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.
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