NASSCOM REPORT- FUTURE OF WORKFORCE: DECODING GIG WORKFORCE 2.0
Bangalore, November 03, 2022: The dynamic business landscape and evolving operating models have ushered in an opportunity for the gig economy to become a key talent management strategy for enterprises. To highlight the rapidly evolving gig workforce landscape in the technology sector, The National Association of Software and Services Companies (NASSCOM) and Indeed in partnership with AON have today released their study, titled “Future of Workforce: Decoding Gig Workforce 2.0”. The report aims to understand the prevalence of the gig workforce landscape in the Indian technology sector, its current and future trends as well as its role in addressing the tech talent demand and supply gap for the tech industry.
The gig economy over the last two years has evolved significantly. Focus on specialized skills requirement, employee demand elasticity and cost optimization are enabling organizations to embed gig for technology roles which traditionally were restricted to HR and support functions. Notably, Software Development, UI/UX Design, and Data Analytics have emerged as the top three in-demand giggable skills within the technology sector.
State of Gig Workforce in India
Talent continues to remain a key advantage for the Indian tech Industry. Globally, India has the 2nd largest annual supply of STEM graduates, 4x-4.5x higher than the USA, and is also a leader in terms of women diversity among STEM Graduates at 47.1%. Though the accelerated demand for digital transformation has intensified the talent crunch globally, the gig workforce has emerged as an important talent management strategy for organizations and can play a key role in closing the tech talent demand-supply gap. Notably, India has the lowest tech talent gap among top tech locations such as USA, China, UK. Strategies such as increased hiring of sub-contractors and external gig workforce especially for niche digital technologies and offering internal Gig platforms for better utilization of existing employees, amongst others, continue to support organizations in closing the gap faster.
As per the NASSCOM, Indeed and AON survey of over 70 organizations, nearly 2/3rd (65% of the surveyed organizations) of them are employing gig workers as of 2022, a higher share compared to 57% of the organizations in the year 2020. While the share of organizations employing Gig Workers has increased, their proportion remains less than 5% of the total workforce (For companies with more than 2000 FTEs). However, for smaller organizations with less than 2000 full-time employees (FTEs), gig worker proportion is more than 5%. Notably, none of the organizations have mentioned a decline in gig hiring. In about 15% of the surveyed organizations, the proportion of gig workers in the past two years has increased by more than 30%, proving the efficacy of the model.
Further, before the pandemic, gig workers were mostly hired for projects with a duration of up to 9 months, however, the duration of projects being offered to gig workers has increased significantly, post-pandemic. 25% of the surveyed organizations are open to hiring gig workers for projects with a duration of more than 12 months, thus indicating the growing demand for talent and their effective use to meet short-term talent needs.
In terms of compensation, a proven capability in the areas of expertise, qualifications and relevant years of experience are some of the top factors being considered by organizations while determining compensation for gig workers. Over 40% of the surveyed organizations decide on a Fixed Fee at the initiation of a Gig Contract. As many as 53% of the surveyed organizations have policies to absorb Gig Workers as full-time employees. Moreover, over 90% of the surveyed organizations remain open to re-hiring gig workers in the same or adjacent areas of work based on past performance evaluation.
Gig Workforce Creating Business & Social Impact
While the pandemic-induced remote work aided in recognizing the efficiency and specialized skills of gig workers, this shift also enabled increased efficiency in the completion of tasks, reduced time for hiring for new roles, and engaging with a more diverse workforce which includes retired professionals as well as women returning to the workforce.
Debjani Ghosh, President, NASSCOM said, “The future workforce will indeed be a blended model wherein the Gig economy is expected to play an important role not only as a talent management strategy but also accelerate job creation and boost the country’s economic growth. As we navigate the new world order, multiple models will co-exist with trust and transparency at the core of it.”
The Future of Gig in the Indian Tech Industry looks promising
However, ensuring the quality of Gig Workers, hurdles in security checks & verification, lack of structured policies, and clarity on regulations or guidelines for Gig Workers are some of the key concern areas amongst organizations.
Sashi Kumar, Head of Sales, Indeed India said, “We are excited to partner with Nasscom and are grateful for joining our mission of helping people get jobs. I am confident our joint report will impact and empower the labour market.
Companies investing in gig work platforms and processes speak volumes about how critical talent is for enabling their next level of growth, especially now, given the global uncertainties. The report also indicates this positive growth, with 46% of organizations surveyed planning to increase the proportion of gig workers from current levels. Businesses that place gig workers at the core of their business strategies will continue to thrive in 2023 and beyond.”
Implementing a successful gig workforce model will require a concentrated focus on- People, Policy, Process, and Practice. This includes building structured industry policies for Gig workers, use of technology to solve security concerns and nurturing an inclusive culture that focuses on the amalgamation of both full-time and gig employees. Moreover, Gig workers will also need to invest in continuous upskilling and ensure that they are bringing the best skills to the table and at the same time build a relationship of mutual trust and partnership by following the highest standards of business ethics and data security.