Amidst the talks of recession and economic slow-down, and many initiatives declared by Finance Minister to counter the down-turn, a piece of important news got suppressed to a great extent. The new draft Code on Social Security addresses the gig workers and announces a slew of measures to help those professionals ensure a secure financial future as the gig economy gains traction.
It is quite apparent that workplaces across the world are going through a transformation. This transformation is the result of many changes, including technical, political, social, and economical. As businesses face new challenges, they are evolving new strategies to rise to those challenges. The shift towards a more contingent workforce is one significant measure. The Oxford Economics Workforce 2020 Report found that over 83% of responding executives said that they plan to increase the use of contingent, intermittent, or consultant employees in the next three years.
In India, the freelancing community is growing at a swift pace. By the end of 2018, estimates show that one out of four freelancers in the world is from India. By 2025, the freelancing market in India is set to grow to $20-30 billion. The trend of rising freelancing work is not limited to the low-end, cheap gigs. A lot of experienced, successful professionals, even in their 40s, are shifting to freelancing profiles. I know a person whose LinkedIn profile read “CEO As A Service.” India saw a 52% increase in the number of freelancers as compared to Q2 2018. There was also a 29% year on year freelancing revenue growth, according to The Global Gig Economy Index. The report is considering earlier government programs like Startup India, Skill India, and Digital India as important factors behind these increases. On a lighter note, the year on year income growth is the only area where India seems to be behind Pakistan, where the revenue growth was 47%.
So far, the freelancing has been an unorganized sector. The talent marketplaces were defining the rules of the game. Upwork’s action of suspending accounts if the freelancers couldn’t get the jobs quickly is a prime example of this. Then there is also the question of bad clients who don’t pay and the fees charged by the marketplaces. Of course, there are issues from the freelancer side too, but that might a topic for another day.
The real challenge though is the ambiguity of work and difficulties it produces in financial planning. Keeping up a steady flow of projects and income is difficult as it is. The uncertainty poses a challenge is about securing the future. Since it is the unorganized sector, it’s tough to get loans and insurance policies, and the future security that we all crave for. From the growth projections of the gig economy, it is clear that the number of people adopting a freelancing work style is going to increase manifold. The benefits that the proposed changes bring to them are welcome. Hopefully, the entire eco-system matures enough to create the win-win situation that clients and freelancers both desire.
