With the only priority now being to increase the revenues, the thought of looking at gig workers is the growing trend.
Recent data released by the Centre for Monitoring Indian Economy (CMIE) stated that India’s unemployment rate stands at 6.9 per cent in February 2021. Though the numbers are climbing gradually but the overall scenario looks tough. In a post-pandemic world, change is the only constant as it’s the ‘survival of the fittest’ for most companies. Current times call for companies to be innovative and forward thinking, the hospitality industry is no different. Being majorly affected by the pandemic, the industry globally is barely reviving back with a glim ray of hope amidst the so-called ‘second wave’. The only priority now being to increase the revenues and get back on the growth track. In such situations, where work from home is still the norm, the thought of looking at gig or rather (freelance) workers is the growing trend. So, the question that arises is what is a gig economy?
As per reports, the gig economy provides employers with dependable workers when needed and subsequently, provides workers with greater control of their work schedule which translates into higher rates of job satisfaction and better services for the employers. Elaborating further Dominic Costabir, Director, HTI India, explains, “The gig economy is a free market system; companies hire independent freelancers (called giggers or gig workers) and pay per hour or per assignment. This concept has gained currency due to the internet boom and app-based aggregators. In India, traditionally, this segment was largely unorganised and operated in a quasi-legal manner such as part-time house help, or even some factories paid workers per piece or unit produced. Now, due to aggregators like Ola, Uber, Swiggy, Zomato, Urban Company and Colaborate app, the organised segment is growing exponentially.” Sharing a similar view, Rohan Deshpande, Assistant Program Manager, Zomato, says, “This is not a new concept as the gig economy in India was an already existing space even before the term gained popularity. Today, India constitutes about 40 per cent of the freelance jobs offered globally, with 15 million skilled professionals fuelling the ever-so-increasing demand for contract-based jobs or the freelance industry. The accent of digitisation certainly helped with the boom of the gig economy in the country.”
THE NUMBER GAME
With a growing relevance of the concept, the truth is in the number pie. According to Costabir, “We, at Colaborate ran a survey which showed that 97 per cent of people were open to gig work. While further industry reports state that the gig economy is expected to grow globally by an impressive 17.4 per cent CAGR by 2023. And finally, gig workers will outnumber traditional workers in the next 10 years. The main motivation for 70 per cent of giggers polled by FlexJobs and FreshBooks state that desire for work-life balance is of prime relevance. A Forbes report says that nearly 60 per cent giggers find their working conditions flexible compared to just 27 per cent of regular workers. Other factors for considering gig work is the flexibility to choose when to work, be their own boss, choose suitable projects and finally, reducing commute (time and money) and avoiding office politics.”
A report by Mastercard states that internationally, the gig economy is trending. An estimated 36 per cent of US workers are giggers and 33 per cent of companies extensively use gig workers. Payoneer states that gigs are more popular with age groups of 18-24 and 55-64.
Explaining further Deshpande states, “The pandemic has changed the way businesses are conducted, not only in India but globally too. Due to forced remote work culture, many companies are realising the advantage on stressed cash flow, remodelling their operations as per business continuity plans, and opting to hire freelance talent under the given market scenario. As more and more companies move away from a traditional Monday to Friday, 9 to 5 weekdays, the scope is tremendous. As more and more companies undertake business transformation to make their processes more technologically driven, the number of gig workers ought to go up significantly.”
THE INDIA POTENTIAL
The pandemic has changed the way businesses function. The forced work from home concept shed light on the fact that organisations could function with employees working remotely and the advanced technologies make everything possible. Sharing his overall perspective of the concept in Indian hospitality, Himmat Anand, Founder, Tree of Life Resorts, says, “By nature, the hospitality industry is hugely cyclic in nature. The leisure segment is dependent on seasonality, holiday breaks, school exams and the like. The corporate segment is dependent on its own peculiarities of weekday/ weekend travel, access to the city centre or work place and the like. Keeping these in mind, the gig concept is something which the industry has been toying with for long. The pandemic has only put it in fast forward mode, given the huge pressures on the bottom line. On the flip side, the gig concept requires constant training and re-training, something which the large branded chains have still to come to terms with, given their strict and elaborate SOPs. Smaller, independently owned hotels are able to adapt and adjust more easily. Further, many of these hotels are away from cities, in rural areas, employing a lot of staff from their local surroundings. This makes it easier for them to pull such staff in and out, without the fear of losing them longterm to competition.”
Being very strongly involved in the gig concept, Costabir explains his point of view saying, “It will change the way the hospitality industry functions. In a nutshell, the entire industry will operate the way currently banquets, outdoor catering and events teams function. We will be fast and flexible, expand and contract on demand. No longer will we be restricted by human assets that are on the payroll. We will import talent on demand. There will be a greater emphasis on technology supported /enabled processes and systems. Training and orientation programmes will be quick and efficient. In short, teams will be assembled and dismantled based on demand and supply.”
Adding on to the optimism and positive prospects of the concept, Deshpande adds, “The gig economy has massive potential in the hospitality industry as it’s one industry that has the highest attrition rates at 73.8 percent. There is always a need for employees as schedules are erratic and work weeks can be longer and more strenuous compared to other industries. The gig workers may just help fill in that void. A gig worker can solve for the high influx during seasonal demands like ‘wedding seasons’, ‘corporate retreats’ among the many others. Technology will play a big part in this with apps and websites popping up which can directly connect the two without need for intermediaries and negotiations. Syft and Rota are some examples of apps from the US which have started this change already. Rota claims to have reduced staffing costs by 25 per cent for companies amongst the two million scheduled assignments. This is huge and India will benefit from such technology.”
With any new change, the obvious question arising would be the advantages of the concept to the industry. The current hospitality players are looking for best opportunities to increase revenue and the gig concept does exactly that.
As Costabir asserts, “For businesses, it keeps them lean, agile and offers long-term sustainability. For guests (customers), it is competitively priced standardized products and services. The biggest advantage, when strategised well, is for giggers who comprise retired professionals, students, stay-at-home-moms and outof- work professionals. Additionally, giggers get a lot of freedom and flexibility in terms of the company to work for, hours or days on duty, and location to work at. They can get maximum exposure and experience in shorter time across a particular industry, and even allow for migration to other verticals or industries – even simultaneously.”
Sharing a more detailed point of view Deshpande says, “This concept has a multitude of advantages both for giggers and employers. Gig workers have the comfort to choose days/hours with without any restrictions, they can choose what kind of projects they want to take up based on their schedules, they have the ability to choose how much value they add on and hence demand the pay they think is viable for the time and effort. And finally, gig workers are not obliged to work for anyone and hence if they find creative or other differences with the employer, they are free to move to another place without hassle. From an employer’s perspective, they get access to highly specialised workforce who excel in their field of work. This brings more finesse to a project. They don’t have to spend money on a lot of ancillary costs like training, paid leaves, cost of space etc. More importantly, they can hire for a short time during seasonal demands to meet deadlines without going through the extensive recruitment process and permanent payroll costs.”
The adoption of any new concept always comes with a bit of scepticism especially when one cannot gauge the benefits. However, an open mind is always necessary for growth. As Costabir states, “The biggest challenge for any company considering the gig concept is their mindset – by nature, we are resistant to change and experimenting. Hospitality industry professionals too lean towards playing safe. But the industry has witnessed and adapted to tectonic shifts like Airbnb, Oyo Rooms, Zomato, Swiggy and the likes. So, hospitality has proved that it is quick to adopt change – once it happens. This time, the situation (pandemic) has forced all of us to wake up and not just adapt to changes, but initiate them too.”
Sharing a very clear and structured perspective Deshpande outlines the challenges stating, “Irregular income is a prime concern and gig workers’ financial planning needs to be very strong if they want to do this full-time. There are no benefits likes paid leave or insurance etc. Also, gig workers may feel stressed while working on a project due to higher expectations from them since they’ve been hired for a specialized task. However, for employers, the flip side is the fact that workers may not be that invested as gig workers are ‘casual workers’ and not full-time workers. There is also the pressure of drafting contractual agreements for every gig worker hired.”
THE WAY AHEAD
The growing prominence of the gig economy is here to stay.The question that arises is how well is this concept going to be milked by the hospitality industry? As Costabir concludes, new apps that connect gig workers and organisations and are popular in the West will gain prominence. This is mainly due to the rating system and transparency, giggers will see themselves as brands – accountable and dependable. Experience exceeding five years will seize to be relevant; the maxim: “You are as good as your last gig” will gain prominence. Organisations too will be rated in real time and would need to earn gigger-friendly tags to attract better talent. They would need to pay on time, display professionalism and stick to commitments. We may debate on merits / demerits of the gig economy, but it is here to stay The gig culture will initially eat into permanent and contractual employment share, but finally will coexist and not replace them.”
DOMINIC COSTABIR Director HTI India
“The gig economy is expected to grow globally by an impressive 17.4 per cent CAGR by 2023. Gig workers will outnumber traditional workers in the next 10 years”
ROHAN DESHPANDE Assistant Program Manager Zomato
“India constitutes about 40% of the freelance jobs offered globally, with 15 million skilled professionals fuelling the everso- increasing demand for contract-based jobs”
HIMMAT ANAND Founder Tree of Life Resort
“The gig concept is something which the industry has been toying with for long. The pandemic has only put it in fast forward mode, given the huge pressures on the bottom line”