India’s gig economy is on the brink of a significant transformation, as highlighted by the Economic Survey 2024 released just before the Union Budget. By the fiscal year 2029-30, the gig workforce is anticipated to surge to an impressive 23.5 million individuals. This would constitute 6.7% of the non-agricultural workforce and 4.1% of the total employment in the country. This rapid growth is a stark contrast to the 7.7 million gig workers recorded in 2020-21, underscoring the dynamic shifts occurring within India’s employment landscape.
Globally, the gig economy is experiencing robust expansion. By 2023, it was estimated to generate a gross volume of $455 billion, a notable increase from $368 billion in 2021.
The COVID-19 pandemic has significantly reshaped the talent landscape, dissolving traditional boundaries and enabling firms to leverage the gig talent pool more effectively. This shift has facilitated a more flexible and dynamic workforce, allowing companies to adapt swiftly to changing market demands.
What is the Gig Economy?
The gig economy is a contemporary evolution of the age-old practice of hiring labourers or artisans for short-term work. While its roots can be traced back centuries, the term “gig economy” is relatively recent. In essence, the gig economy refers to a labour market where task-based workers use digital platforms to find temporary or part-time employment opportunities.
In the gig economy, employers hire workers on an as-needed basis, often as independent contractors. This arrangement means gig workers do not receive the same benefits as traditional employees, such as health insurance, paid leave, or retirement plans. The range of gigs or tasks these workers can perform is vast and varied. Examples include driving for ride-sharing services like Uber or Lyft, offering short-term home rentals through platforms like Airbnb, or completing freelance projects in fields such as writing, graphic design, and consulting.
The gig economy encompasses a broad spectrum of short-term contracts or freelance work, diverging from the conventional model of permanent employment. Independent contractors in the gig economy typically operate within four primary sectors:
- Asset-Sharing Services: This includes property rentals, where individuals can rent out their homes or other properties on a short-term basis through platforms like Airbnb.
- Transportation Services: Ride-sharing services such as Uber and Lyft fall into this category, where drivers offer transportation services using their own vehicles.
- Professional Services: This sector covers a wide range of freelance and consulting work, from graphic design and writing to IT support and business consulting.
- Handmade Goods and Miscellaneous Services: This includes selling handmade crafts, offering specialised skills, or providing various on-demand services that cater to niche markets.
The gig economy’s growth reflects a shift towards more flexible work arrangements, driven by technological advancements and changing economic conditions. It allows workers to have greater control over their schedules and work-life balance, while also providing businesses with a flexible labour force that can be scaled up or down based on demand.
India’s Gig Economy
India has emerged as a significant player in the global gig economy, boasting an impressive 15 million qualified workers. This substantial workforce accounts for 40% of the world’s freelance labour accessible globally, surpassing countries like the United States, China, Brazil, and Japan, and establishing India as the fifth-largest gig economy in the world.
The flexibility offered by the gig economy is unprecedented, allowing workers to choose when and where they work. However, it also brings critical challenges related to workers’ rights, legal protections, and the changing nature of employment relationships.
Globally, the gig economy is on a steep growth trajectory. It is expected to expand at a compound annual growth rate (CAGR) of 14%, reaching a valuation of $455 billion by 2024. This growth rate is significantly higher than pre-pandemic predictions, as reported by Nasscom.
Despite the global participation in the gig economy being relatively low, with less than 0.5% of the active labour force involved according to the World Bank Group’s 2019 report on the Changing Nature of Work, India’s scenario is notably different. The country has seen substantial growth in its gig and platform economy. The NITI Aayog’s 2022 report, “India’s Booming Gig and Platform Economy,” indicates that the share of gig workers in the total workforce increased from 0.54% in 2011-12 to 1.33% in 2019-20. Technological advancements have further fueled this growth, enabling more temporary workers to find opportunities through online platforms.
According to Nasscom, the Indian gig workforce is projected to expand to 23.5 million workers by FY30, up from 7.7 million in FY21. By then, gig workers will constitute 4.1% of the total workforce in India, an increase from 1.5% in FY21. Of these gig jobs, approximately 22% are high-skilled, 47% are medium-skilled, and around 31% are low-skilled.
The Indian tech industry is a major contributor to this growth, representing more than 80% of the industry’s workforce, driven primarily by the escalating demand for digital skills and technologies amid rapid digital transformation. The core tech talent has remained relatively stable over the past three years, maintaining a workforce of 2.5 to 2.6 million professionals. This stability is due to the maturity of core tech roles, which have reached workforce saturation.
Among countries with large tech talent pools, India and China have the lowest demand-supply gap. This favourable situation can be attributed to their strong ability to reskill, supported by vast talent reserves. The robust education systems and proactive governmental efforts in these countries are pivotal in cultivating a skilled workforce that can meet the growing demands of the tech industry.
Survey Insights on Gig Workers in India
A survey conducted by Nasscom, Indeed, and AON, encompassing over 70 organisations, reveals insightful trends in gig worker employment. As of 2022, nearly two-thirds (65%) of the surveyed organisations employ gig workers, a notable increase from 57% in 2020. Despite this increase, gig workers still comprise less than 5% of the total workforce in larger companies with more than 2,000 full-time employees (FTEs). However, in smaller organisations with fewer than 2,000 FTEs, the proportion of gig workers exceeds 5%. Notably, no organisation reported a decline in gig hiring. In about 15% of the surveyed organisations, the proportion of gig workers has increased by more than 30% in the past two years, underscoring the model’s efficacy.
Before the pandemic, gig workers were typically hired for projects lasting up to nine months. However, post-pandemic, the duration of these projects has increased significantly. Currently, 25% of the surveyed organisations are open to hiring gig workers for projects exceeding 12 months, indicating a growing demand for talent and the effective use of gig workers to meet short-term needs.
When determining compensation for gig workers, organisations consider several factors, including proven expertise, qualifications, and relevant experience. Over 40% of the surveyed organisations set a fixed fee at the initiation of a gig contract. Additionally, 53% have policies in place to absorb gig workers as full-time employees. Furthermore, over 90% of the surveyed organisations remain open to re-hiring gig workers in the same or adjacent areas based on past performance evaluations.
These trends highlight the evolving nature of employment in India and the increasing importance of the gig economy in the country’s labour market. As technology continues to advance and the demand for flexible work arrangements grows, the gig economy is poised to play an even more significant role in shaping the future of work in India.According to a Nasscom Aon report, India’s gig workforce is projected to reach 23.5 million by 2030 — up from 7 million in 2021. This means gig workers will constitute 4.1% of the total workforce in India by the 2029-30 financial year, compared to 1.5% in the 2021-22 fiscal year.
High-Paying Jobs in the Gig Economy
The gig economy has seen a remarkable surge in recent years, with a significant portion of the workforce shifting to independent work. In 2022, McKinsey’s American Opportunity Survey reported that 36 percent of employed Americans were engaged as independent workers, up from 27 percent in 2016. Looking ahead, Global Workplace Analytics forecasts that by 2025, approximately 70 percent of the workforce will work remotely at least five days a month. Simultaneously, Tata Consultancy Services estimates that around 40 percent of the global workforce will be working from home by the same year. These statistics underscore the permanence and growth of the freelance economy.
The World Economic Forum’s ‘Future of Jobs Report 2023’ anticipates significant changes in the global job market over the next five years. According to the report, 23 percent of jobs are projected to undergo transformation, with some roles experiencing a 10.2 percent growth while others see a 12.3 percent decline.
Success in the gig economy hinges on leveraging existing skills and expertise to secure high-paying opportunities that align with one’s schedule, interests, and financial goals. By researching the best platforms and optimising one’s profile, freelancers can maximise their earning potential.
According to Forbes magazine, the following are ten of the highest-paid jobs in the gig economy:
- Market Researcher: Professionals who analyse market conditions to identify potential sales opportunities.
- Artificial Intelligence Engineers: Experts in developing AI systems and applications.
- Content Creators: Individuals who produce engaging content for various digital platforms.
- Influencer Marketer: Specialists who leverage social media influence to promote products or services.
- Cloud Engineers: IT professionals who design and manage cloud computing solutions.
- Art Directors: Creative leads responsible for the visual style and imagery in various media.
- Business Consultant: Advisors who provide expert business strategies and solutions.
- Agile Coach: Professionals who help organisations adopt and implement Agile methodologies.
- UX Strategist: Experts in enhancing user experience across digital platforms.
- Brand Consulting Specialist: Advisors who develop and manage brand strategies.
These roles highlight the diverse and lucrative opportunities available in the gig economy, catering to a wide range of skills and professional backgrounds. As the gig economy continues to evolve, it offers a dynamic and flexible career path for those looking to capitalise on their expertise in a rapidly changing job market.
Challenges in the Gig Economy
While the gig economy offers flexibility and autonomy, it also presents significant challenges that can impact workers’ well-being. One primary disadvantage is the extended work hours that gig workers often endure. Without the structured contracts of traditional employment, which typically include regulated work hours, gig workers may work longer days to meet deadlines or secure enough gigs for a stable income. This lack of structure can lead to poor work-life balance and exhaustion. Additionally, gig workers do not receive company benefits such as health insurance, paid leave, or job security. As a result, they must bear the full cost of healthcare, take unpaid time off if they fall ill, and face constant uncertainty about their employment status. This absence of job security is particularly concerning, as gig workers can be easily replaced or have their contracts terminated without the protections that permanent employees enjoy.
Moreover, the legal framework surrounding gig work is often inadequate, leaving gig workers vulnerable. Many government laws and regulations are designed for traditional employment and do not address the unique circumstances of gig economy workers. This creates numerous loopholes that companies can exploit. The temporary nature of gig work also contributes to financial instability, as workers frequently need to search for new jobs and manage fluctuating incomes. This instability makes it difficult to plan for the future, secure loans, or save for retirement. Furthermore, the competitive nature of the gig economy can drive down wages, forcing workers to accept lower pay to stay employed. Lastly, the isolation and lack of a support network can be psychologically challenging, as gig workers miss out on the social interactions and support systems that come with traditional employment, potentially leading to feelings of isolation and decreased mental well-being. Addressing these challenges requires a concerted effort from policymakers, companies, and society to ensure that gig workers receive the protections and support they need to thrive.
