Covid-19 has permanently changed the way we think about businesses and the workplace. As the barrier between the office and home was removed, businesses faced a significant decrease in their revenue, and the traditional explanation of a ‘job’ was changed.
It is estimated that over 10 million Indians lost their job during the second wave of the coronavirus due to their firms being unable to generate revenue to keep paying the salaries but at the same time it did open a few new possibilities.
While restrictions have been lowered, most businesses have found a solution amid the second wave that seems to be working: the gig economy. The gig economy isn’t based on the traditional work model of 9-to-5 jobs and is not just limited to driving or delivery jobs. Instead, individuals can now work flexible hours and days of the week to generate income based entirely on their skills. One can partner with multiple firms or small businesses to generate revenue, acting as small independent business owners or often known as freelancers.
The gig economy in India is currently a pool of over 15 million freelancers in various fields, from IT and content generation to app-based jobs and social media marketing. India’s workforce is growing by approximately 4 million people per year and more and more workers are getting drawn to such jobs.
Over the past year, as people realize the need for flexibility and multiple sources of income, a significant number of people turn to side gigs or part-time jobs along with (or instead of) a full-time career.
This significant increase means the Indian gig economy is expected to increase to USD 445 billion by 2024.
However, freelancing or running a ‘gig’ is often not considered a full-time career despite this high number. Instead, this is considered a part-time professional or ‘side business’ and does come with its own limitations because gig-workers are not the same as salaried workers.
The primary problem in the gig economy is the irregular earning patterns. In the traditional workforce, each employee is paid a fixed salary every month. This payment system is often automated and ensures managers don’t spend extra time doing calculations or rechecking accounts. In the gig-based workforce, this isn’t always the case but thanks to the new age app-based businesses are standardizing the same.
Most workers in the gig economy earn money based on their deliverables, which may vary depending on their work. For a freelance content writer who earns money per article, the amount may vary significantly if they write a few or more articles in the month, and similarly for a delivery partner, they can earn more based on the number of deliveries they do in a day. This means that the work has to be tracked to the granular level to avoid miscalculations. Yet, gig-workers don’t always receive a pay slip or a statement of the amount they have earned at the end of the month.
The secondary problem for workers in the gig economy is the lack of income and employment legitimacy. In a normal scenario, verification of employment history, experience, and other credentials is often done before hiring. The verification for a traditional employee may be as simple as calling up the employee’s previous boss or manager and asking for information. But for freelancers with several employers or client partners and consultant status, it becomes difficult to establish a source for job history.
This also poses an additional problem: freelancers and gig-workers often apply for job positions or for loans, credit cards, etc, employers and banking officials often conduct in-depth background or income checks on employees before hiring or approving a loan. However, for freelancers, this can become redundant. Employers and other institutions usually have to go out of the way and ask for various documents just to understand these workers’ earnings and work history patterns.
It is clear in this post-pandemic world that many people will shift from traditional jobs to the gig economy. This change provides the employee’s flexibility and control over their income and talent. However, it is often seen as a disadvantage for businesses. This shift doesn’t necessarily have to be a disadvantage or difficult one. Since this is the future more products and services need to be built in such a way that gig-economy workers are actually legitimized.
Change in the economy is constant and businesses need to adapt to this new economy and continue increasing their revenue by offering the right customer experience and product.
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