An Era of the Gig Economy: A General Workforce Environment
We are living in an era where competition is growing every single day. Environment is being used extensively. The most challenging area for a developing economy is employment. Our economy has rapidly altered from long term employment opportunities to short term employment opportunities. With respect to employment, this blog will expansively talk about the gig economy.
Before we move towards the gig economy, let us understand first that what is a gig economy. Traditional jobs offered stability and growth, on the other hand, gig economy includes short term jobs, contractual jobs, freelancing, etc. Since, it is an era of digital age, therefore, with the digital transformation, it has become very easy for people to find the right jobs for themselves. To name few, Upwork, Uber, Airbnb, etc., are the ones which made the job search very easy. Sense of flexibility and new opportunities can be found in the gig economy. Though it sounds very positive, but still there are several challenges.
As mentioned above, the Gig economy is mostly facilitated by the digital platforms. These digital platforms connect the employees with the patrons. For example, Urban Clap is being used by so many professionals to find their clients. Similarly, Upwork is being used by the freelancers where they can offer their talents and services. Gig economy is not limited to these, as a matter of fact it ranges from transportation to hospitality to creativity to individual professional services and many more.
What are the Benefits of The Gig Economy?
In this fastest growing competitive economy, Gig Economy is providing a platform to all the professionals, freelancers, etc., to participate and earn their living.
Following are the benefits of The Gig Economy:
- Flexible work platform: In gig economy, the best part is its flexibility. The professionals can decide for their location and time as per their availability. Today, there are multiple tasks to be done by a single person, which includes, upskilling, parenting, balancing professional life and personal life, etc. According to Bruckner (2019), this independence helps the professionals to have a better work life balance, which brings both quality and efficiency in their work.
- Employment Opportunities: As explained previously, Gig Economy is a great platform for professionals who are not able to connect with their clients, hence getting a single platform for the opportunities. This type of job facilities is not present in the traditional employment system. Here, the person can search for jobs without the restrictions of a full-time job. Gig economy is beneficial in terms of gaining good expertise and earning money quickly. Kalleberg (2011), “gig work can act as a bridge to more permanent employment, providing crucial income during transitional periods”. This type of job opportunities works well at the time of recessions when traditional jobs are threatened.
- Skill-Development: The type of work gig economy provides helps the individuals to enhance their skill. They also diversify in various skills. When the professional works on numerous projects, they get connected with several clients, and broaden their expertise. This is a continuous process and thus adds value to today’s fast changing competitive economy. Sundararajan (2016), “gig workers often become more versatile and capable of handling multiple roles, making them attractive to future employers”.
- Cost Benefit: Gig economy comes with a saving package. It significantly lowers down the cost. Even for industries, where the employer can hire free lancers or other experts for a particular work without engaging the employee for long term, where he is required only for a specific project or task. This helps in reduction of costs related to salary, perks, office utility, etc. In addition to this, companies can add or subtract the workforce as per their requirement, without getting involved with the issues related to hiring and firing. This can be extremely beneficial to new business or seasonal businesses.
What are the Drawbacks of The Gig Economy?
Though there are many benefits of Gig Economy, but there are many shortcomings as well. Let us see the limitations.
- Volatile Income: Gig economy shows huge flexibility, but with this flexibility, volatile income is a serious issue. There is no guarantee for the professional to get the work and income in return. Their income may vary extremely every month. This makes it very difficult for the professional to make financial plans. Instability makes it hard for them to survive emotionally as well.
- Absence of job benefits: In case of traditional jobs, multiple benefits are being provided to its employees like, medical insurance, earned leaves, travel benefits, retirement benefits, etc. In case of Gig Economy, such benefits are absent, as the professionals get work on daily basis and there is no one employer. This keeps them away from such benefits. Such benefits are extremely important in case of illness, accidents, etc. According to Kalleberg (2011), “the absence of benefits and job security is a significant downside of gig work”.
Conclusion
To reap the benefits and reduce the limitations, it is important to introduce certain policy frameworks so that interest of the gig workers can be protected in terms of medical insurance, fair earnings, and other benefits. The policy in terms of minimum wage law has already been implemented, such measures can benefit the gig workers. The gig economy can help upgrade the environment of the workers of gig economy. The gig platform can improve the work culture of the gig workers by providing all the benefits which are being enjoyed by the traditional workers. This will create a sustainable gig environment.
The BA (H) Economics students at the NorthCap University are well trained to understand such economies, constraints, environment and create dummy policies and regulations, work on them and then see how this can affect the economy. Such practical exposures make our students unique and industry ready.
References
Bruckner, C. (2019). The gig economy: The good, the bad, and the unknown. Economic Perspectives.
Kalleberg, A. L. (2011). Good jobs, bad jobs: The rise of polarized and precarious employment systems in the United States, 1970s to 2000s. Russell Sage Foundation.
Sundararajan, A. (2016). The sharing economy: The end of employment and the rise of crowd-based capitalism. MIT Press.
Authored By
Dr. Priyanka Banerji
Assistant Professor (Selection Grade)
Department of Management & Commerce
The NorthCap University