In end-1997, the magazine Fast Company carried an article with an intriguing title, Free Agent Nation. By 2001, Daniel Pink expanded this into a full-fledged book which became a bestseller. His bold prediction about the death of organisations as we know them, and, the rise of a class of people who work as independent agents because they value their freedom and work-life balance, struck sympathetic chords with many people tied down to a 9 to 5 routine. Much has been written since then about the rise of the gig economy and how, millennials, in particular, are loath to become organisation men. Apparently, they would much prefer the freedom that comes from living from assignment to assignment, presumably with adventurous vacations in between. When something looks too good to be true, it probably is! Careful managers often like to keep an eye on global trends in areas related to their responsibility. This helps them plan towards maximising benefits or minimising impact, depending on the nature of the change. At times, however, it can become difficult to disentangle hype from reality. The emergence of the gig economy is one such trend.
Gig economy and its implications
The gig economy means different things to different people. To some, it means that companies will be increasingly parcelling out well-defined work to people on limited term contracts, instead of taking them on their rolls as employees. This may have a germ of truth. After the recent recession, most companies have been looking carefully at all costs and pruning them where possible. A full-time employee is a long-term cost commitment that increases year on year. On the other hand, a short-term contract comes with administrative overheads, a risk of loss of knowledge of the job, and, potential disruption of continuity. Some managers may find that the benefits exceed the costs of this arrangement for certain kind of jobs. Some jobs have always been amenable to being parcelled out to independent freelancers. Recent developments in IT have made it possible to parcel out other kinds of jobs as well. Uber is an example of a business that has used IT to create a vast and valued business without employees. A recent piece by Ruchira Chaudhary in Mint estimates that 20-30% of all jobs in developed economies go to independent workers, and, that in the US this category has accounted for most of the net job addition in the last decade.
To others, the gig economy stands for the assertion of freedom by people who do not want to be tied down to a fixed role in any one organisation, and, especially not to a rigid work schedule in a single workplace. There has been a lot of talk in the business press about the rise of such a flavour of the gig economy. Last year, the Indian head of a large global job site told the Hindu Business Line that Indian workers are increasingly willing to sacrifice the benefits of a regular job, like gratuity and health insurance, in return for flexibility.
Before managers rush off to make their plans for re-examining existing job descriptions, and, making better use of millennial aspirations, it is sobering to note some facts. Under 3% of job postings by companies in India relate to the gig category. The paucity of jobs is so extreme that one has become desensitised by the vast number of applications for any kind of jobs advertised openly. For instance, the Indian Railways received around 28 Million applications for the 90,000-odd jobs that they advertised earlier this year. Three years ago, 2.3 million applications, including those holding PhDs, were received for 368 posts of peons advertised by the UP government. It is hard to believe that the hunger for regular jobs is in any kind of decline.
Even in the US, a survey by DeVry University in 2016, revealed that almost all millennials wanted a regular job, and, they were not even fussy about perks, leave alone flexible hours. The killer punch to the gig economy came in the second week of June this year, when the US Bureau of Labor Statistics released its in-depth report on alternative work arrangements. Between 2005 and now, the percentage of the US workforce in what could be called the gig economy, has actually fallen by a percentage point. Apparently, economic growth and fall in unemployment numbers raises the bargaining power of workers, who now get what they always wanted, namely a regular job. As can be expected, bitter wrangling has begun on how better classification of survey categories might prove what many people would like to believe viz. the rise of free agents!
An unequal bargaining
Companies often like to use temps or contractors to save costs. It is cruel to say that those people actually like their job arrangements. The gig economy is another name for unequal bargaining power in the labour market. There may well be some individuals who genuinely want to be free, but they do not define a broad trend. That said, it is true that many professionals at some time in their career may have to operate as free agents. This is increasingly true of senior professionals in certain sectors; given bankruptcies, mergers, acquisitions and downsizing. How can they make the most of their new state? In a recent article in the HBR, Prof. G. Petriglieri of INSEAD has summarized the results of his in-depth study of a set of professionals to distil four key things that free agents do to become productive. Firstly, they absolutely fix a place to work in, even if it is a corner table at home. Secondly, they establish strict routines. These could include rigid timings or other protocols. For instance, one writer leaves her last sentence unfinished at the end of work every day. The next day, when she starts work, not much thinking is required as she simply completes the sentence and that sets the writing flow in place. Thirdly, they ensure that the work they take up connects to some central purpose in their life. It is difficult to sustain energy and enthusiasm if one takes up any and all kind of work that may be offered. Fourthly, they make a list of key people who they can connect with from time to time to frankly share experiences and gather encouragements and advice. It is interesting that the practices that make free agents more productive include some that make their work conditions more like a regular organisational job. All HR managers will have to deal with those pushed into the gig economy. They must prepare to be compassionate and to help those people perform better. Of course, managers must prepare to be productive as free agents themselves.
- “Free Agent Nation;” Daniel H. Pink; Fast Company: Dec 31, 1997
- “Is India ready to embrace the gig economy?;” Ruchira Chaudhary; Mint; Feb 2018
- “Indian labour market seeing a shift…’; Hindu BusinessLine; Nov 2017
- “Study: 91% of millennials say they want a full-time job…”; Valerie Bolden-Barett; HRDive; Nov 22, 2016
- “Maybe the gig economy is not reshaping work after all..”; Ben Casselman; New York Times; June 7, 2018
- “Thriving In The Gig Economy”; G. Petriglieri et al; Harvard Business Review; March-April 2018
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