Business Anti-Biotic for Covid-19 – Chapter 5 Maneuvering “Gig Economy” to rebuild the Srilankan Industries
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Chathura Ganegoda (BSc (USJP), MCIM (UK), MBA(UOC))
Like the Black Death spreading along the trade-routes the spine of 14th-Century Eurasia, Covid-19 emerged in China and spread extremely quickly along the modern-day Silk Roads: intercontinental flight paths.
Global health experts predict that COVID-19 will be like the seasonal flu: it will re-emerge annually in seasons and the virus will evolve sufficiently fast that people will not be able to develop long-lasting immunity. And it argues that the development of a vaccine is likely to take 12 to 18 months, with further time required to scale up dose production and administer the vaccine.
This clearly emphasizes that as a developing country which is suffocating with debt traps, we Sri Lankans need to find innovative ways to keep our nose above the waters and get the economy going. As a miracle island, nothing is impossible to execute on this land if necessary effort is put. Solution is the need, to adopt to different business models.
In a VUCA (volatility, uncertainty, complexity, and ambiguity) environment where not a single job is certain, neither organizations stretch their human capital nor potential talent can depend only on one employer, therefore a different business model is needed to facilitate both requirements. One of the solutions which is practiced globally is “Gig Economy”.
Figure 1 https://hbr.org/resources
What is “Gig Economy”?
The gig economy is made up of three main components:
- The independent workers paid by the gig (i.e., a task or a project) as oppose to those workers who receive a salary or hourly wage;
- The consumers who need a specific service, for example, a ride to their next destination, or a particular item delivered;
- The companies that connect the worker to the consumer in a direct manner, including app-based technology platforms.
Companies such as Uber, Airbnb, Instacart etc. act as the medium through which the worker is connected to – and ultimately paid by – the consumer. These companies make it easier for workers to find a quick, temporary job (i.e., a gig), which can include any kind of work, from a musical performance to fixing a leaky faucet. One of the main differences between a gig and traditional work arrangements, however, is that a gig is a temporary work engagement, and the worker is paid only for that specific job.
Who is Part of the New Gig Economy?
1. TECHNOLOGY PLATFORM COMPANIES
- Technology platform companies have been a major force in the expansion of the gig economy. Included in this category are companies such as Uber, Airbnb, Instacart and other tech platforms
- These platform companies have a few distinct commonalities:
1. Facilitate direct transactions between consumer and producer.
2. Flexible work schedules for gig workers.
3. Online payments, from which platforms take a cut.
4. Online profiles and reviews of both producers and consumers.
2. GIG WORKERS
- Gig works can be classified into two broad categories:
1. Labor providers
- For example – drivers, handymen, delivery men
- Lower-income and less-educated workers who rely on gig work for their entire livelihood, often because they have trouble finding other job options.
2. Goods providers
- For example – artists, craftsmen, clothing retailers
- Higher-income and more-educated workers who do not depend on their gig work income, often because they have another full-time job; their gig work generally provides supplemental income.
3. CONSUMERS
Source: Presentation by Ms. Molly Turner at “The Gig Economy: The Rise of the Freelance Workforce” at NACo’s 2017 Annual Conference & Exposition in Franklin County, Ohio, July 2017
Advantages and Disadvantages of Gig Economy for the Gig Worker
Advantages
Flexibility
Many freelance workers in the gig economy find that their status allows them great flexibility. From working the hours, they desire, to working where they want, there are many options for gig economy workers. Often a task will be given to a worker with an end date, and how and when they accomplish that task is up to them.
Workers are often given the flexibility to work from a remote office or from home. This is often attractive to people who are trying to work around family schedules.
Pay
Pay for freelance workers is variable from company to company. Some companies pay gig workers less, while many pay their workers more because they are not having to pay benefits in addition to salary. Often, they can charge hourly rates for their time. This means they can control their work hours and get paid for extra hours on the clock.
Things like meetings and phone calls in addition to regular work are billable. Obtaining higher education while working in a gig economy job is possible because both are extremely flexible.
A variety of jobs
Gig economy workers may find they have a wide variety of jobs to complete. Instead of similar, monotonous tasks to be done each day, each project or gig may be filled with different elements that make the work interesting. Workers may then find that they are more excited about projects and able to be more creative with their work because it varies each day.
Greater independence
Many contract or gig economy workers find that they are given independence to complete their work. Not being in an office may aid this independence. With nobody to look over shoulders, gig economy workers may find they are given a task and then mostly left alone to complete it. This can be a great boost of confidence and give workers the ability to complete a job the way they believe it will be best done—on their timetable and in their way.
Advantages and Disadvantages of Gig Economy for the Employer
Disadvantages
No Fringe
Unfortunately, for most gig economy jobs, benefits are not part of the package. Because you are not a full-time employee of the organization, the laws regarding the benefits the company needs to give you are different. Some businesses will offer benefits to longer-term contractors, but this is rare.
They need to plan retirement and budget how much of a paycheck to put towards that each month.
Isolation, lack of Cultural Solidarity
Some workers may find the remote, removed life of the gig economy a problem. Often freelance workers do not go into the office and miss on the social elements present there. From parties to regular watercooler talks, gig economy workers may find they spend their day alone, working from home or from a remote site. While this adds flexibility, it can also cause isolation from the other workers and the feeling of being removed or left out.
More Stress
Gig economy workers must regularly be working to find their next gig or be prepared for changes in their current one. This can lead to stress, as most people appreciate feeling secure and steady in their employment. Gig economy workers sometimes face unexpected changes in their jobs, from being let go, to a change in their salary. There is also stress in being removed from other employees and if there are questions or issues with a project, that can be difficult to communicate.
Advantages and Disadvantages of Gig Economy for the Employer
Advantages
Lower cost
Because companies do not have to pay for benefits or the onboarding costs of a full-time, new employee, freelance workers often have a lower cost than other workers. Employers can pay a salary and sometimes do not even have to provide work equipment for gig economy workers. This allows them to cut costs and just pay for the actual labor that a freelancer gives.
Ability to scale quickly
Many smaller or startup companies find freelance workers allow them to quickly scale their company. Without the need to provide office space, equipment, and benefits, small companies simply need to find people who have their own computer and can do the work.
These workers can be found fast and with little marketing, sometimes through word of mouth. Then companies can meet goals and demands of their market while keeping their costs low. They can save time and money setting up healthcare or HR programs and can simply hire workers to do simple projects that need to be done at the time.
Diverse Pool of flexible workers
Utilizing gig economy workers allows businesses to have a diverse pool of flexible workers at their disposal. These workers often work different hours from normal business hours, so needing something done late at night or early in the morning is less difficult.
Workers are also often willing to do some weekend work, since they can do it from home, giving businesses options and flexibility. Gig economy workers are often various ages and skill levels, and businesses can utilize workers for different projects based on their skills. The often-varying backgrounds gig economy workers bring to the table can allow for more creativity and ideas for the company.
Disadvantages
Less reliable workers
Sometimes, gig economy workers are looking for remote jobs because they aren’t willing to work as hard. This is unfortunate for businesses, and they should be thorough in setting up expectations and in selecting freelance workers to ensure they will have a reliable employee.
However, growth of the gig economy could also incentivize small and medium-sized businesses to market harder and smarter. Many of these enterprises in developing countries like Sri Lanka have no digital marketing strategy whatsoever, and gig economy platforms could work as an unexpected but savvy marketing approach, for example Pickme, Uber, Kapruka etc. By connecting service providers to a large audience, gig economy platforms can work as digital marketing tools—often the first specifically enterprise digital marketing tool a small business uses.
The trick will be making sure this growthhelps all workers rise, and does not leave the bottom percentage forgotten, exploited, or blocked from the World Wide Web. From there, the benefitsfor part-time workers, full-time workers, and micro-entrepreneurs alikeare endless.
Chathura Ganegoda (BSc (USJP), MCIM (UK), MBA(UOC))
“Lead the world to New Dimensions”, LinkedIn – @Chathura Ganegoda,
Email – Chathura.d.ganegoda@gmail.com, WhatsApp – 0777371229