Larger companies are opting for gig workforce: Rachit Mathur, co-founder and CEO, Avenue Growth

Rachit Mathur, co-founder and CEO, Avenue Growth

Thanks to the pandemic and resultant mobility restrictions, 2020 was a boom year for digital labour platforms around the world and in India. Gurugram-based Avenue Growth is one such platform, with a workforce of around 67,000 gig workers or those who work outside of the traditional employer-employee relationship. The company’s co-founder and CEO, Rachit Mathur, shares his views on digital labour with Surya Sarathi Ray. Excerpts:

At Avenue Growth, what is your revenue model? What was the rate of revenue growth in the last fiscal and what kind of growth are you expecting in the current fiscal?

Avenue Growth is an on-demand work platform, which helps companies in find-hire-manage gig workers and get the work done on its platform. We offer two kinds of engagement models to clients: task-based and shift-based. We charge a commission on the project value executed on the platform. In 2020, we grew 3X in all our metrics. We are expecting a similar growth rate this year too, owing to a rise in the gig eco-system and larger companies opting for gig workforce.

What are the sectors that you cater to? What kind of people do you deploy and what is the current number? What was the number at the start of the pandemic?

We cater to majorly the grey-collar segment, which comprises of field executives, tele-callers, store promoters and sales professionals. Right now, 75% of our gig force is between 24-30 years of age, bachelors’ degree holders, having two-three years of work experience who are either looking to supplement their current incomes or want to become their own boss and earn only through our platform. Right now, we have a workforce of 67,000 giggers, of whom 35,000 were added just in the last year during the pandemic.

The pandemic has certainly transformed the ways gigs work. What are the changes at the client’s end? Is there any change in the ways giggers want to engage also?

Clients are becoming very cost conscious now and want to variablise a lot of their fixed costs. From asking for number of people, they are now talking about number of tasks. They just want to get the work done without the headache of hiring people, fixed cost and compliances. Larger clients have started seeing gig [workforce] as a replacement of their full-time resources and as an efficient and quick go-to market options. The mindset of the giggers has also changed drastically. From full-time jobs, they are now looking at earning opportunities. For them, the key element is that they are getting attached to a platform and not to the end-client.

What is the total size of the gig industry now? What is the average growth rate?

India has around 15 million freelance workers engaged in projects across sectors. The country ranks as the second-largest freelance workforce after the US. There was a 27% increase in freelancer revenues in the past year. In India, the freelance industry is estimated to grow to $25 to $30 billion by 2025. The gig economy has the potential to serve up to 90 million jobs in the non-farm sectors of India or around 30%, with the potential to add up to 1.25% to India’s GDP through efficiency and productivity gains alone. The majority of gig-able jobs are in construction, manufacturing, transportation and logistics, and personal services sectors; primarily driven by MSME and household demand, with varying frequency of use.

What are the benefits for an establishment in engaging gig workers compared with those permanent or contract in nature? What are the advantages for a worker in a gig environment?

For an establishment, the advantages are many. They have no fixed cost in terms of salary, no hiring cost, no compliances to oblige, no long-term commitment. They can follow the pay-as-you-go model and many others. There are several advantages for a worker in the gig environment. They can work as per convenience, work on multiple projects for skill set enhancement and get same-day payments on many platforms, including us.

Which are the sectors offering more gig employment now?

Fintech, edutech and e-commerce

What are your plans for expansion?

For us expansion is twofold. Building new advanced technology features which revolves around delivery of work by the freelancer, skilling and training of freelancers and work tracking tools for the clients. From the business perspective, we are adding more verticals in skilled and unskilled segments, which we are adding to our existing portfolios and build a stronger presence in tier-II cities.

Will your cost of operations go up when the new labour codes are implemented? By how much?

Yes, our cost of operations will go up because till now gig/ platform workers are [outside of] the employer-employee relationship; so, we were out of the purview of statutory compliances like EPF, ESIC, etc. But once the new rule is in force then cost will go up. Having said that, there is an opportunity for business owners who are using temporary workforce even for the smaller periods. They can hire gig/ platform workers through platforms and save cost on their statutory payouts like EPF and ESIC and save approximately 10-12% per employee.