The year 2019 started on a good note for the economy. Businesses announcing good numbers, hiring in full force, foreign indirect investments (FIIs) circling around Indian economy and the economy looked well on its way to reach the $5 Tn mark by 2025 as announced by the Finance Minister. But in the second half of the year, all of us sensed a shift. It started with job losses in the automobile sector and spreading to other sectors. Amid this gloom, one vertical displayed growth at around 30%. This is one sector where hiring hasn’t stopped and as it turns out, more people are inclined towards finding a job in this segment - meet your new friend - Gig Economy.
Over the last 3 - 5 years, there have been ongoing conversations about the emergence of gig economy and whether it can become a job generation hub. As we get ready for 2020, numbers say yes we can! Our jobs report, released earlier this year, projected 21 lakh jobs in the blue collar segment, of which 14 lakhs were in the gig economy.
With the emergence of companies like, Ola, Uber, Zomato, Swiggy, Dunzo, owing to their ongoing aggressive expansion plans, job generation now appears evenly spread. Bangalore, NCR and Mumbai continue to lead as hubs for migrant population moving to big cities in search of blue collar jobs but as these companies enter tier 2 and 3 cities, more on demand workers will be needed there in order to service these markets which are large in size as well.
Impact of an open approach to gig economy
Movement of workforce to the top 5 cities for jobs was never a healthy scenario. This triggers high attrition and forces companies to remain in perennial hiring cycles. Currently, attrition in on-demand blue collar segment is as high as 300%, as people who come to cities for work often go back to their villages during harvesting or festival time for long durations.
We believe taking jobs to candidates will address the issue of attrition. Companies are now looking at gig workers in a far more serious way. Our research showed the triggers for people switching jobs at frequent intervals ranges from higher wages to delay in salaries, financial stability, among others.
Many companies are now investing in the well-being of the gig workforce, similar to blue collar and white collar workers, with better jobs and good working conditions. It started from a basic service - digitizing attendance. As compared to the earlier system of maintaining physical registers, we brought in biometric and geo fencing enabled attendance system which took care of delay in paying wages. This alone has helped gig workers in taking short term loans to meet their immediate demands. Now, employers are working towards giving a credible rating to gig workers depending on their stint so that they can also take loans from NBFCs like fintech companies and can come under formal credit access system.
This kind of commitment translating into financial investments by the companies coupled with frequent training and upskilling is demonstrating that gig economy is accelerating itself to emerge as a jobs generating sustainable machine for job seekers.
We now see this trend spreading fast into the white collar space also. As more young people enter the workforce, the notion of finding a good job and sticking to it for even 3 years is being constantly shattered. Led by startups, now even corporates are hiring people on a short term basis.
According to a recent report by Flexing It, 72% of all gig projects were in large corporates in 2018 - 19 as compared to 52% 2 years back. These include expert roles like strategy, new business pilot launch and transformation initiatives.
What excites employers and employees about gig economy
From a job seeker’s perspective, the world is changing, aspirations are growing and the desire to do what one loves is taking dominance. This drives people to do what they like to do, when they like to do and at the speed that excites them. They can do multiple things at the same time, they can drive their earnings and in the process, build an independent world of their own. From an employer's perspective, managing costs and efficiency during peak demands is the most vital situation.
Gig economy is now becoming an acceptable trend even in traditional sectors like facility management, retail, manufacturing, education etc. Currently, traditional sectors’ composition of gig workforce is 1%, but its growing steadily. Employers like Swiggy and Ola continue to lead on bulk hiring for the gig workforce.
According to our data, there are roughly 15 - 17 crore people in the blue collar (semi) organised economy. The overall hiring is growing at 5 - 8%, while gig economy hiring is at 30%.
For gig economy to become the new normal, both for blue and white collar job seekers, factors like employee benefits would play an important role in shaping up its future and making it a sustainable job generation segment.
Illustration by Yin Weihung