Impact of the Gig Economy on the IT Sector
In 2019, Mastercard published a survey highlighting that the global gig economy generates about $204 billion in gross volume. It’s been 4 years since the study was published, and since then, organizations and industries have transformed.
The gig economy is rapidly growing as talent and organizations develop new ways to work together. We see higher flexibility in workflows, higher independence, and much more. In fact, the IT sector is one of the most prominent industries where the gig economy continues to grow. But how exactly has the gig economy impacted the IT industry, and what does the future look like? Well, let us dive right in and find out.
Rise of the Gig Economy in IT
The gig economy in any field, including IT, can be seen from two perspectives:
- Talent or employees
Why Companies Choose Gig Workers
When the world stood still due to COVID-19, companies had to transform how they functioned. They realized that workflows needed flexibility and technology needed to be enhanced for people to remain productive no matter where they were. As a result, organizations started employing gig workers with flexible contracts such that they could work from anywhere and also were paid only when their services were required.
Post the lockdown, companies wanted to retain their flexibility to a large degree as it reduced their costs, including that of infrastructure, maintenance, and hiring full-time employees. As a result, they started adapting to a hybrid model. A part of the workforce functioned as full-time employees who could work in the office or from home. A part of the workforce was only remote workers who were employed on a contractual basis.
When we look at this through the lens of IT, the workforce which offered crucial always-on services was kept full-time, whereas the workforce which completed one-time jobs or worked at regular intervals was hired as flexible employees or gig workers. However, this is merely the organizational perspective.
Why Talent Shifted Towards Gig Employment
In the current times, work satisfaction and self-actualization are big drivers for millennials and Gen Z. This means that being tied to one company won’t suffice their yearning to explore, work with different things, and grow. As a result, the employees chose to pursue work independently.
Another important reason is that talent could work on their own terms. Due to the remote work scenario during COVID, talent realized that they could be gig workers who could work the way they want, in an environment conducive to them, and earn in the way that works best for them.
Above and beyond this, independence also allows them to balance their personal and professional lives. With traditional employment, talent started feeling burn-outs and wanted to shift to the gig economy, where they could prioritize their work and social life in the way they wanted.
Overall, these are the primary reasons why the gig economy is expanding at such a rapid rate. Both employers and gig workers find flexibility beneficial in their own ways. This is precisely why the meaning of employment will transform in the near future. Let us understand how.
How the Gig Economy will Transform the Future
- Companies will likely become far more flexible and agile. They would adapt and shape their workflows to acquire maximum productivity from full-time and gig workers.
- The meaning of full-time employment will likely change as gig workers who take on multiple independent projects will be known to work full-time. This is irrespective of the field in which they work.
- Organizations will work with talent globally through different models, which include outsourcing, offshoring, and more.
- Traditional investment in hiring, training, and maintaining talent will decrease significantly.
- People would start investing more in contract and gig workers.
India: Pioneer of the Gig Economy in IT
According to the Economic Survey 2020-2021, India has emerged as one of the world’s largest countries for flexible staffing. Flexible staffing includes gig work and platform work. It is also emerging as an important market for software development and other technology-oriented projects.
According to another report, India has the second largest number of freelancers after the Philippines. As a result, organizations worldwide will work with talent in India extensively across different departments in IT, and India will likely be the driver of the gig economy in the global IT sector.