In a gig economy, businesses save resources in terms of benefits, office space and training

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With disruptive technological trends like Artificial Intelligence (AI), robotics and automation, the business models and industries are experiencing transformation, shaping the future of workforce; giving rise to the so-called gig economy. A gig economy envisages an environment wherein temporary positions are common and organizations engage independent workers on short-term contracts. This trend shall catch on sooner than we expect. McKinsey Global Institute, in its report released in December 2017, predicts that even if there is enough work to ensure full employment by 2030, about 75 million to 375 million workers (3-14% of the global workforce) will need to switch occupational categories because of automation technologies that include AI and robotics.

There are a number of forces behind the rise in short-term jobs. For one thing, in this digital age, the workforce is increasingly mobile and work can increasingly be done from anywhere, so that job and location are decoupled. That means that freelancers can select among temporary jobs and projects around the world, while employers can select the best individuals for specific projects from a larger pool than that available in any given area.

Digitization has also contributed directly to a decrease in jobs as software replaces some types of work and means that others take much less time. Other influences include financial pressures on businesses leading to further staff reductions and the entrance of the Millennial generation into the workforce. The current reality is that people tend to change jobs several times throughout their working lives; the gig economy can be seen as an evolution of that trend.

In a gig economy, businesses save resources in terms of benefits, office space and training. They also have the ability to contract with experts for specific projects who might be too high-priced to maintain on staff. From the perspective of the freelancer, a gig economy can improve work-life balance over what is possible in most jobs. Ideally, the model is powered by independent workers selecting jobs that they're interested in, rather than one in which people are forced into a position where, unable to attain employment, they pick up whatever temporary gigs they can land.

Here are a few platforms that are growing the gig economy by providing connections between contractors and customers across several industries:

Uber: It lets you use your personal vehicle to start earning money through its Uber Partners app. This is a very flexible platform that allows you to choose when and where you drive and set your own schedule.

HopSkipDrive: This is a great idea for parents that are very busy. HopSkipDrive is a service for kids that uses carefully vetted drivers with a clean background, five years of experience with childcare and be 23 or older.

Airbnb: What Uber does for your car, Airbnb makes possible for your property. Whether it is a single room or your entire apartment, condo, RV or home, you can use this app to rent it with a free listing

India is also a growing hub for Gig economy and is seen to be one of the largest markets witnessing this shift. As ‘freelancing’ takes wings in India, a significant 41 per cent of Indian freelancers witnessed growth in last 12 months, a new PayPal study has revealed. Nearly 23 per cent of them had annual earnings of ₹60 lakh. Also most Indian freelancers have been working independently for close to four years. By one estimate, India could have up to 20 million ‘freelancers’ — individuals who use computers/internet to offer services in both domestic and international markets. Employees are increasingly willing to sacrifice the additional benefits that come with a permanent job, such as gratuity or health insurance, in exchange for a greater amount of flexibility. This is also evident in the findings of the industry estimate regarding the Indian ‘freelancers’ market size which is predicted to grow to a whopping $20-30 billion by 2025.

The gig economy has its pros and cons for freelancers, with work-life balance, freedom to work anytime anywhere and variety on the plus side. While uncertainty, lack of benefits, erratic schedules and complex tax obligations due to working in multitude of different jobs across various sectors make up for some of the challenges. As for businesses, the gig economy provides many positives, including contracting experts on a project basis and saving on resources such as permanent salaries, benefits, and office space. However, the other side of the coin is difficulty to find reliable freelancers who can keep up a high quality of work. The ownership of Gig workers could also be questionable as they might have their own preferences, and could change their area of focus midway leaving the employer stranded. be. As it grows in prominence, companies will require new tools, systems and processes to respond and adjust to the complexities of this 21st century work stream.

With emergence of Gig economy changing the entire business landscape, HR too needs to be vigilant of the challenges this change would impose and adopt the right strategy to be prepared for this trend. To  begin with, HR needs to revise its basic framework of employment to include gig workers, freelancers and other contingent workers in the organization. Factors such as Confidentiality and the use of commercially sensitive information will need to be addressed by putting in place a sound risk management. The talent acquisition, talent management and the reward strategy would need to be relooked at to encompass the requirements, demands and unique circumstances of this new workforce. HR needs to be aware of the Legal or regulatory uncertainty and contractual obligations that may arise for its employer. HR’s focus should be to become the Employer of Choice for Gig workers.

Provided the correct systems are put in place, companies are set to enjoy numerous benefits from on-demand labour. The ability to swiftly scale the workforce up and down in response to changing workloads, access to a wider pool of hyper-specialized talent, and increased productivity can help companies reach KPIs and boost the bottom line.

Disclaimer: The views expressed in the article above are those of the authors' and do not necessarily represent or reflect the views of this publishing house