Opinion

How the pandemic is powering gig economy

Sahil Sharma | Updated on October 05, 2020 Published on October 05, 2020

The freelance ecosystem has immensely benefitted from the disruptions brought in by the Covid-19 pandemic

Globally, fears of the coronavirus pandemic have triggered a dramatic shift towards gig workers, remote working and the work-from-home regime. As the saying goes, necessity is the mother of invention. The adage has been ringing true during the past decade or more as tech innovations keep disrupting diverse verticals across the globe. With full-time jobs lost in myriad domains, jobless workers have taken to offering their services on a freelance, flexible or part-time basis. Now, the ongoing coronavirus pandemic has lent greater momentum to the gig economy — the term used to describe the freelancers’ ecosystem.

On the other side, companies hard-pressed to continue business operations are also receptive to the idea of hiring gig workers. There are multiple reasons for their predilection. Besides being more cost-effective, gig workers can help scale up operations exponentially and much faster while optimising operational costs. All these advantages can help safeguard company margins that were already under pressure due to the pre-pandemic economic slowdown, which was subsequently exacerbated by the coronavirus-related lockdowns and restrictions.

Manifold advantages

Without a doubt, the gig economy is turning out to be a big blessing for both out-of-work persons and companies struggling to keep operations going. The latter include small and big enterprises, start-ups, MSMEs and other entities. In the case of employers, gig workers offer the benefit of quick hires on short-term contracts or predetermined project work. As the rigmarole of talent hunting, hiring and on-boarding are no longer required, there are tremendous savings in time, energy and resources.

According to the 2019 World Development Report, some of the drivers for the transition towards the gig economy include the widespread disruptions in production processes and the swift ascent of digital technology. As the traditional system of operations was disrupted by technology-driven challenges and new-age competitors, companies were left with only two options — adapt and co-opt the new digital system or sink without a trace into oblivion.

Therefore, despite upfront one-time investments in deploying digital technologies, companies have preferred to embrace digital to keep operations running. The best examples of this — remote working and the work-from-home regime that has been popularised overnight across the globe.

In India, the steady jump in Internet penetration, particularly in tier 2, tier 3 and tier 4 cities, has been instrumental in opening up greater gig options, both for individuals as well as enterprises. Going by a report from consulting firm Kantar, India’s monthly active Internet users are expected to touch 639 million by the end of December 2020 from the present figure of 574 million. As per the report, the nation’s rural areas have been driving the digital shift.

In 2019, rural India had an Internet penetration growth of 45 per cent while the urban region registered only 11 per cent. Thanks to this momentum, rural Internet users are expected to reach 304 million by end-2020, soaring from 264 million users.

Performance plus permanence

All these factors as well as the pandemic are boosting the velocity of the gig economy’s expansion. As their BCPs (business continuity plans) become the need of the hour for companies, sustaining business operations more cost-effectively through the gig economy makes these enterprises more viable.

In retaining their competitiveness, some companies are deploying a hybrid working model by using a mix of in-house employees and gig or remote workers. Increasingly, however, it is becoming clear to entrepreneurs that gig workers have greater advantages during the present pandemic.

Apart from saving on the overt and covert expenses of full-time employees, gig and remote workers are proving to be more productive, efficient and deadline-oriented. Be they big or small, these elements offer companies a better competitive edge.

In the case of individuals, the focus is on developing future-ready skills, which include soft skills. As their present skill-sets are subpar or inadequate in meeting changing needs in the new normal, people are using virtual learning platforms in upgrading skills from the safe confines of their homes or offices. It is now accepted that in the digital era, learning is a lifelong, never-ending process for people seeking to retain relevance in the employment landscape — for now, and the future.

Meanwhile, gig workers benefit from the freedom of choosing the type of work they wish to accept and their working hours. Traditionally, freelancers have found ample work in creative verticals such as the media, advertising and communications. Gig assignments are also available in arts, design and recreation, entertainment, computer and IT, construction, transportation, logistics and warehousing, among others.

In the ultimate analysis, the threat of the Covid-19 pandemic will remain most virulent for a couple of years or so. But the paradigm shift it has triggered in business operations and the work economy worldwide is slated to remain permanently. For individuals and institutions benefiting from the gig economy, remote working and the WFH regime, there couldn’t be better news.

The writer is Co-Founder & CEO, GigIndia

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Published on October 05, 2020
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