A recent study by McKinsey has estimated that up to 20-30% of the workforce in developed markets is engaged in independent work. Similar research by economists Lawrence Katz of Harvard University and Alan Krueger of Princeton University shows that from 2005-15, the proportion of Americans workers engaged in what they refer to as “alternative work”, jumped from 10.7% to 15.8%. “We find that 94% of net job growth in the past decade was in the alternative work category,” said Krueger.
In the consulting/knowledge working context, the gig economy is often referred to as the open talent economy, a term largely attributed to Deloitte Consulting. It’s a way to work or conduct business in a borderless and technology-enabled market where businesses and professionals seek each other out to collaborate on a particular project.
In a gig economy, the job market is characterized by the dominance of limited-period contracts rather than permanent jobs. So, instead of a regular wage, workers get paid for “gigs”. Though proponents of the gig economy claim people can benefit from flexible hours, it has its fair share of detractors, who consider it a form of exploitation, with very little workplace protection.
In Asia, the concept of the open-talent or gig economy is in its infancy, though it has definitely become part of a changing cultural and business environment. There is a distinct shift in tenor and tone, and we are seeing the emergence of a new segment which looks at people with high-end skills in marketing, human resources, finance, etc.
Why is it happening?
The reasons are many: A slowdown in both regional and global economies, organizational downsizing and cost-cutting have contributed to the rise of professionals opting for flexible arrangements, sometimes by design and sometimes owing to the lack of other options.
A highly connected, mobile workforce, and the emergence of the millennial generation that values a flexible work schedule so strongly that it would be willing to give up higher pay and promotions for it, is driving the change in rules of the employment game. According to PwC’s “Workforce Of The Future Report”, the “desire for autonomy is strongest in China, especially among young people, indicating a generational shift in attitude towards greater freedom, entrepreneurship and specialist skills in this rapidly evolving economy”.
In India too, this trend is on the upswing. “Our Future Of Work survey tells us that Indian knowledge professionals are increasingly opting for independent gigs as a matter of choice and are seeking flexibility and purpose in their career,” says Chandrika Pasricha, founder and chief executive officer of Flexing It, a platform for independent consultants in India and South-East Asia.
India and the gig economy
In India, while start-ups were the early adopters, multinational companies, consulting firms and large enterprises are embracing the concept. Flexing It’s research indicates that over a third of the 500-plus organizations surveyed expect to rely up to 50% on flexible talent in the next five years
Wade Azmy , managing director of ICG Singapore, a digital platform and a network for independent consultants, believes the Indian market has many freelancers/non-employees ready to engage in short-term projects—but these have been focused primarily on lower-value projects. High-end skilled freelance work is on the cusp of take-off. Azmy believes freelancers and specialist boutique firms will need to network, integrate and organize themselves in order to fulfil complex client needs while guaranteeing the quality and security of client intellectual property and commercial information.
“India, for us, is more of a talent base than a client base,” says Vincent Casanova, a-connect’s client partner for Asia, who is based in Singapore. A-connect is a Zurich-based global consultancy that provides employers with flexible and on-demand talent. Casanova classifies India as a highly competitive market with a large number of independent consultants with strong English proficiency whose skills can be utilized in other Asian markets (mainly the Middle East and South-East Asia). “This talent is available at low rates by regional standards, which makes it attractive and affordable,” says Casanova. “At the same time, it is important to note that the growing trend in most Asian markets—with the exception of the Middle East, Singapore and Hong Kong—is the high demand for consultants with strong local knowledge, network and language skills. This could potentially curtail the use and exportability of Indian independents,” he adds.
While global and regional consulting firms clearly envision a future in India, they are cautious in their approach. Sumer Datta and Sanjay Lakhotia, the co-founders of Noble House, a network consulting outfit for independent HR professionals, say there are several reasons to celebrate the gig economy in India but there are practical challenges too: the traditional mindset, lack of networking platforms, a large variance in billing rates and a feeling of isolation.
How the Gig economy works
Embracing the open-talent economy helps organizations blend full-time employees with short-term consultants, making them nimbler and more efficient. Unlike traditional consultants—such professionals often get embedded in the organization, assimilate its ways of working and cost a third of what a “traditional” consultant might, while bringing a wealth of experience and specialist skill sets.
It is a win-win for both the company and the independent consultant.
There are, of course, some challenges. For starters, how can companies and independent professionals be expected to find each other in an effective and efficient manner? From the organization’s perspective, the challenges centre mainly on the reputation of the consultant, and whether that person can meet the expectations of the task. From the consultant’s perspective, the “model” works on networking, word-of-mouth references and 24x7 business development. Some of the finest consultants (akin to other creative and knowledge workers) do not always make the best business developers. Often, senior professionals who decide to branch out on their own for lifestyle or downturn-related reasons find it tough to find business without the comfort of a strong brand, resources and an organization behind them. Besides, contracts are often skewed in favour of conglomerates, with little room for negotiation.
An organization’s ability to engage with talent on an on-demand basis could truly reshape the way businesses work. However, this needs to be implemented with an open mindset and well-articulated expectations. For the model of on-demand talent creates an ecosystem that promotes super specialists who need clear direction and assimilation in the traditional organizational hierarchy.
Ruchira Chaudhary is an independent strategy professional, an executive coach and adjunct faculty. She divides her time between Singapore and India. An edited version of this article first appeared in HQ Asia.
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