workers in their firms. As the trend is catching up fast, we are all set to witness a hire and fire economy catching up fast in post COVID crisis.

Let’s first understand a gig economy. Internet is hugely loaded with content explaining a gig economy. In succinct, gig economy as explained by experts is a free market system in which temporary positions are common and organizations hire independent workers for short-term commitments. The term “gig” is a slang word for a job that lasts a specified period of time. Examples of gig employees in the workforce could include freelancers, independent contractors, project-based workers and temporary or part-time hires.

Precisely, it is a work engagement for a specific job and is paid on assignment basis rather than a fixed salary, which is a shift from the conventional 9-to-5 job to a freelance, task-based work.

Remarkably, just a few days back, some media reports picked opportunity in gig economy amid COVID-19 crisis. Quoting experts, the report says that gig economy provides a win-win situation for both parties and its reach is slowly expanding from less-skilled services to high-skilled jobs. Actually, ‘gig economy has been there for a long time. It’s being embraced like never before, that too in India, due to both economic conditions and COVID-19 situation’.

The demand for gig workers is reported to be higher this year than last year. Corporate workforce is making space to accommodate gig workers. A report reveals 12 per cent rise in demand for gig workers from pre-COVID times. While delivery agents command the biggest slice of the pie, the other profiles which are in demand include warehouse helpers and assembly line operators. In white-collar gigs, designers, content writers and digital marketers are in demand as e-commerce sites require increased activity.

In the above given scenario, potential of gig economy seems enormous and the gig workers, be they white collar or blue collar workers, are going to be a crucial support in beating the slowdown in economy over a period of time. In fact, gig economy cannot be ignored in future times as this will constitute one of the vital drivers of the economic wheel  as the number of gig workers is extremely going to multiply.

In view of the growing economic potential of the gig economy and the welfare of men associated with it, the policy makers have to spend extra time to tailor a robust plan to capitalize on the strengths of this sector. The economic opportunity thrown by the gig economic sector recently attracted experts to deliberate on it and held a webinar entitled ‘Formalising the Gig Economy’. The experts acknowledged it as a segment that is only a few years old in India but is growing bigger by the day, as more and more services move to a platform-based model, and more and more workers sign up to them to gain market access and customers.

So the scenario reveals that the gig economy may be nascent in India, but it’s growing at a steady pace. It’s the right time for professionals to prepare themselves for exploring it all to the benefit of reviving the economic growth at least to the decent levels. Here, one of the main things is formalization of this segment. So far, in the segment of economy, which is mostly clubbed in unorganized sector, there have been no fair and transparent terms of job contract. The employer enjoys sweet will to fire workers out of job in a jiffy. To protect the gig workers against this harsh approach of employers, the government has to work out a policy where, in the first instance, the segment is brought under the ambit of formal sector. For this, gig workers should be insulated against any harsh ‘hire and fire’ policy through certain regulations, which will at the same time infuse a sense of responsible corporate citizen among companies or platforms.

Notably, an expert while deliberating upon the formalization of gig economy pointed out, “But before we go into social security, the fundamental question in formality is to know who the worker is. To create such a database is the first step to formalising. And it is easy to do since many of these workers are platform-based. The State should organise this.”

Gig workers have already been there. Now a substantial number of workers in other sectors of economy rendered jobless due to COVID-induced pandemic may find it hard to get back their jobs. This paves strong chances for them to join the gig workforce. As the landscape of gig economy is all set to expand in post COVID era, the social security issues and ensuring fair and transparent contracts for them assume greater significance and it’s here the government has to lend its support to keep the gig economy vibrant. The government has to ensure that the work contracts do not violate their basic rights and help them to get some protection against any unilateral change in working conditions and wages.

It would not be out of place to mention that advanced technology driving the digital age has been contributing to the rise of the gig workforce globally as it has made them capable of executing work while on the move and from anywhere. Here freelancers capitalize on the power of technology and take jobs and projects at any place around the globe. From the perspective of the freelancer, a gig economy can improve work-life balance. Ideally, the model is powered by independent workers selecting jobs that they’re interested in, rather than one in which people are forced into a position where they pick up whatever temporary engagements they can land after being unable to get a job.

While as firms and platforms too leverage technology to select the best individuals for specific projects from a larger pool than what’s available in any given area. Besides, they have a series of advantages in gig economy. They (businesses) can save resources in terms of benefits, office space and training. They too have to understand that a flexible workforce will help their organizations to manage costs well with the peaks and troughs of demand. It will also enable their rapid scale up when exponential growth happens and helps provide specialist skills for one time/occasional use.

Remarkably, industry body Assocham in January this year pegged India’s gig economy to grow at a compound annual growth rate (CAGR) of 17 per cent to $455 billion by 2023. In succinct, outbreak of coronavirus has thrown opportunity for government to regulate gig economy, protect the rights of gig workers and use the potential of these Nano workers to refuel the economy with demand and supply.

(The views are of the author & not the institution he works for)