How the gig economy is unfolding a secure future for the informal workforce

According to the Economic Survey 2020-2021, India is fast emerging one of the largest markets for flexi-staffing in the world. “During the period of COVID-19 induced lockdown, the increasing role of the gig economy was evident with significant growth of the online retail business,” said the survey. The gig economy has been formally acknowledged in the Union Budget 2021-22. This might bring about many positive changes in the unorganized sector through social, digital and financial inclusion. 

“The arrival of gig would be the game changer for the lower-skilled entry-level workers for whom certification, a permanent job, a social security, and a monthly wage was just not possible”, said Dr. Gayathri Vasudevan, iterating about the possibilities of a secure future for the informal workforce after the gig economy is being formally acknowledged.

Dr. Gayathri Vasudevan, Chairperson, LabourNet, has been making phenomenal contributions towards enabling sustainable livelihoods for millions in India. Now, with the launch of LabourNet’s SAHI platform, a B2B2C gig staffing platform, she is all set to extend the benefits of latest technologies to the informal sector.

To know more about the impact of the gig economy, Team NSN conversed with Dr. Gayathri Vasudevan who shared her views on the impact of the gig economy on the informal sector and about how the gig economy might unfold a secure future for the unorganized workforce. Read on to know more and you can also watch the complete video interview on our YouTube channel for which the link is given below.

Q: How will the gig economy change in the future after its formal recognition in the Union Budget 2021?

A: The gig word itself has become a mantra and there is a growing belief that it will resolve many issues related to employment and will increase productivity for the financially-challenged. India has had a very large informal economy that works on an outsourced modality which is an unorganized task-based model, while in the gig economy, there is a huge technology backbone which is helping to allocate and monitor the tasks. 

Traditionally, the gig model has been applied to very specialized skills. So, the employer or the worker has the freedom to demand the right wages for the right skills. In India, the gig economy will help in formalizing the structures of work, as work is always defined in terms of per day and per month wage.

India has a task-based workforce that needs to be compensated both in terms of wages and security. The arrival of the word gig will probably result in better formalization for workers as time goes.  

Q: How will the gig economy formalize the labour market and secure their future?

A: The gig format is the best way to go forward. Earlier, the entire group that worked on the task were not covered by any social security. The available schemes were for the vulnerable and not for the workers. However, with the arrival of the gig economy, this will change in the next decade. There is recognition that the tasks are paid and are paid for the moment. However, we do require something other than the tasks paid for the moment. We must take care of their social security as time goes on. If we just minimize the term social security and tangible articulate in terms of one or two important elements which will benefit the workers a lot. 

There have been efforts to provide social security to the unorganized through several boards. However, they were not transparent. Under the gig economy, we don’t have that issue as it is more technology-driven and the task a person has performed is well known. It will be easier to provide the unorganized sector better social security. The transparency which is brought in by technology would make it a level playing field for everyone and there would be accountability for the contribution of the person’s welfare. 

We may have to rethink Provident Fund and Health Insurance. Here, we are talking about giving a person the security of wages when they stop working. For this, the financial instrument may change and a new-age Provident Fund and ESIC could be implemented. Frontline workers in manufacturing or services are not in favour of the Provident Fund and ESIC. The workers look at their wages as a CTC. So, must rethink what should be in their hand and what should be secured for their future. 

Q: How will the role of HR agencies, HR companies and recruiters transform or is it going to be redundant in the future?

A: It won’t be redundant as people will always require support. People’s cost is related to how much a company cares for its workers who are contributing to the company’s revenue. So, in this context, HR will have a very relevant role to look beyond just their workforce to those who are there in their extended value chain. The contractual workforce will come to the forefront and the way we work with them has to be rethought. Some of the tasks will become redundant. However, they will become obsolete and will take a new form. It is crucial to provide the extended workforce with the right skill set to make them ready for the future. They should be reskilled and upskilled for them to be more productive and for the companies to pay the right wage. 

Also read: When talent meets technology – how gig economy can bring cheer to India’s underemployed https://nationalskillsnetwork.in/gig-economy-india-underemployment/

Q: Will the formalization of the gig economy attract more people to this who were earlier hesitant to do so?

A: The gig economy may grow wherever we have an ability to be flexible. It is not the quality of the person that will matter but the accomplishment of the task at the right moment with the person who is available to complete the task. Here, a good example could be Ola and Uber. The gig economy has not picked up much as it may not be the most adaptable form for every labour requirement. People’s requirements have to be thought through. It will bring in the formalization of very micro-entrepreneurs too. Persons in the task-based sector like electricians, plumbers, beauticians will benefit from this along with the sector. They will get into the digital inclusion framework which will help them in the long run.

Q: Please tell us about a few initiatives from labournet to understand how the gig economy is being taken into consideration for your organization.

LabourNet recently launched SAHI platform which is India’s largest gig business platform. The platform will aggregate skilled workers from across the country and connect them to temp and gig opportunities. It is a one-of-a-kind platform built to solve on-ground problems that are unique to the Indian context. It will not only fulfill the industry’s demand for quality labour comprehensively, but also will protect workers from underpaid work, non-payment of dues, and poor quality work.

Q: How does the bigger picture of the gig economy unfold? 

A: The gig is applied to the entry-level. The lower order skill sets were already in an outsourced contractual mechanism. Now, with the gig economy, these workers will move into the higher-order skillset. Their skill-sets have got a step-up and that is the relevance of the gig economy. They will get a chance to upskill themselves and get exposed to a certain network which the platforms will bring.