The Growth Of Gig Economy: The Role Of HR In It

The ever-evolving job market sees the gig economy emerging as a powerful force. It has revolutionized the way people work and organizations operate. As it continues to expand at an unprecedented rate, it comes crucial for HRs to navigate this transformative landscape. 

This blog delves into the various aspects of the gig workforce and the strategies HR professionals are using to address the growth of this economy. Explore how HR is rethinking talent recruitment, redesigning performance evaluations, and utilizing innovative technologies.

What is the Gig Economy?

The gig economy is a free labor market where temporary positions are filled in by independent workers who deliver short-term commitments. The term ‘gig’ itself is a new-world slang that refers to a temporary job that lasts for a limited amount of time. In the past, it was mostly used by music artists to refer to performing at several venues as a temporary engagement 

If you look closely, you’ll notice that a lot of workers around you are indeed a part of the gig economy. The cab driver you came home with, the food delivery executive, or the part-time cake baker across the street, all build up the gig workforce. 

The rise of this gig is in regard to the rise of digital apps and technologies that form a bridge between consumers and part-time workers. The need for the ‘gig’ is mostly due to its convenience, flexibility, and absence of long-term commitment. 

The main factors that contribute to the growth of the gig economy in India:

• The workforce is becoming more and more mobile.
• Remote work became increasingly prevalent post-pandemic.
• Development of digital platforms: Digitization of India. 

Here are the thoughts from the Co-Founders of GigIndia and MyMobiForce about this rising trend:

Sahil Sharma, Co-Founder and CEO of GigIndia mentions in his interview with YourStory,

Gig economy thrives on the concept of work from home. We want to enable millions of Indians with employment opportunities.

–  Sahil Sharma

He further highlights that in the pre-pandemic era, there were more offline gigs but after the pandemic, the remote work model grew tremendously. “The real USP of GigIndia is to create a technology infrastructure which gives confidence to businesses to outsource work and also to remote workers for getting paid. Even if someone is not a full-time employee, they can still deliver an equivalent quality of work.”

In another interview with YourStory, Dheeraj Khatter, Co-Founder and Director of MyMobiForce says

India overall as a country is getting ready and mature with the gig concept. There have been signification changes in the mindsets in the corporate perspectives. The gig has become a mainstream concept entering every industry vertical.

–  Dheeraj Khatter

Examples of the Gig Economy

Freelancing is the most common example of this new-age economy. While it entails almost all kinds of job roles, the examples of the gig can be divided into some broad categories. 

Here are the categories and the online platforms associated with them.

Ride-sharing and taxi driving

Apps: Uber, Ola, Rapido, and Lyft.

These are some of the most popular ride-sharing and taxi-driving apps in India. These apps allow people to sign up as drivers and earn money by driving passengers around.

Food and grocery delivery

Apps: Swiggy, Zomato, Dunzo, Grofers, etc.   

These apps allow people to sign up as delivery drivers and earn money by delivering food and daily needs to customers.

E-commerce

Apps: Amazon, Flipkart, Snapdeal, etc. 

These platforms allow people to sign up as sellers or delivery partners to sell products to customers using the platform or deliver them. 

Freelance work

Apps: Upwork, Fiverr, and Freelancer.

These platforms allow people to sign up as freelancers and offer their services to businesses and individuals.

Education and teaching

Apps: Vedantu, Byju’s, and Unacademy 

These platforms allow people to sign up as teachers to take online classes for students across the country and earn money working from home.  

Who Works in the Gig Economy: ‘The Gig Workers’

Gig workers are independent contractors, freelancers, or self-employed individuals who offer their services to clients or companies on a temporary basis. Gig workers mostly use online platforms to connect with potential clients and secure gigs or short-term assignments.

The different kinds of gig workers include

• Freelancers: They are paid per task or assignment.
• Independent contractors: They perform work and receive payment on a contract-to-contract basis.
• Project-based workers: They are compensated based on the completion of specific projects.
• Temporary hires: They are employed for a fixed amount of time.
• Part-time workers: They work less than full-time hours.

Gig workers are more like the creative craftsmen of the modern era. They are flexible and independent workers. They adapt to different niches of work and have an entrepreneurial spirit. Gig workers can be seen as the vanguards of productivity in the 21st century who thrive in an ever-evolving professional landscape.

Rise of Gig Economy: Shaping the Future of Work in India

By the fiscal year 2029-30, the gig workforce is projected to witness a significant expansion, reaching an estimated 23.5 million workers or 2.35 crore. (NITI Aayog)

The rise of the gig economy in India highlights the increasing use of smartphones and the internet over the last decade. As the company became more digital in all aspects, individuals started working for short-committed and fast-paying jobs due to its easy access. 

Giant organizations like Amazon, Uber, and Unacademy have extensively made use of this trend by providing workers with platforms to connect with consumers. How have they affected gig workers?

• Acting as catalysts for employment across the country.
• Easing cash flow for workers through direct payment and private sector lending (loans and credit).
• Nurturing skill development and micro-entrepreneurship.
• Bringing about inclusivity and diversity
• Ensuring social security for medium and low-skilled workers.

The emergence and growth of this economy have led to a change in business models in India. Can it shape India’s future of work though? Let’s understand this from an economic perspective.

A country emerges as a developed nation when its economy flares up, in other words when its GDP rises. A higher GDP points toward more development. 

The gig economy in India has the capacity to generate employment opportunities in the non-farm sectors for up to 90 million individuals. More specifically, it can contribute to an estimated 1.25% increase in the GDP over the “long term”. 

India has an objective of becoming a USD 5 trillion economy by 2025. The new economy is expected to play a crucial role in achieving this objective by addressing income disparities and reducing unemployment.

The Role of HR in the Gig Economy

Gig workers are involved in all sectors of the economy. If you look closely at an organization, these workers can be hired for all the departments for various roles. A functional relationship exists between the workers and the management. However, who is responsible for overseeing these relationships and their functionality? The HR. 

As this new age economy grows, it is important to recognize the role of HR in it. Without an efficient human resources management system, there might arise various challenges. The workers might be underpaid/overpaid, they might not be adhering to legal compliances or maybe they’re overwhelming the current workforce in the company. Nevertheless, let us explore the role of HR in the gig economy in various aspects.

Talent acquisition and recruitment

In the gig economy, hiring gig workers should be fast, not slow. The process of finding, choosing, and welcoming them onboard should take weeks, not months. HR technology can help with this. Just like Uber has a rating system, you could use a special system for finding the right candidates or freelance workers.

Performance administration

It is the duty of HR to administer an employee’s performance and figure out ways to improve it. However, gig workers are not employees. Their performance evaluation has to be different. The team manager along with the HR need to work out a method that measures short-term objectives and outcomes.

Retention and engagement

When working with the gig workforce, as an HR, it is not your duty to reward or incentivize them to stay. Rather you can create a culture or an environment where they want to come back to work. You will need to set up systems to prioritize people who produce good work and build relationships over time. Managing these relationships can be a new responsibility for you as an HR professional.

What are the Issues and Benefits Associated with the Gig Economy in India?

The pros and cons of the gig workforce can be viewed from two points of view: the worker’s POV and the employer’s POV. 

Let’s imagine you’re an HR at a B2C company responsible for cutting company costs in the hiring and recruitment area while ensuring maximum efficiency. How can you benefit from the gig economy? And what are some issues you might face while engaging with it? 

5 issues associated with the gig economy for HRs

• Limited control over workers: Although being an HR is not much of a ‘control’ job as viewed. However, you must be able to enforce some kind of regulations upon your workers. In a gig economy, this is hardly plausible.
• Preserving team culture: In some cases, mostly unconsciously, managers tend to treat full-time workers and gig workers differently. Balancing a mixed workforce can sometimes pose a challenge for many companies. It can also lead to full-time employees feeling threatened, uncertain, and discouraged with a reduction in job satisfaction.
• Inconsistent quality and performance: The freelancer you hired 6 months ago for a specific job might not be available for another task now. This causes the risk of inconsistent performance. Ensuring a proper screening and hiring process can fix this problem. 
• Communication and coordination: Gig workers have their own schedules and method of working. They might not be available during your window of work schedule. Managing effective communication channels is crucial in a gig workforce.
• Legal compliance and misclassification: When integrating with gig workers, there is complexity in determining the proper classification of workers between employees and independent contractors. This misclassification can lead to several problems like a violation of overtime regulations, tax obligations, social security, absence of health insurance, and more. Curating proper policies centering around gig workers can help address these issues.  

Managing the above issues would require you as an HR to develop strategies to integrate gig workers into your company’s culture. Incorporating an efficient onboarding process to ensure adequate support and explaining communication measures would be a plus too. 

5 benefits of the gig economy from an HR perspective

• Easy Scalability: You can hire freelancers and contractual workers based on demand fluctuations and workload at the company. Hiring them will enable you to handle increased workloads while meeting business demands without the hassle of long-term commitments. 
• Cost-Effective: Hiring full-time employees can come with a lot of extra costs including salary, benefits, space, and operational expenses. In the case of a gig worker, you just pay them for specific projects and tasks.  
• Specialized Expertise: When hiring gig workers, you need not worry about training. They come with enough expertise and experience. They’re the most efficient option for high-quality deliverables and niche skill sets. 
• Reduced paperwork and administrative burden: Gig workers are responsible for their own taxes, benefits, and insurance. You have to go through minimal paperwork with them while engaging them with work. 
• Agile Workforce Management: As an HR, it is your duty to maintain an adaptable and agile workforce. The flexibility offered by the gig can efficiently respond to market demands and enable you to align resources accordingly.  

While a company incorporates the gig workforce, it is essential for the HR and the management to adapt to new changes and be more flexible towards the respected workers.

As Jeff Miller writes in a Forbes article “Many managers today are accustomed to setting annual goals, but in the gig economy, you’ll be responsible for establishing more specific, incremental goals to keep the projects within scope and on schedule.”

Adapting to the Gig: Changes in Strategies Adopted by HR 

Integrating gig workers effectively requires a shift in mindset and HR practices. As an HR professional adapting to the gig economy, there are several strategies you can implement to address this new workforce model. Here are 4 such strategies:

Establishing performance metrics

While delegating work, team managers should clearly communicate project objectives and timelines to ensure alignment and accountability. Additionally, defining measurable goals and key performance indicators (KPIs) to evaluate performance can help further.

Fostering inclusivity and equality

The current full-time employees at your company shouldn’t feel left out on projects and goals. To ensure fairness and equality between full-time employees and gig workers, it is important to implement practices that make everyone feel included. Transparent project assignments and collaborative team structure are two essential solutions to this. 

Managing an efficient talent pool

Continuously network and engage with a diverse pool of gig workers to have access to a reliable talent pool for future projects. You never know when there will be an urgent requirement. Furthermore, leveraging recruitment automation tools for a competent candidate screening process will save time and improve the quality of work. 

Developing gig-specific policies

As an HR professional, develop tailored policies and agreements that clearly define gig workers’ rights, responsibilities, pay, and benefits, while keeping up with labor laws. Stay updated on best practices and consult legal experts to ensure proper classification and compliance. This way, gig workers know what to expect, and your company stays legally protected.

A 3-Fold Impact of the Gig Economy 

As we have already observed, the gig and platform economy has been boosting the GDP of India. Mobile networks, smartphones, and the rise of the Digital India campaign are responsible for the same. As the perks of this economy become more widespread, more and more workers want to be a part of it. 

By 2029-30, it is estimated that gig workers will make up approximately 6.7% of India’s non-agricultural workforce and contribute to around 4.1% of the total livelihood in the country (Times of India). These numbers point to the fact that the impact of this economy will be experienced by everyone. Some aspects of it are mentioned below. 

A new state of work mentality

“It’s Gen Z’s world, we’re just living in it”

“Millennials account for 33% of all freelancers, fueling the expansion of independent work.”

To understand the impact of this gig, we first need to be aware of the modern workforce. The modern workforce of Gen Z and millennials has a free, versatile, and independent mindset. 

If you’re a millennial, you’re likely to prioritize personal fulfillment over a big job with a great salary. The new generation does not want to be tamed under the traditional work-life mechanisms. The absence of a fixed salary job is compensated by personal and professional well-being. 

Altering business models

“3 in 5 leaders increasingly prefer to “rent”, “borrow” or “share” talent with other companies, making their full-time staff smaller.” – Building the On-Demand Workforce, Harvard Business School. 

Imagine you’re running a business in a fast-paced world where adaptability is key. You’re constantly seeking innovative solutions to stay ahead of the game. With the gig workforce by your side, you can effortlessly scale your manpower base up or down as your objectives evolve. 

Picture this: you have a sudden surge in marketing needs, and time is of the essence. Instead of fretting about assembling a whole new team, the gig model comes to the rescue.

Embracing the gig economy as your secret weapon in this dynamic world empowers you to achieve greatness by swiftly adapting to change. It’s the ultimate tool for flexibility and efficiency, fueling constant growth and success on your business journey.

The technological impact: A win-win situation

The rapid advancements in technology, including machine learning, artificial intelligence, data analytics, and robotics, have revolutionized various aspects of our lives. The integration of smartphones and internet connectivity has become a powerful bridge between producers and consumers, offering unprecedented efficiency.

To illustrate the impact, let’s imagine you were a clothing producer 50 years ago. Selling your products meant physically being present in the market, and reaching out to potential customers face-to-face. However, fast forward to 2024, and you find yourself selling your products through an e-commerce website, all from the comfort of your own home.

This new era of a technology-driven economy has not only boosted business productivity but has also significantly improved the living standards of gig workers. It creates a win-win scenario for all parties involved. It fosters a mutually beneficial environment where innovation and productivity flourish, bringing us closer to a more connected and prosperous world.

Revolutionizing the Gig Economy: Unveiling a Visionary Roadmap for Progress 

The emergence of the gig workforce in India has brought about a revolutionary shift in the country’s traditional employment landscape. It has provided individuals with unprecedented opportunities to participate in the workforce, regardless of their educational background or formal employment experience. 

Furthermore, it has opened doors for millions of Indians to showcase their skills, talents, and expertise in various fields. The employment sector has widened ranging from technology and design to transportation and hospitality. This shift has not only empowered individuals to become self-employed and pursue their passions but has also generated new sources of income and promoted entrepreneurship.

Let us explore how this economy shapes a visionary roadmap for India. 

Embracing diversity and inclusion

GenZ makes up 32% of the worldwide population making it the biggest generation in the world right now. This populace is more conscious of racism, and diversity and does not hold the traditional views about gender identity and intersectionality. 

Since the bigger crowd of gig workers believes in an equitable and inclusive future, the coming decade will see a revolution in terms of diversity. The gigantic informal market in India is restructuring because of such a revolution. 

E-commerce and platform companies are striving for inclusivity by welcoming a diverse workforce and offering better opportunities to informal workers. Through technology, they aim to create a positive and inclusive work environment for all.

Gender sensitization: Women’s economic empowerment

Here are some suggestions by NITI Aayog on gender sensitization around the gig workforce that can be undertaken by platform businesses. 

• Collaboration with civil society organizations and NGOs to empower women, particularly those from marginalized backgrounds, in their pursuit of non-traditional livelihoods. This partnership enhances the promotion of legal, economic, and social rights, unlocking their full potential. 
• Prioritizing a greater representation of women in managerial and supervisory roles. They can also ensure that communication with workers avoids reinforcing gender stereotypes. Implementing 24/7 helplines and similar support systems contribute to an inclusive work environment.
• Extending FinTech services to unbanked and underbanked women ensures financial inclusion for all.

The gig trend ensures more and more initiatives to be taken to endorse women’s and other genders’ economic development in India. As this is done, greater gender data will be collected to address the challenges women-run platforms face in India. Bigger research would contribute to a bigger roadmap toward progress for gender equality.

Increasing social security: Upskilling and professional development

“Almost 15 million gig workers are employed in India.” This includes low and medium-skilled workers who initially did odd jobs and were paid much less. Becoming a part of the gig workforce assures skill development, ultimately developing an individual professionally.

In 2020, the government recognized gig workers for the first time in paperwork. The proposed Code on Social Security aims to offer comprehensive protection for gig workers. It includes provisions for life and disability coverage, accident insurance, health and maternity benefits, old age protection, and the establishment of Social Security Funds funded by contributions from specific aggregators. 

This revolution challenges the notion that traditional, full-time employment is the sole means of societal sustenance. In India, the gig economy provides opportunities to sustain outside the boundaries of traditional employment, paving the way for a more inclusive and flexible workforce landscape.

Moving Ahead

In conclusion, the gig economy has transformed the way companies approach employment and productivity. It offers flexibility, convenience, and new opportunities for workers, while also presenting benefits and challenges for HR professionals. The gig economy is projected to continue growing and can contribute to the economic development of India by addressing income disparities and reducing unemployment.

HR professionals play a vital role in adapting to this new paradigm. They can effectively manage gig workers, embracing scalability, leveraging specialized expertise, and fostering an agile workforce. They also need to foster an agile workforce while addressing challenges like limited control and preserving team culture. 

By embracing the gig economy and harnessing its potential, HR can contribute to the growth and success of organizations while promoting inclusivity, diversity, and professional development in the workforce.

Frequently Asked Questions (FAQs)

How has the gig economy been growing recently? 

The gig economy has witnessed significant growth in recent years. According to various reports, the global gig economy was valued at over $4.5 trillion in 2020 and is projected to continue expanding in the coming years.

What factors contribute to the growth of the gig economy? 

Several factors contribute to the growth of the gig economy. 

• Increasing demand for flexible work arrangements 
• Greater autonomy, work-life balance, and multiple income streams 
• Easy scalability for employers 
• Technological advancements: digital platforms and remote communication tools

Is freelancing a part of the gig economy? 

Yes, freelancing is often considered a part of the gig economy. Freelancers are independent workers who offer their services on a project or contract basis, which aligns with the gig economy’s flexible and temporary nature.