Economy

KEY POINTS

·         Gig Economy - In a gig economy, temporary, flexible jobs are commonplace and companies tend toward hiring independent contractors and freelancers instead of full-time employees.

·         A gig economy undermines the traditional economy of full-time workers who rarely change positions and instead focus on a lifetime career.

Shift of Indian economy

·         Indian labour market is seeing a shift towards gig economy, with an increasing number of workers seeking contractual or freelancing opportunities, and services sector is embracing it at the fastest pace.

·         For example, big companies like Wipro, Infosys, Ola, and Uber hire gig workers on a project-to-project basis.

Advantages

·         Spurts entrepreneurship – India needs billions of jobs, and these can only be produced by self-employment, for which the gig economy is excellent.

·         Increase savings for employers – Gig economy helps business firms reduce financial pressures that lead to retrenchment of staff.

·         Flexible jobs for employees - Employees are increasingly seeking contractual jobs for a greater amount of flexibility.

·         Best talent – Organisations are at liberty to hire the ‘best’ talent in the market who might be difficult to maintain on payrolls because of their cost.

·         Win-Win situation – The model of gig economy is a win-win for both workers and organisations.

·         It helps both select the best job and best worker without attaching any strings.

Disadvantages

·         Subjected to unfair treatment – Gig workers are typically governed by the contract between them and the employers.

·         Since labour laws are not brought into play, the employer is not required to make contributions with respect to statutory safeguards, which will result in unfair termination, low wages being paid, and loss of paid leaves, etc.

·         Low bargaining power – Workers at the bottom of the pyramid in India, especially in the unorganized sector, do not have the bargaining power to negotiate a fair deal with their employers.

·         It is also difficult to get lines of credit from banks, when steady income is not assured.

·         Loss of Team work – Also, in situations where teamwork is essential, gig worker teams formed and disbanded on a case-to-case basis will likely produce tardy, inconsistent and poor output.

·         Confidentiality – In industries, where confidentiality becomes crucial, having less control over the actions of a gig worker will make it challenging for the employer to enforce confidentiality obligations on such gig worker.