Gig Economy the Big Picture, 2023 Outlook The fast-growing gig economy in India is set to help bridge the existing unemployment gap and enable India to reach its goal of becoming a $5 trillion economy by 2025
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Six years ago, there was no tangible concept of enterprise-focused gig work. There were a few consumer-driven tech platforms which were working with gig workers across low and mid skill segments, in sectors such as ride hailing, last-mile delivery and home services. Back then, there was no tested model or guaranteed outcome of leveraging a gig workforce to execute recurring business functions for enterprises. While we had over 60mn+ unemployed people in India, the human capital across skill levels was vastly untapped and underutilized. However, since then India has grown to become the fifth largest gig economy in the world with over 15 million people engaged in the economy in 2021.
The fast-growing gig economy in India is set to help bridge the existing unemployment gap and enable India to reach its goal of becoming a $5 trillion economy by 2025. Evolving from being a 'labour market', now the gig way of work is being regarded as an efficient and speedy go-to-market solution by enterprises. The gig economy has broadened from just consumer-centric utilization, to a well-rounded ecosystem which benefits enterprises, consumers and gig workers equally. This stems back to 2020 when we saw accelerated adoption of the gig economy, as the functional benefits of the gig model gained prominence during the time. Now at the end 2022, it has become the most-preferred way of working for enterprises across varied sectors and sizes. While the adoption of gig platforms in India was popular amongst the start-ups, today even large enterprises have realised the value of the gig model and joined this bandwagon. Moreover, the market has witnessed a considerable shift in the nature of business' requirements. Instead of roles, now processes and models are being giggified.
Not just enterprises, but gig workers have also understood the multi-faceted nature and benefits of the gig economy, along with the opportunities it presents. According to a report by the Boston Consulting Group, India since 2021 has had 15 million gig workers staffed in projects across IT, HR and designing sectors and this number is anticipated to rise by over 24 million in the near-medium term and to 90 million in the long term. This is not only limited to a delivery executive, an electrician or a cab driver. A 30-something mother sitting in Varanasi with a mobile phone and internet connection has the agency to utilize her time and gain financial independence working on digital gigs from her home. An unemployed person with a two-wheeler can engage in auditing or diligence gigs in their own city. A software developer has the option to shift from a 9-5 setup to a freelance career and enjoy the perks of flexibility, autonomy and work-life balance.
The gig economy has a massive role in shaping the future of work, like it already has - and will continue creating waves in how talent & employers choose to work. As we step into 2023, the gig economy is bound to grow further considering changing business needs & workforce behaviour, tech adoption & transformation, enterprise preference and benefits the gig economy offers at large. An ASSOCHAM report reveals that the gig sector has the potential to grow to US $455 billion at a Compound Annual Growth Rate (CAGR) of 17% by 2024.
Let's dive into how the gig ecosystem might expand in the next year:
● Management of hybrid workforce through SaaS-based tools
Now that enterprises understand the benefits of engaging with a gig workforce, whether working with contractual talent or working with on-demand work execution platforms, enterprises are stepping into the Future of Work with a hybrid workforce. In such a case, management of full-time employees, high-skill workers on-boarded on time-specific/milestone-based projects, along with fulfilment of recurring work through a distributed low and mid-skilled gig workforce will require a seamless platform to ensure smooth operations for the enterprises. Most enterprises do not have ready tools to manage both types of workforces together considering nuances of roles, work type, duration, compliance etc. This is here where a SaaS based workforce management tool which can be customized according to enterprise requirements. In the coming years, there will be a rise in SaaS-based hybrid workforce management systems that will strengthen expansion of the gig economy.
● Better pay and benefits for gig workers
With increasing enterprise preference to lean on the gig model amid changing business needs, there will be a surge in opportunities the gig economy presents for the gig partners. Such influx of opportunities creates an avenue for the gig workers to showcase their expertise, in turn helping them to navigate a better and higher pay for themselves. The rise in demand for work execution through a gig workforce also allows platforms to generate higher pays for gig partners.The rising numbers of gig talent across skill levels presents a white space for both enterprises and the Government to create a conducive ecosystem wherein both gig and traditional workers can access their highest potential. In the next year, there is an expected increase in the number of organizations creating solutions specifically to address the challenges faced by gig workers. The implementation of labour code will also give the gig workers access to health, accidental insurance and maternity benefits; old age protection which will provide a sense of security and work as an incentive for those considering to be a part of the gig economy.
● Going global
Today, India is one of the biggest markets for gig talent in the world considering the ever-evolving market and business needs along with the tech development and changing workforce dynamics. According to the India Staffing Report, India is the 5th largest in flexi staffing in the world. With tech fuelling digital infrastructure, gig talent has the opportunity and potential to offer their specialised skills to organisations across the globe.
● Increased adoption by high-skill gig talent
As the gig economy grows with enterprise adoption, companies are already shifting to explore high-skill gig talent to fulfil specialised project-based work to optimize their financials. This trend of working with contractual talent for niche roles is expected to only grow further from hereon.
● Bundling business functions
With exploration of the gig model, enterprises are now beginning to understand the full scope of giggification and the benefits it presents. They are now preferring to package multiple and connected core business functions and leveraging a gig platform for its fulfillment. For example, a financial services company could bundle telecalling, business development and due diligence, and let the gig platform manage their backend and frontend process.
With over 23.5 million people expected to join the gig workforce in the next seven years, the gig economy will continue to mature in India as enterprise preference, technological development and policy reforms strengthen the ecosystem. Overall, the gig ecosystem shows a lot of promise for all stakeholders involved, whether workers, platforms or government as the gig economy will only create a greater impact of employability, profitability, and economic growth in India.