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Gig economy and india

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Economics of the Gig Economy
Economics of the Gig Economy
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Gig economy and india

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 A gig economy is a work environment ( borderless and technology enabled) where organizations /businesses hire temporary workers or freelancers instead of full-time long-term employees. In the consulting/knowledge working context, the gig economy is often referred to as the open talent economy, a term largely attributed to Deloitte Consulting.
 Gig economy is at nascent stage in India and Asia.
 Web and ,mobile development, web-designing, internet research and data entry are the key focus areas for Indian freelancers while some of them are also engaged in accounting, graphic design and consulting. The study, conducted with 500 Indian freelancers in their local languages, highlights that most Indian freelancers are under the age of 40 and are predominantly men.

 A gig economy is a work environment ( borderless and technology enabled) where organizations /businesses hire temporary workers or freelancers instead of full-time long-term employees. In the consulting/knowledge working context, the gig economy is often referred to as the open talent economy, a term largely attributed to Deloitte Consulting.
 Gig economy is at nascent stage in India and Asia.
 Web and ,mobile development, web-designing, internet research and data entry are the key focus areas for Indian freelancers while some of them are also engaged in accounting, graphic design and consulting. The study, conducted with 500 Indian freelancers in their local languages, highlights that most Indian freelancers are under the age of 40 and are predominantly men.

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Gig economy and india

  1. 1. GIG Economy and India Ref-News Paper and Slide Share By Col Mukteshwar Prasad(Retd)
  2. 2. Gig ,Sharing and Platform Economy  The “Gig Economy” is where independent workers contract for short term engagement  The “Sharing Economy” means generating money by sharing or renting assets  The “Platform Economy” is the use of IT system to facilitate /connect opportunities for gig/Sharing economy  20-30% of the workforce in developed markets is engaged in independent work (study by McKinsey )  The proportion of Americans workers engaged in “alternative work”, jumped from 10.7% to 15.8% from 2005 to 15(research by economists Lawrence Katz of Harvard University and Alan Krueger of Princeton University ).  “We find that 94% of net job growth in the past decade was in the alternative work category,” said Krueger.
  3. 3. Common Problem faced by Workers
  4. 4. Imperfectly Competitive Labour Market Monopsony Power of Employers
  5. 5. Imperfectly Competitive Labour Market Monopsony Employer- Wage Analysis
  6. 6. Imperfectly Competitive Labour Market Monopsony Employer- Wage Analysis
  7. 7. What is Gig Economy?  A gig economy is a work environment ( borderless and technology enabled) where organizations /businesses hire temporary workers or freelancers instead of full-time long-term employees.  In the consulting/knowledge working context, the gig economy is often referred to as the open talent economy, a term largely attributed to Deloitte Consulting.  Or  Fragmented Work where someone is given a work for certain amount of time  People provide a service nearly always through a digital platform  Companies provide temporary positions to workers and the latter reaches independent, short-term contracts with them.  So, instead of a regular wage, workers get paid for “gigs”.  The trend is very strong in advanced economies like the US where there is large volume of cases where firms engages in short term contracts with workers.
  8. 8. What is Gig Economy?  Even the terms – employer/employees cannot be used here as it indicates a rather long-term identity.  Well known Gig businesses include  Uber ,  Amazon ,  UberEATS ,  TaskRabbit,  Hermes and  Deliveroo
  9. 9. What promotes gig economy?  1.Emergence of the digital age.  Here, workforce is highly mobile and work can be done from anywhere, anytime.  This means that you need not reach at the location of the organization to do the job.  The distance indeed creates the distance in relationship as well.  2.Firms, in the era of disruption will be safe as it avoids long term obligations like pension and other emoluments, when they provide short term contract  The worker can be relieved at any time without any friction.  3.The short-term engagements better fit for the workers to search for the best.  4.Software and technological changes taking away human efforts also contributed to the gig economy.  Declining or uncertain financial conditions and necessity to cut workers at any time also promoted companies to go for short term contracts.  Temporary nature of projects and greater specializations etc., added to this trend.
  10. 10. What promotes gig economy?  5.Slow penetration of the millennial work culture into the labour market  Uncertain business climate and declining profits in the context of disruptive innovations also tempted companies to go for short-term labors.  In the US, colleges and universities recruit teachers and professors on contract basis.  But the typical example is the digital sector workers like the Uber workforce who are having a short term and flexible contract with the organization.  6. A highly connected, mobile workforce, and the emergence of the millennial generation that values a flexible work schedule so strongly that it would be willing to give up higher pay and promotions for it, is driving the change in rules of the employment game.  PwC’s “Workforce Of The Future Report”, the “desire for autonomy is strongest in China, especially among young people, indicating a generational shift in attitude towards greater freedom, entrepreneurship and specialist skills in this rapidly evolving economy”
  11. 11. Advantages  The trend of short term contract and the emergence of the gig economy have created competition and efficiency among workers, with the flip of uncertain Work Environment  Firms benefit from several angles.  Labour welfare emoluments like pension, gratuity etc., can be avoided.  Save training time and related expenses.  The future work situation will be that of the gig economy- business analysts predicts.
  12. 12. Benefits from Gig Economy
  13. 13. Downsides to the Gig Economy
  14. 14. Downsides  “Receiving payments in a timely, safe and secure manner is one of the key concerns of this community. At PayPal, we work closely with freelancers enabling them to leverage the opportunity in India and across the globe,” Subramanian said.
  15. 15. How the Gig economy works  Embracing the open-talent economy helps organizations blend full-time employees with short-term consultants, making them nimbler and more efficient.  Unlike traditional consultants—such professionals often get embedded in the organization, assimilate its ways of working and cost a third of what a “traditional” consultant might, while bringing a wealth of experience and specialist skill sets.  It is a win-win for both the company and the independent consultant.  There are, of course, some challenges.  For starters, how can companies and independent professionals be expected to find each other in an effective and efficient manner?  From the organization’s perspective, the challenges centre mainly on the reputation of the consultant, and whether that person can meet the expectations of the task.
  16. 16. How the Gig economy works  From the consultant’s perspective, the “model” works on networking, word-of-mouth references and 24x7 business development.  Some of the finest consultants (akin to other creative and knowledge workers) do not always make the best business developers.  Often, senior professionals who decide to branch out on their own for lifestyle or downturn-related reasons find it tough to find business without the comfort of a strong brand, resources and an organization behind them.  Besides, contracts are often skewed in favour of conglomerates, with little room for negotiation.  An organization’s ability to engage with talent on an on-demand basis could truly reshape the way businesses work.  However, this needs to be implemented with an open mindset and well-articulated expectations.
  17. 17. How the Gig economy works  For the model of on-demand talent creates an ecosystem that promotes super specialists who need clear direction and assimilation in the traditional organizational hierarchy.  (Ref -Ruchira Chaudhary article in HQ Asia)
  18. 18. Indian Scenario  India's gig economy, or the freelancing one, especially those who operate over the Internet, has taken off over the last three-five years.  Freelancing is at a nascent stage in India and therefore growing fast.  One in every four freelancers are from India.  The country dominates when it comes to software, with India contributing 50 per cent of the global freelancers in this domain, a new report from payments company PayPal said.  The survey, among 500 freelancers in India, reported that a majority of the freelancers are under 40 with a mean annual income of Rs 19,02,785.  About 23 per cent of the surveyed have an annual income in the range of Rs 40,00,001-Rs 45,00,000.  By one estimate, India could have up to 20 million ‘freelancers’ — individuals who use computers/internet to offer services in both domestic and export markets.  There is also an industry estimate of the Indian ‘freelancers’ market size growing to whopping $20-30 billion by 2025.  Most Indian freelancers are under the age of 40 and are predominantly men.  The Indian market has many freelancers/non-employees ready to engage in short-term projects—but these have been focused primarily on lower-value projects.
  19. 19. Indian Scenario  “India, for us, is more of a talent base than a client base,” says Vincent Casanova, a-connect’s client partner for Asia,  Casanova classifies India as a highly competitive market with a large number of independent consultants with strong English proficiency whose skills can be utilized in other Asian markets (mainly the Middle East and South-East Asia).  “This talent is available at low rates by regional standards, which makes it attractive and affordable,” says Casanova.  “At the same time, it is important to note that the growing trend in most Asian markets—with the exception of the Middle East, Singapore and Hong Kong—is the high demand for consultants with strong local knowledge, network and language skills. This could potentially curtail the use and exportability of Indian independents,” he adds.  There are several reasons to celebrate the gig economy in India but there are practical challenges too: the traditional mindset, lack of networking platforms, a large variance in billing rates and a feeling of isolation.(Sumer Datta and Sanjay Lakhotia, the co-founders of Noble House)
  20. 20. Indian Scenario  Most Indians have taken to freelancing after having heard about it from  Friends,  Family,  Social media and  Freelancing platforms  The top jobs include  Web/mobile development,  Web design,  Data entry and  Internet research.  Some of them are also engaged in high end skills  Accounting,  Graphic design and  Consulting.  Marketing,  Human resources  Finance
  21. 21. Indian Scenario  Australia, the UK, and the U.S. generate a chunky part of their international income.  A significant 41 per cent of Indian freelancers witnessed growth in last 12 months  Expect to be doing lot more ‘freelancing’ work in the future  74 per cent of the Indian freelancers surveyed had a PayPal account. The rest were mainly using bank transfers for payments.  The report does not mention the relation between the lesser number of technology jobs available now and the choice of freelancing  Most Indian IT services companies have slowed down hiring or are in the middle of manpower rationalisation because of the impact of automation and a slowdown in growth.  Start-ups, after a span of irrational exuberance, are hiring conservatively as well.
  22. 22. Indian Scenario-Challenges  About 61 per cent of the respondents said they faced issues in getting paid, both from international and domestic customers.  Many of them receive payments only after two-four weeks of invoicing.  Gig workers often have to deal with  Tough customers,  A very competitive industry and  Isolation(About 17 per cent of those surveyed said they feel isolated when working.)  So why do the young choose freelancing over regular employment?  Survey indicates that  "being my own boss",  Flexible Scedule  The freedom to pick work they like, and  The possibility of earning more is making freelancing an attractive option.  “Our Future Of Work survey tells us that Indian knowledge professionals are increasingly opting for independent gigs as a matter of choice and are seeking flexibility and purpose in their career,” says Chandrika Pasricha,

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