Dr B K Mukhopadhyay
(The author is a Professor of
Management and Economics, formerly at IIBM (RBI) Guwahati. He can be contacted at firstname.lastname@example.org)
Dr. Boidurjo Rick Mukhopadhyay
(The author, international award-winning development and management economist, formerly a Gold Medalist in Economics at Gauhati University)
A 'Gig Worker' or 'Gigger' is someone who is employed on a freelance basis, carrying out short-term jobs or contracts, to one or more employers. Some refer it as the 'sharing economy' in the context of 'collaborative consumption', whose projected growth is around $2.7 trillion by 2025. The concept of 'contingent workforce management' is nothing new but has been reshaped by the introduction of 'gig economy'. Some of the gig workers or giggers may rely on a website or app to help them find or organize their gig work, others may connect more with word-of-mouth in this business of reputation. Examples of gig workers could be delivery riders or ride-hailing drivers working with Swiggy, Zomato, Uber; DiDi in China; Deliveroo in the UK; TaskRabbit, Lyft in the US. Gig economy configures work to be broken down into components that allow tasks to be tailored and allocated as required.
1. Gig Economy and Entrepreneurship
Gig work and entrepreneurship have strong interlinkages. Various types of gig work within the gig or sharing economy encourages new venture creation by giving potential entrepreneurs a means to supplement their income. This is particularly useful during the lean times that many new ventures experience, so maintaining multiple gigs simultaneously could be a huge plus. When the core business or full-time work doesn't pick up or fails in worst cases, gig work gives the entrepreneurs a safety net. Research shows that in markets with poor credit risks, the gig economy provides a source of capital to potential entrepreneurs, thereby transforming them into more creditworthy or at least less dependent on (frequent) credit.
Broadly, there are two categories of gig work; A) those who offer their services as 'independent contractors' – individuals who consider themselves as self-employed and their 'own boss', and B) who work as 'contingent workers' and under certain obligations with a company, a bit similar to full-time 'workers' except the right, security and usual benefits. Researchers have also classified the above two categories into two further classes, gig work in the 'web-based platforms' (e.g., software developers and multimedia, sales and marketing support, professional services) and those who are 'location-based (e.g., Airbnb, Uber, Ola, DiDi). In both groups, however, the service provider invests their own resources (e.g., Uber providing ride-sharing services with the cars owned by the company or shared cars with the passengers), and users pay the fee while the company earns a commission from each payment. Examples of knowledge-based gig workers are largely found under web-based platforms. And 'online reputation' does the marketing for the gig workers since customers read reviews and goes on the basis of rating or scores before deciding who to have the transaction with.
2. Statistics illustrating the dawn of the Gig Economy
A study by the McKinsey Global Institute evidences that 150 million workers in North America and Western Europe are working in the 'on-demand economy', i.e., where an individual can partake in contractual work instead of traditional work. While the concept or the trend isn't anything new, but the growing number of individuals engaged in the sharing economy is new. Research also shows that 20-30 per cent of the Canadian workforce falls under the category of freelancers, consultants, contractors, and contingent workers. This brings up the consideration that companies need to make around 'agile workforce' looking at the future. So, the numbers not only verify a trend, but also hint at a projected nature of the 'future of work'.
Further into the demographics, in the US - the gig workers in the age group 25-34 years accounted for 24.9%, occupying the highest proportion among all groups, and 24.3% of ages for 45-54 years. These percentages are a lot higher in Germany, United Kingdom, Switzerland, and Austria while comparing with the US. For example, about 50% of gig workers were under the age of 35 in these countries, while it was close to 60% in Sweden. It also exceeds 40% in Italy and the Netherlands, as per a study by Huws in 2017. It is well known that European countries have recently suffered from high unemployment while the US remains almost fully employed with less than 5% unemployment. It can be estimated that the proportion of young people in the gig economy is growing in countries with high unemployment. In the UK, the number of gig economy workers is estimated to be about 2% of the total population.
On a related note, large investment firms and also banks have finally acknowledged the growth rate and success of the gig economy, and therefore has become a key player/ finance partner for giggers, a lot the past decade. Similarly, the technology platform developers and web designers have a renewed market growth. As mentioned earlier, while the gig economy itself isn't anything new but the overwhelming dependence on 'web-based services' demands a fresh look at the sector. If a gig isn't on service available via a phone app, it probably does not exist at all. Therefore, the partnership mechanism between the gig workers and the company that makes the services available on an app is crucial.
3. Motivation and Adaptability
The primary motivation of gig workers typically sources from the following - flexibility, additional income, freedom and other forms of job revolvement and rotation. Due to the dependence of apps, digital competencies are becoming a significant resource and precondition for employment. So, it is now a very common practice that companies like Lyft, Uber, and in food delivery services promotes and trains digital entrepreneurial skills. This is easier said than done, particularly for specific age groups where the time and learning ability required to pick up new set of digital skills is slower than the pace of change taking place frequently. Similarly, the rural-urban migration of workers who seek gig work, e.g., ride hailing services, takes them longer to assimilate with new practices. Imagine someone driving one of those old ambassadors in the streets of Kolkata without google maps or a talking car guiding the journey, from a time where drivers were recruited on the basis of their knowledge of roads and regions, and when they switch to driving for Uber or Ola. Besides understanding the responsibilities and company rules with regard to price of a ride as set by the app, punctuality, etiquettes, amongst others – the digital literacy remains as the key expectation. Flexibility, resilience, adaptability, and fast learning ability without the support of 'colleagues' or 'peers' are therefore certain requirements in the gig economy.
4. Challenges and Determinants of Gig Workers
Statistics from a study by McKinsey shows that:
- 89 per cent of previously self-employed freelancers were found happier since joining a co-working environment with a routine and workplace colleagues
- 79 per cent of the surveyed giggers said that co-working spaces improve their social networks
- 87 per cent of giggers felt that building meaningful relationships with co-workers and socialising outside work improved mental well-being.
The University of Calgary conducted a survey on gig workers, particularly looking at rideshare drivers, freelance editors, creative workers, consultants, designers and online digital piece-workers – these therefore included all the groups that come under the gig economy as mentioned earlier in this article. Their research identified six categories of challenges that gig workers tend to experience on a frequent basis, A) viability, B) organizational, C) identity, D) relational, E) emotional, and, F) career-path uncertainty. First and foremost, without a predictable salary, the gigs don't seem financially viable at times. In addition, without the essential administrative support that usually is available in organizations, e.g., marketing, accounting and finance, it is generally challenging to organize the logistics of work - particularly when the size of a business fluctuates over time. Also, due to the lack of interpersonal and peer-to-peer environment, identity becomes a huge issue which is compounded by the lack of communication with regular colleagues or fellow 'giggers'. This is also called as the 'holding environment'.
The lack of clear-cut roles, which is easier to identify while working for an organization, makes the concept of identity blurry. This can make differentiating gig from the gig work ever harder. Naturally, the thoughts of career uncertainty are often recurring as a gigger typically lives on a 'feast or famine' lifestyle. The frequent highs and lows at the workplace can potentially create emotional turbulence at times. Finally, also the aspect of 'what is my purpose at work?', and giggers are often found reflecting on how willing they are to do work out of alignment with their values. To find authenticity, a gigger must identify what is the larger goal or value that their work is helping to achieve, e.g., solving a problem that other services do not offer in a given market, supporting a community need, starting a new line of work benefitting a society thereby creating more local jobs and new supply chains, or simply add to the workforce of established gig work that is experiencing a growth both in the regional and national economy thereby also risking being easily 'replaceable'.