There might come a time when most white collared work goes the gig way. Is that good news? Reports suggest that the gig economy is growing faster in emerging economies. A recent Teamlease report estimated that 56 percent of new employment in India is being generated by gig economy companies across both blue and white-collar workforce. How ready is India to ride the gig wave?
A recent report card 2018-19 on the professional gig economy by Flexing It, a curated on-demand business consultant platform, has some heartening trends to highlight.
Some of them include:
Large corporates are leveraging external talent to drive strategic priorities and transformation initiatives -- most of these assignments are longer in nature (85 percent are > 3 months).
Over 2/3rds of the projects were less than 6 months in duration, signalling that companies are onboarding consultants for short bursts to drive key initiatives.
Strategy is the #1 skill in demand, followed by technology and marketing. These 3 functional areas accounted for half the projects in ’18-19.
I spoke to Chandrika Pasricha, Founder and CEO at Flexing It, to decipher what makes India a hotbed for the gig economy and some of its on-ground challenges. She has some very interesting insights to share. For more, you can access the report card on the professional gig economy by Flexing It here.
What do you think is the future of work for the gig economy in India (compared to more mature markets like the US)?
India has a predominantly self-employed ecosystem with an estimated 70-75 million formal sector jobs. Consequently, the domestic workforce is attuned to gig work and it is estimated we have 15 million freelancers in India which is second only to the US. Mature markets such as the US have seen rapid adoption of independent and gig work with 34 percent of workforce in 2015 freelancing, and this is expected to reach 50 percent by 2027. We find similar patterns in Europe and Australia as well. The fast-paced growth in the gig economy in more mature markets can be attributed to higher social acceptability, greater organisation through platforms and also the beginning of regulatory mechanisms supporting the ecosystem.
We expect the professional gig economy to grow rapidly in India given the demand across all major client segments including start-ups, large corporations, professional services firms as well as the development sector. Further, international demand for high quality Indian talent continues to rise. We also believe freelancing and flexible work will be critical channel we as an economy need to support to create jobs for our growing young workforce.
What is actually changing on the ground?We see several distinct changes:
- Start-ups were early adopters of flexible talent; we now find large corporates and professional services driving demand, accounting for about 72 percent of overall assignments.
- There is also much stronger client integration for freelancers. Almost 90 percent of projects have an onsite requirement.
- Further, there has been a marked shift from lower value gigs and gigs for creatives or tech professionals, to more mainstream business functions. Strategy, such as marketing, HR, as well as to higher value project. Freelancing is getting widely accepted as a career choice with purpose and flexibility as key drivers.
- We also see clients start to think about integrating freelancers as part of a core strategy to access skills and create processes for easy on-boarding and payment (vs. treating consultants as vendors).
What surprises you the most and why?
The advent of flash teams has been a key trend. Organisations are pulling together teams of independent consultants with complementary skill sets to drive larger strategic initiatives; this indicates greater comfort with flexible talent plus trust in partners to put the teams together.
An area of surprise is the lower-than-expected women participation in the gig economy in India. Globally, 60 percent of freelance community comprises women while in India the proportion of women in the flexible/contingent workforce is 20 percent (PayPal estimates) to 32-33 percent (FlexingIt data). This falls steeply at higher levels of experience. We believe there is a great opportunity for women professionals to leverage freelancing as a way to stay engaged while retaining flexibility -- this could be one of the strategies to stem the falling labour force participation of women as well.
Which areas do you think will go gig over the next five years?
The traditional gig strong holds such as technology and creative/design services will continue to grow well. Further, core business functions such as HR, supply chain, strategy, marketing and finance are seeing robust growth and this will continue to grow as companies look at freelancers as a core part of the business strategy.
We also see new age skills such as data science, digital, analytics, etc. as being sources of great demand for freelancers.
Talk about labour laws for gig workers – what should they be like? How should they become more mainstream? What does your experience show?
There is a supporting ecosystem that is emerging for freelancers. There has been tremendous growth in co-working spaces with 40 percent y-o-y growth expected. Further business models aimed at freelancers to ensure credit facilities, insurance, etc. are on the rise globally and we hope to see them soon in India too.
However, there is still work to be done to bring freelancers into the mainstream with access to benefits, ensuring timely payments and easier access to loans, insurance, etc. Recently, a ground-breaking law was passed by New York city which deems the payment terms to be 30 days after work completion unless otherwise specified in the contract, puts the onus of contracting on clients when hiring a freelancer for project values of > $800 and legal assistance would be provided by the state to investigate and to collect on the freelancer’s behalf. There is a need for contractual protection along similar lines in India as well as recognition of freelancers as a distinct segment of professionals.
What are the actual challenges gig workers are facing in India currently (also can you tell us this from a global perspective as well)? How should these challenges be fixed?
I would divide them into the following: Access, timeliness and standardisation of payments and skilling.
Structured access to quality work is a challenge but the advent of gig platforms is beginning to solve for this. In a 2018 survey of 6,500 executives worldwide, conducted by BCG and HBS, roughly 50 percent respondents agreed that corporate adoption of gig platforms would be a significant or highly significant trend.
Freelancers face a challenge in quoting a fair fee for projects and this is even more applicable for women freelancers who typically underbid their male counterparts by 40-50 percent! An indicative benchmark would go a long way and help consultants get paid fairly for their level of skill and expertise. Flexin It has a benchmarking tool, FeeBee, that aims to provide this transparency on fee levels by skill and experience so consultants have a guide when they think about fee proposals.
Timely payments from clients is also a pain point faced by freelancers. This is another area where managed platforms can play a critical role by following up with clients and providing payment certainty.
Further, freelancers also need to invest in skilling to ensure the work experience is relevant at their own cost.
Nisha Ramchandani is the principal author of 'The Future of Work' series.
Published Date: Sep 06, 2019 06:09 AM | Updated Date: Sep 06, 2019 11:09 AM IST