Technician in India.
Frédéric Soltan | Corbis News | Getty Images
India’s work culture is at a turning point.
The coronavirus pandemic is rocking the country’s workforce, shifting the focus heavily to jobs in the gig economy – or to part-time work that is available to contract workers on call.
According to industry experts who spoke to CNBC, the global adoption of remote or home working has reset expectations, employment decisions, and work cultures.
“We believe there will be structural changes as part of a hybrid workforce that combines personal employees with virtual employees,” said Sandip Patel, managing director of IBM India and South Asia, in an email.
“It’s a battle for skills and talent that drives the business and talent model … and gig staff are sure to have a strong place in the future workforce.”
The workforce changes come as India battles a second wave of the coronavirus pandemic. Covid-19 cases in the South Asian nation hit record daily highs over the past month. India had 362,727 new infections in the past 24 hours, with 4,120 deaths reported on Thursday.
India is the second most severely affected country in the world. According to the U.S. Department of Health, there have been officially more than 23.7 million cumulative cases since the pandemic began. The death toll so far stands at 258,317 – a number health experts have questioned as they say the real numbers are not being given.
The recent surge in cases has marginalized the health system as hospitals run out of beds, run out of oxygen and overflow morgues and crematoria.
Many companies will not resort to the same process of hiring employees or even working with full-time employees, as having a pool of gig staff is more cost-effective for companies.
Navkendar singh
Research Director, IDC India
While Covid cases continue to take a human toll on India, it has also disrupted the country’s workplace.
The South Asian nation has always been known for having a large pool of informal gig workers, such as: B. Contract workers on construction sites – but Covid-19 accelerates this trend even more.
“The pandemic is really speeding up the conversations around them. Now, more companies are open to people working remotely than before, Covid,” said Navkendar Singh, research director at information technology consultancy IDC India, in a telephone interview.
“A lot of companies will not go back to the same process of hiring employees or even working full-time because having a pool of gig staff is more cost-effective for companies,” he said, adding that such changes are changing in Indian work culture “becomes permanent” over time.
India’s “gig economy”
The potential growth of the gig economy in a country like India is enormous.
India’s Associated Chambers of Commerce and Industry (Assocham) have forecast that India’s gig economy will grow at an average annual rate of 17% to $ 455 billion by 2023, according to the Economic Times.
A recent report jointly published by the global management consultancy Boston Consulting Group (BCG) and the nonprofit Michael & Susan Dell Foundation further underscored the growing trend.
It has been predicted that India’s gig economy could triple to 24 million jobs in the non-agricultural sector in the next three to four years – from the current 8 million jobs. The number of gig jobs could rise to 90 million in 8-10 years, with total transactions valued at more than $ 250 billion, the report said.
According to the report, the gig economy is expected to contribute 1.25% to India’s gross domestic product (GDP) over the long term.
On the one hand, the pandemic has led to a large loss of traditional jobs in both the service and manufacturing sectors. On the other hand, it made the development of a gig economy easier.
Tulsi Jayakumar
Professor of Economics, SP Jain Institute of Management and Research
“The gig economy offers India the opportunity to drive job creation and economic growth. Technology platforms operating on a large scale in an ecosystem of information and services can help unleash efficiency, create transparency between supply and demand, and create a to drive greater formalization and financial inclusion. ” said Rajah Augustinraj, director at BCG and a lead author, on the report.
The increasing role of the gig economy was evident in the significant growth in online platform businesses during the pandemic-induced lockdown, said Tulsi Jayakumar, professor of economics at the SP Jain Institute of Management and Research in Mumbai.
“On the one hand, the pandemic has resulted in a large loss of traditional jobs in both service and manufacturing sectors. On the other hand, it has facilitated the development of a gig economy,” she told CNBC in an email.
She said the national lockdown and the associated needs of Indian customers had “led to a bloom in platform businesses and the associated tech-based gig workforce.”
Domestic challenges
Despite its enormous potential, India’s gig economy is still at a very early stage and faces many challenges.
The main problem for gig workers is the lack of social security benefits – how to pay medical expenses and get a living. Critics argue that there is no guaranteed minimum wage and that these workers have few statutory collective bargaining rights.
Almost 90% of Indian gig workers lost incomes during the Covid-19 pandemic and are concerned about their financial future. This comes from a survey by Flourish Ventures, an early-stage venture capital firm.
Given the problems gig workers face, India needs to rethink its current labor laws to better protect them, SP Jain’s Jayakumar stressed.
“The government would need to identify and evaluate existing laws and regulations that could cover the gig economy in order to support its growth environment while protecting workers,” she said.
Let’s start by creating guidelines for them (gig workers) that will make them feel part of the overall job ecosystem.
Navkendar singh
Research Director, IDC India
During this year’s budget announcement, Indian Finance Minister Nirmala Sitharaman announced a key move to expand social security benefits for the country’s gig economy workers.
“For the first time in the world, social security benefits are being extended to gig and platform workers. Minimum wages apply to all categories of workers and are all covered by Employees State Insurance Corporation,” said Sitharaman in her household address.
While the move is a step in the right direction, the Indian government needs to do more and develop policies that will allow the gig sector to flourish, IDC’s Singh said.
“Let’s start developing guidelines for them (gig workers) that will make them feel like they are part of the overall job ecosystem. This could fuel India’s gig economy very quickly,” he said.
“I think the government will do something about it.”
