Gig economy will need to create own ecosystem with better wages and social support: MyMobiForce Co-founder Himanshu Kumar

Gig workforce — the workers who deliver on commitments utilising their knowledge and skills, and trade ethically but are not bound by employer-employee contract in the long run — is the future of the country. India has traditionally been supportive of gig workers, as every type of trade, other than the organised sector, is dependent on them.

Technology provides opportunities for competent people and forces the workforce to keep on updating skills and targets. In a way, gig economy is a self-managed process to maintain a highly skilled and competent workforce, well versed in technology and responsible for their obligations.

Without these basic criteria, it will be difficult to get assignments, especially tech led projects. Hence, it is a win-win situation for both employers and gig workers to engage with a competent workforce without getting all of them on payroll.

The entire ‘Work from Home’ scenario that evolved through the pandemic into ‘Work from Anywhere’ situation has definitely thrown up more opportunities for the gig workforce, albeit challenging ones, as the job market itself is in the doldrums due to multiple COVID-19 waves.

Workers, who now want to have a shot at realising their dreams, while earning and without getting drawn into the daily routine of going to office, will also be more adaptive to the demands of the gig economy.

In short, the future of the gig workforce is bright from both the opportunities angle and the maturity viewpoint of the market. As per the BCG report ‘Unlocking the Potential of the Gig Economy in India’, the gig economy has the potential to serve up to 90 million jobs (roughly 30% of India’s non-farm workforce), possibly adding up to 1.25% to India’s GDP and creating millions of jobs across all sectors of the economy.

The attraction of gig economy and the workforce opting to stay in gig employment formalises a unique employment relationship that is set beyond any traditional measure. The process eliminates the traditional barriers of working while offering freedom of choice and delivery.

Challenges in GIG engagements

Gig engagements, while good for technology geeks and skilled workers, are low-paying at the lower end of the skills chain. With no social security and job protection, it worsens the social and financial health of workers, damaging the economy’s growth prospects.

Moreover, as gig work is not permanent, it becomes the first target of dismissal with the fall of the economy. As the GDP cycle in an economy balances out, gig workers face the problem of continuity.

While a lot of has been contemplated around the efficiency of the gig economy in bridging the employment target of the economy, it is important to keep in mind the economic and social background of the gig workers.

India essentially lacks government-supported social security measures. Coupled with this, if the job structure also becomes temporary, it creates a scenario where people will become insecure to the extent that it will block personal and economic growth in the long run.

Policy move

In fact, the government also realises this loophole in the gig economy despite the rosy picture that is being painted. In the budget 2021-22, the finance minister had announced that social security benefits will extend to gig and platform workers.

Minimum wages will apply to all categories of workers, and they will all be covered by the Employees’ State Insurance Corporation.

While this still does not fully support a job loss situation for gig workers, it is still better than nothing. Also, this does provide the direction in which the Indian government will go in case of supporting the gig economy.

However, like any new area, the new Code on Social Security of 2020 has so far failed to provide concrete plans, timeline and definitive funding architecture for any social security scheme – as against very specific provisions provided in the earlier laws that have been replaced with the code.

Gig workers find a place as unorganised sector workers in this code but the actual security cover remains vague. Section 109 of the code says the central and state governments “shall frame and notify, from time to time, suitable welfare schemes for unorganised workers”.

Going forward

Everything said and done, the gig economy is here to stay. Especially the technology-enabled ecosystem, which needs quick learning, implementation and turnover, will always try to find the best persons available for the jobs. Also, it does help women workers and less skilled people to find partial engagements.

However, it is important to lay down the basic ground work for sustaining such a dynamic platform—regular skilling, clear clauses of benefit in case of job loss and bridging the need of employers with the service providers.

Like every other employment, the gig economy will also need to create its own ecosystem with better wages, social support system and recognition of the unorganized sector.

by Himanshu Kumar, Co-founder, MyMobiForce

This story was originally published on Moneycontrol on March 14, 2022. Other than the heading, no major changes to the write-up were made.