The traditional employee-employer relationship has changed significantly over the last three years as the Covid-19 pandemic turned the conventional workplace upside down. It has, however, been evolving for several years, if not decades, with the emergence of the gig economy and its gig workers.
This is a significant development not just for the workplace as permanent employees become an even rarer breed and a full-time 9-to-5 job is, well, boring for the new generation, but also in terms of workforce policies. According to labour market experts, countries must balance the need to create more jobs through the gig economy while also ensuring that it does not become skewed in favour of employers.
But the basic approach of seeing through an equilibrium for the market and devising policies would depend on the estimation and projection of the gig workforce, to begin with.
This is not an easy task as there are methodological issues. For starters, workers who are not identified as employees, and counted as partners, pose the question of classification as wage earners or self-employed. Workers taking up multiple tasks with contracts on a task-by-task basis make it a confounding exercise. Then, there are data gaps in the field.
Due to the nature of gig and platform work, there is no official estimate of the workers at this time. This could well change in the future as conventional jobs convert into gig work, or get ‘gigged’, and with the emergence of new sectors that essentially employ such a workforce.
Who are the gig workers?
Gig workers can broadly be placed into two buckets: platform workers and non-platform-based workers. The latter covers casual wage workers and own-account workers in the conventional sectors, working part-time or full-time. Platform workers, on the other hand, include those whose work is based on online software apps or digital platforms. Location-based platforms allow in-person work at specific locations, such as delivery or driving while web-based platforms enable workers to perform online tasks for clients around the world.
Gig workers are also essentially different as they are comparatively young, work for fewer hours a day, prefer a flexible work schedule, and typically have a low to mid-level education. Indeed, income from gig work is not their primary source of income, and they often hold another regular job.
They are believed to value transparent, timely, and assured payments, and they are not too hung up on non-wage benefits.
Gig Measuring up
There have been various estimates presented by different agencies and reports, including those by the Michael and Susan Dell Foundation and Boston Consulting Group (BCG) which pegged gig economy jobs at 8 million as of 2020 and projected to shoot up to 90 million in the non-farm sector in a decade. They added that by 2024-25, about 24 million jobs could get converted to technology-based gig labour (i.e. platform work) with another 11 million jobs getting converted in shared services and household demand.
Others that have tried to size the market include Fairwork India, ASSOCHAM, Betterplace and TeamLease, the second-largest staffing services firm in India. TeamLease estimated that gig workers in India increased from 8.5 million in 2016 to 11.7 million in 2017, and 15 million in 2018 while noting that over half of the new employment in India is being generated by gig economy companies across both blue- and white-collar workforce.
Net-net, the estimates of gig workers vary from 3 million workers to 14 million. The Indian government’s primary economic planning authority, NITI Aayog, looked at various datasets to estimate the size of the gig workforce.
The NITI Aayog found that gig work, especially location-based gig work, is largely concentrated in urban areas. Technology in the form of smartphone-powered platforms has reduced transaction costs substantially in the recent past. This opens the possibility of gig work growing beyond the local, though this is restricted by the need for agglomerations to reap economies of scale and scope.
Also read: 5 Types of Rising Grey Collar Gigs
But penetration is growing. For instance, passenger mobility services using two-wheelers (mopeds, scooters, bikes), hyperlocal deliveries, and e-commerce services, among others, have reached over 300 cities in India.
The estimates show the number of gig workers have grown at a compounded annual growth rate (CAGR) of over 13% between 2011-12 and 2019-20.
The overall number has grown from around 2.5 million to 6.8 million during the year preceding the Covid-19 pandemic. Within this, the number of gig workers who spend the majority part of the reference year as gig workers were 2.45 million in 2011-12. This increased to 6.7 million in 2019-20. Those that did such work for a shorter period of the year increased from about 70,000 to 110,000 during 2011-12 to 2019- 20.
The report noted that these numbers capture workers that have gig worker-like characteristics, with a possible overestimation as some of these workers may not be engaged in gig work.
To be sure, the double-digit annual increase in gig workers through the last decade came on a low base. As per the estimates, only a small fraction of the total workforce is part of the gig workforce as of now. About 1.33% of the total workers were gig workers by 2019-20.
But there has been a steady rise in the population of this work tribe from just 0.5% a decade ago, barring a minor dip in FY19.
Overall, of the nearly 40 million new jobs added in the country between FY12 and FY20, 4.3 million were because of the increase in gig workers. However, some gig workers could have been converted from conventional jobs.
Another interesting statistic lies in the split of gig workers between organised and unorganised sector. The trend over the eight-year period ended March 2020 shows how the shift has happened with an increasing proportion of gig workers in the organised sector or sectors where firms have more than ten employees.
Although gig workers are still largely concentrated in the unorganised sector, as against a decade back when just one-in-four of gig workers were in the organised sector, there is a clear shift with over one-in-three now in the same basket.
The NITI Aayog report goes on to provide a projection of how it expects the gig workforce to expand. In particular, it estimates that the gig workforce will likely expand from 6.8 million in 2019-20 and 7.7 million in 2020-21 to about 23.5 million by 2029-30.
Concurrently, the gig workforce is expected to grow from 2.6% of the non-agricultural workforce, or 1.5% of the total workforce in 2020-21, to 6.7% of the non-agricultural workforce, or 4.1% of the total livelihood in India by 2029-30. In other words, in another seven years, one in every 25 workers in the country and one in every 15 of those not working in the farm would be a gig worker!
Also, one in three new jobs in the country could be created in the gig economy in the next seven years.
Gig workers are currently a small proportion of the overall labour market. But their numbers would gather pace over the medium term due to the emergence of new sectors that predominantly depend on gig workers and conventional jobs getting ‘gigged’. In fact, one in every 15 workers outside of the agriculture sector could be gig workers in the next seven years.
HR desks and labour market policy makers need to design their future of work game plans with these dynamics in mind.