Uberisation of workforce: the way forward?

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With millennials entering the scene, gig economy is being embraced by companies, small and big.

With digitisation making inroads in every sector, and millennials demanding work-life balance like never before, companies are increasingly embracing the concept of gig economy, where skill is hired purely on the basis of demand. HR Katha catches up on the trend of the gig economy— the fancier word for ‘uberisation’.

Change is the only constant in the workforce, but of late, this change has picked rapid pace considering the digitisation of processes and the changing mindset of the workforce. Uberisation of the workplace is the new reality— a trend which makes it possible for companies to cut costs, hire talent on demand, customise the workforce according to the projects and build a highly motivated team. On the other hand, the employees, who are basically contractual, consultants and freelancers, get to select projects they want to work on and on the terms they desire.

With digitisation happening across sectors, the way companies traditionally function is fast changing. The work environment as we have seen, is evolving at a fast pace to keep up with the changing times and mindsets. The digital presence has accelerated flexible, project-based employment. In other words, uberisation of the workplace is taking place.

Mrinal Krant

Globally, we all know that 50 per cent of the Google workforce in the US comprises TVC (temporary/vendor/contract) employees, and they carry different coloured badges to work. In India, however, while it is time to adopt the same, TVC work is more of a stigma. 

This ‘talent-on-demand’ trend will pose newer challenges for HR processes. Unlike permanent employees who are more connected with the ethos and goals of the company, HR will now have to deal with a set of employees who are not emotionally attached to the company, but are seeking newer and greener pastures. According to a senior HR expert, another critical challenge will be to create harmony between permanent employees and contractual employees. Any company eager to leverage the benefits of uberisation will have to ensure that in no way are the non-permanent employees separated or isolated from the permanent ones. Also, the culture has to be inclusive because even though the hiring patterns for both sets of employees will differ, they will be working towards the common goals of the company,” affirms the expert.

Uberisation, which was first popularised by cab-aggregator Uber, is now a workplace revolution. Companies, such as Spotify, Amazon, Netflix and Airbnb are all leveraging uberisation. According to various estimates, in the US alone, six crore of the workforce will function on a freelance basis in the next four years! Till 2015, this figure was 1.5 crore or 29 per cent of the entire workforce in the US.

Any company eager to leverage the benefits of uberisation will have to ensure that in no way are the non-permanent employees separated or isolated from the permanent ones. Also, the culture has to be inclusive because even though the hiring patterns for both sets of employees will differ, they will be working towards the common goals of the company.

However, some believe that except for startups that use uberisation effectively—be it in the IT product building or fashion designing, accessorising and other sectors— the concept is still to scratch the top surface. There is a long way to go before contract/ temporary holders can do the mainstream job.

According to Mrinal Krant, director human resources at Just Energy India, “Globally, we all know that 50 per cent of the Google workforce in the US comprises TVC (temporary/vendor/contract) employees, and they carry different coloured badges to work. In India, however, while it is time to adopt the same, TVC work is more of a stigma.”

This ‘talent-on-demand’ trend will pose newer challenges for HR processes. It will now have to deal with a set of employees who are not emotionally attached to the company, but are seeking newer and greener pastures. 

In addition, legal and statutory framework in India does not support TVC beyond a point and TVCs would largely be missing statutory benefits of PF, ESI, and so on, or protection under the Shops and Establishments Act, Factories Act, Payment of Wages Act, and so on.” Due to uberisation, the workforce would also lose out on employer-paid health and life insurance cover.

However, “Sectors, such as the fashion industry, in a startup mode, are using these freelancers effectively to drive home cost advantage — guilt-free heavy dollops of quality design and product development. The same holds true for IT product or services startups. Cost is the key driver triggering this concept in our country. Since a freelance ecosystem is in its infancy, it is extremely affordable today. Startups and angel investors are digging a gold mine through this gig economy right now,” concludes Krant.

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