Embracing the Evolution of Employment: Exploring the Benefits and Hurdles of the Gig Economy

 

Jerry Simon

MBA- I Semester

Batch: 2023-25

jerry.simon2025@sibmnoida.siu.edu.in

The gig economy is a concept that has been increasingly discussed recently. It encompasses a wide range of occupations, from taxi drivers to food delivery drivers, consultants to bloggers, among others. In this article, we will attempt to gain an understanding of what the gig economy entails and the benefits and challenges associated with it.

According to a Boston Consulting Group (BCG) analysis, approximately 15 million gig workers in India are operating in software, shared services, and professional services.

The “gig economy” is a working environment consisting of flexible, short-term jobs that organizations offer to independent contractors and freelancers. Organizations benefit as they can save money on employee benefits, payroll costs, etc., in this situation, and gig workers have the flexibility to work from any location. They can earn from several streams of revenue from various gigs. It is also known as the " sharing economy," "agile workforce," "freelancer economy," or "independent workforce."

According to the Code on Social Security, 2020, “gig worker means a person who performs work or participates in a work arrangement and earns from such activities outside of a traditional employer-employee relationship”.

The rise of the gig economy in India can be attributed to several factors, including increased internet penetration, the growth of digital platforms, and a desire for greater work-life flexibility. This has led to the emergence of gig workers across various sectors, such as ride-hailing, food delivery, freelance writing, graphic design, and software development.

Some of the potential benefits associated with the gig economy are presented in points below:

1.      Flexibility: Gig work provides the flexibility to set one’s own schedule, which is especially beneficial for those who need to juggle work with other obligations such as family life, education, or other employment.

2.      Skill Development: Gig workers often work on various projects for various clients, which allows them to build their skills and experience and increase their flexibility and marketability in a constantly evolving job market.

3.      Remote Work: Gig jobs can be done remotely, eliminating the need for commutes and allowing employees to work from any location, potentially enhancing work-life balance.

4.      Cost Saving: For business owners, employing freelancers is more cost-effective than employing full-time employees because there is no obligation to provide employee benefits, office facilities, equipment, etc., to the gig workers.

5.      Global Talent Pool: Employers can take advantage of a global talent pool that provides access to specialized skills and knowledge regardless of location.

Certainly, while the gig economy offers various benefits, it also comes with disadvantages and challenges. Here are some of the drawbacks presented in the points below:

1.      Job Security: Gig workers need more job security and may be constantly looking for new opportunities, resulting in insecurity regarding their future employment. Since they are often classified as independent contractors, gig workers are not covered by the same legal protections as traditional employees, making them vulnerable to exploitation and unfair treatment.

2.      Lack of Benefits: Gig workers generally avoid the benefits typically associated with full-time employment, such as health insurance coverage, retirement benefits, paid leave, and workplace protection.

3.      Social Stigma: Gig work in India is still perceived by some as a short-term or low-paid occupation, which can lead to social stigma and a lack of recognition of the creation of gig workers.

4.      Payment Issues: Payment issues are a significant concern for gig workers, particularly when wages/ salaries are delayed or not paid at all. The government should create mechanisms to ensure that gig workers receive their wages/ salaries on time and have access to payment dispute resolution services.

5.      Quality Control: As a business, it can be difficult to maintain a consistent level of quality across projects when you’re working with various gig workers with different levels of experience.

The gig economy is undergoing rapid transformation, and policymakers, businesses and society need to strike a balance between its advantages and disadvantages. Legal frameworks must be adjusted to guarantee fair treatment of gig workers, access to essential benefits and protection from exploitation.

Recently, Rajasthan became the first State in India to enact a legal act regulating the employment of gig workers on July 24th, 2023. This Act, also known as the “Registration and Welfare” Act, provides social security benefits and other entitlements to platform-based gig workers.

Companies must also consider ethical practices that focus on the welfare of their gig workers. Furthermore, training and support initiatives can help to bridge skill shortages and improve career prospects. Ultimately, a comprehensive approach is necessary to unlock the potential and protect the rights and well-being of those involved in the gig economy. We can create a viable gig economy that benefits all parties by creating an environment that encourages flexibility, creativity and worker welfare.