The gig economy is a type of labor market where businesses hire workers temporarily. Organizations hire independent workers and freelancers on a contractual basis for their projects.
Zomato, Swiggy, ola, and uber are a few of the well-known firms that are the foundation of the gig economy in India. Temporary jobs that people find online are an example of the gig economy. These jobs include but are not limited to, freelance employment, fitness training, and teaching.
The freedom to work from distant locations is a major driver of the gig economy since it allows workers to operate anywhere without being constrained by geographic limitations. Gig workers are a great substitute for regular staff for startups and companies that are just getting their operations off the ground.
The term “gig” comes from the music industry, gigs are live performances given by musicians at various venues.
Who are gig workers?
The gig economy includes independent contractors, freelancers, and temporary workers that work for a specific amount of time. The workers’ abilities and competencies are the main determinants of their employability. These workers accept projects from businesses that are relevant to their field of expertise, and they are paid on a project-by-project basis. Gig workers are free to pick and choose when and for whom they work.
Benefits of the Gig economy
• Helps employers save money and resources
In this kind of employee-employer relationship, employers save a lot of resources. The same security and benefits that the employer offers to permanent employees are not required to be given to temporary employees. Freelancers don’t receive any of such perks, including health insurance and access to the company’s resources. Experts can be hired by businesses for a variety of projects without needing to offer them long-term employment.
• Employees have the freedom to have multiple jobs at a time
In this kind of economic model, freelancers are free to decide whether they wish to work for one company at a time or for several. When it comes to permanent jobs, moonlighting is a significant problem. There are contracts between employers and employees to prevent them from engaging in part-time work or any other type of job activity. There are no such contracts or legal agreements in the gig economy. Most freelancers have several different sources of income. They are free to alter their preferences whenever they want. Additionally, it supports better work-life balance.
Drawbacks of the Gig economy
Contractual workers struggle to advance in their careers since their employers do not provide them with the same training as they do for their full-time employees. Many times, independent employees must pay to acquire the skills necessary for their jobs. Other drawbacks of working in a gig economy are :
• No employment benefits
One of the main drawbacks is that gig workers are not qualified to receive any health insurance, sick leave, or other benefits that are provided to full-time employees. For this type of employment arrangement, there is no minimum wage. People are sometimes underpaid for their services due to fierce competition. In India, for example, there isn’t any Indian law that sets a floor wage for the unorganized sector.
• Wage disparities
The gig economy presents major barriers to entrance for women because it exacerbates issues like the wage gap that already exists between male and female workers in the labor market. The proportion of men and women who have access to technological devices and internet platforms is also significantly different. Women primarily engaged in services for beauty and wellness.
• Challenges in maintaining a healthy work-life balance
On the one hand, independent work and freelancing assist some people in maintaining a healthy work-life balance, but for others, it might be challenging to do so. Competitive newcomers can experience burnout from overexertion.
• Job Insecurities
In the gig economy, it is challenging to have a consistent source of income. When a worker is unable to work longer hours because of an emergency or other personal difficulties, it is very challenging to keep the money flowing. Temporary workers are readily available, making it challenging for those looking for full-time employment to locate acceptable positions. Employers frequently desire to cut costs and conserve resources, therefore they refrain from filling certain positions. Making a presence in the market is challenging for inexperienced newcomers who don’t have any clients or networks at first.
How to boost the gig economy?
Although this type of economy has some disadvantages, there is room for improvement. For example, efforts could be made to improve communication between the employer and employee. Since the employee will never visit the office or the physical location of the company, it is crucial to maintain a strong connection through online tools. Employers should explicitly state their expectations of employees from the start as doing so makes work much simpler and less chaotic. Employers must commend cake workers for their efforts as well. They sometimes overlook rewarding their temporary workers and paying them well for the work they do. It makes the market fair and appealing to participate in.
People searching for a source of income after losing their jobs due to the COVID-19 pandemic turned to these online platforms that offer temporary work, which increased the number of workers who are employed on a contract basis. The major actors in the gig economy include Zomato, Swiggy, Ola, Uber, etc. There is a need to specify social security and rules even though these occupations enable people to work autonomously and earn extra money.
Equal representation of men and women in the workforce is also necessary, and it is urgent to change social conventions that establish wage disparities based on gender.