In the consulting/knowledge working context, the gig economy is often referred to as the open talent economy, a term largely attributed to Deloitte Consulting. It’s a way to work or conduct business in a borderless and technology-enabled market where businesses and professionals seek each other out to collaborate on a particular project.
In a gig economy, the job market is characterized by the dominance of limited-period contracts rather than permanent jobs. So, instead of a regular wage, workers get paid for “gigs”. In Asia, the concept of the open-talent or gig economy is in its infancy, though it has definitely become part of a changing cultural and business environment. There is a distinct shift in tenor and tone, and we are seeing the emergence of a new segment which looks at people with high-end skills in marketing, human resources, finance, etc.
Owning its growth to a host of reasons, gig economy is slowly transforming the nature of work in urban spaces. A recent Indeed report on the job markets of India points to this shift. The report mentions how employees are increasingly willing to sacrifice the additional benefits that come with a permanent job, such as gratuity or health insurance, in exchange for a greater amount of flexibility that allows them a healthy work-life balance and the opportunity to simultaneously pursue multiple interests. Indeed data shows an increasing preference by the employers for flexible work arrangements, especially in larger cities, where daily transport might be difficult and cumbersome.
So who are the early adopters?
In India, while start-ups were the early adopters, multinational companies, consulting firms and large enterprises are embracing the concept. Flexing It’s research indicates that over a third of the 500-plus organizations surveyed expect to rely up to 50% on flexible talent in the next five years
While the Indian market has many freelancers/non-employees ready to engage in short-term projects—but these have been focused primarily on lower-value projects. High-end skilled freelance work is on the cusp of take-off. Freelancers and specialist boutique firms will need to network, integrate and organize themselves in order to fulfil complex client needs while guaranteeing the quality and security of client intellectual property and commercial information.
Organizations today have acknowledged this new trend and have realized the multiple benefits associated with flexi staffing & engaging with freelancers. Companies no longer need to worry about the compliance requirement, employee engagement, employee training and headcount liability as everything is managed by 3rd party or by consultants themselves. IT staffing industry is currently worth USD 3.04 billion and is expected to register 14-16% growth till 2021, e-commerce & start-up alone are expected to witness 17.3% growth in IT flexi staff.
Companies like Airbnb, UBER, Lyft, UrbanClap have all emerged as a result of gig economy, focusing on labor & capital intensive resources. Companies like Infosys, Wipro, Oracle & other major IT firms are benefiting largely through contract staffing, majority of the hiring for them is project driven & they are getting away with concept of having an active bench which leads to huge cost savings. IT services firms are going through huge transformation as most of the jobs are automated and clients are demanding new age technologies. Companies prefer contractual staff over core employees as there is a risk of skills becoming obsolete over a period of time.
What does the future hold?
The Indian staffing industry has already organized itself to ensure high compliance standards and has developed engines for a speedy delivery. IT systems have become more mature, and many leading staffing companies are leveraging the power of social media to reach out to associates. According to more industry insights, the temporary workforce in India is likely to make up 15% of India’s formal employment workforce in the next years. Currently, India has the third largest contract staffing workforce in the world, after China and the US. The Government of India continues to be the biggest employer of temporary workforce amounting to nearly 15 million. This is trailed by the IT and ITeS, and retail sector. The Indian staffing industry is expected to grow by at least 20% by 2020.
With several policy-related initiatives of the government including liberalization of certain archaic labor laws, the market share of temp workforce is expected to increase further. Given the current situation, it is believed that the current challenges facing the staffing industry are also somewhat limited and therefore, staffing companies like ours all putting all their might behind their might behind us.