GIG ECONOMY: DEFINED

The gig economy isn’t as confusing as it may seem.

The gig economy is all about the growing number of people going their own way through freelance and contract work – any situation where the individual is paid per job, or ‘gig’, as opposed to receiving a regular salary or wage from an employer.

While the term ‘gig economy’ is fairly new, there has always been a market for freelance, pay-per-job work.

In fact, prior to the industrial revolution and the rise of the employee-employer contract, this type of work was the norm. Since then, the security of a steady job and salary has made full-time employment the preferred approach.

Another way to put, it is freelance or contract work. Workers in the gig economy make money by matching with individual clients and completing their work, or “gigs” for those clients to earn their money.

Unlike in traditional Job, freelancers do not get any benefits such as healthcare, social security, leave allowances etc.

There is no duration associated with any gigs… Some gigs are as short as a five-minute survey, others are month or year-long projects.

Regardless of how long the gig is, workers who earn their income through the gig economy must have a next project once their current one is done in order to have a continuous flow of income.

Under the gig economy, individuals offer their services on a part-time basis to professionals or companies both small and large scales.

The Gig word has probably been derived from the Music Field, when we say he (musician) is doing some gig or any performer presenting a nice performance we say ‘Gig was well performed’. Gig is a slang word.

Why we say so because they are expertise in their field and show their talent as gig…. Similarly, any professional freelancing and giving his / her expertise is also doing some gig related to their field.

The evolution of labour market is not a very old phenomenon. The emergence of new technologies has always made the market for labour a dynamic one.

The Industrial revolution over the time has created a structural change as to how labour functioned. But the pace of rapid changes in technology, has resulted in new forms of employment.

These days, due to the ever-changing nature of work, there is no such thing as a ‘job for life’. Things are in a constant state of change – whole industries have been created in the last few decades alone, with many set to disappear in the coming years. At the same time, attitudes to work are changing, with younger generations increasingly rejecting the predictability and stability of the traditional career path in search of a more varied, interesting and flexible one.

Companies are attracting towards Gig Economy at a rapid pace, purely as it has come as a great cost saving for them… For a company to employ in house IT deigner will involve monthly salary and other overheads whereas the Website work can easily be outsourced to an website developer at much cheaper price… Similarly if one has to employee an in house Content writer again besides salary other overheads to be incurred but with outsourcing to a freelancer, one can bargain to very low rates.

And it’s not just the client who is benefitting, even the freelancer having the opportunity to associate with various types of people and can earn according to his / her willingness to work and perform, whereas such freedom is not available with a traditional job.

The term gig economy refers to an increasing number of people who are working for themselves as freelancers for a range of different clients, rather than working in traditional nine to five employment. Advances in technology have given people the opportunity to choose their work location and hours, providing unprecedented flexibility, often without the need to compromise on financial security.

One of the triggers for the rise of the gig economy can be attributed to the 2008 global financial crisis. People were rendered jobless due to the meltdown and it made people resort to short term modes of employment for making ends meet.

Further, as it brings significant savings to businesses, in terms of time and money.

There is no need to pay the often significant costs of recruitment, or conduct in-person interviews, when hiring within the gig economy.

The Gig Economy has its pros and cons as enumerated below:-

Full-time employment isn’t for everyone – the lack of freedom, flexibility and ownership can lead to some feeling disengaged from their work.

The rise of the gig economy has made it easier for people to take their work lives into their own hands, giving them the freedom to work when and where they want. This can be particularly attractive and lucrative for skilled professionals such as web developers, who can leverage their skills for maximum advantage.

In full-time employment, the employer essentially owns your skills; they have the right to use them as they see fit, in line with your employment agreement and job title.

This way, the employer buys the rights to your skills for a monthly fee – your salary.

In the gig economy, the individual has full control of how they use their skills and knowledge. In many cases, this allows skilled professionals to increase their income, as their earning potential is unlimited.

It gives them freedom to work at their own pace and terms.

And unlike traditional employment, gig work focus on results rather than processes.

Gig workers are judged and paid based on their ability to deliver outcomes, but how they get there is completely up to them. This allows gig workers to tap into their natural reserves of intuition, creative thinking and self-reliance.

Gig work also has the potential to be more meaningful. When you decide to cut loose from an employer and go your own way, your work becomes more personal.

There is less separation between what you do for a living and who you are. And the simple fact that you are building your own brand rather than someone else’s makes this type of work by nature is highly motivating.

Let me also enumerate the cons that are associated with Gig Economy

There is a darker side to the gig economy. In the absence of a steady salary, paid sick leave and other benefits, the chances of financial insecurity are much higher.

App-driven platforms such as Uber and Swiggy have completely disrupted the market, opening up the gig economy to pretty much anyone, regardless of skills or experience.

But these companies are rarely out of the news, due to their perceived exploitation of workers – or ‘independent contractors’, as they are officially known. Let us understand:-

You see, Swiggy riders are currently paid per delivery, not per hour. So if they manage three drops in an hour, they make well over minimum wage.

But the on-demand nature of this job means that riders can spend up to an hour waiting to be assigned a delivery – without getting paid.

Over the course of a shift, they can end up make less than the minimum wage. And with no sick pay, what happens if they fall off their bike and break a leg?

This puts such workers in a precarious position.

You see the Government has officially designated some amount as the baseline for self-sufficiency and that amount is known as Minimum Wages… and what will happen if one can’t be given guarantee to make minimum wages ---

In that case, it could be a great challenge to make both ends meet on a day-to-day basis and also the long-term propositions are grim.

Earning irregular amounts can make it very difficult to rent a property, secure a loan or get a mortgage, let alone saving for retirement.

Depending on who you are listening to, the gig economy is either the best or the worst thing to happen to the world of work.

Some see it as a much-needed antidote to a boring nine-to-five existence, empowering them to work with freedom and flexibility.

Others focus on the precarious nature of gig work and its potential for exploitation.

How much a gig worker makes totally depends on the skills they have and the value that they bring.

This is similar to full-time work, but much more direct, and without the safety net of basic employee rights – there is no minimum wage, just the value of the gig.

And this is the problem with working as a delivery driver or rider – it is unskilled.

Anyone with a driving license or bike can do it, meaning those that do have very little bargaining power.

The gig economy can be a world of opportunity or a world of potential hardship – it all boils down to what skills you bring to the table. Those that thrive have something that people need but that not many people can offer.

Hence, the way we work is changing.

Younger generations no longer want to be tethered to a desk all day, working for the same company for years.

21st Century youth have grown up in a world shaped by the internet and mobile technology, with no connection to a time before it. The chances of this generation embracing a way of working rooted in the twentieth century are almost nil.

Organisations will have to adapt, too. In the light of constant change, they will be forced to become more flexible, agile and streamlined. Having a large workforce of permanent, full-time employees will make this increasingly difficult.

When you bring all of this together, it’s clear that the gig economy will continue to grow.

The next decades could even see the end of the full-time position as the prevalent mode of employment.

Instead, organisations may function on a skeleton staff of decision makers and leaders, dipping in to the global talent pool of gig workers to fill in the gaps.

These workers will be drafted in to work on projects, with short-term contracts lasting days, weeks or months. Organisations and workers will develop broad networks of contacts along the way, helping both to shape and sell their brand.

While many will greet the changing nature of work with enthusiasm, others will actively resist the shift away from stability and predictability and towards the relative unknown of gig work.

But the time when full-time jobs were secure is now long gone – almost no full-time employee today can guarantee they will be in the same position in a year’s time.

Add automation into the mix and you’ve got a job market that is unpredictable and uncertain.

For this reason alone, freelance and project work may well be the future for most people – whether they like it or not.

Let me conclude, success in the gig economy – and in the future of work in general – will all come down to having the relevant skills.

While there is still a big market for unskilled work today, this will be eroded by automation over time. Jobs like Uber driver will only exist until driverless cars become the norm.

In the future, skilled work may well be the only type there is.

This will make continuous, life-long learning more important than ever.