Gig workers in search of a code as India's IT industry boosts opportunities

India's IT industry has the largest base of independent contractors in the world, but they remain outside the purview of labour regulations

A year ago, a mid-sized services company wanted to conduct an analytics exercise on its exhaustive database for some specific information. Instead of taking on a special team of data analysts, the company did the next best thing; it hired a professor of data science from a reputed engineering institute and a team of four engineers for a fixed period. Once the pro­ject was completed, the team was dismantled. By hiring gig workers, the company saved 20-25 per cent on the cost of hiring a full-time team to do the job.

Of all the major industries in India, the technology industry is the largest gig employer, with 57 per cent of tech firms actively employing gig workers. According to a Nasscom report, for calendar 2020, gig workers comprise more than 5 per cent of the total headcount in 48 per cent of tech firms, and more than 30 per cent in nine per cent of the firms.

The Economic Survey 2020-21 states that India has emerged as one of the world’s largest flexi-staffing markets owing to the fast growth in the e-commerce and online retailing industry. For the very first time, Finance Minister Nirmala Sitharaman in the Budget 2021-22 mentioned gig and platform workers and the need to provide them with social security. She also mentioned that a portal will be created to collect information on gig, building and construction workers.

This was also the first time the FM proposed to include the Code on Social Security that made provisions for the universalisation of social security for the entire workforce, including gig and platform workers. A key proposal of the code is the creation of a social security fund, which is to be 1 per cent of the total turnover of the aggregator. So far, only preliminary discussions have been held on the subject.

Currently, there are no minimum wages or health benefit packages or pension in case the person has been regularly contributing to a company’s growth. Add to this the fact that there are no internal grievance redressal mechanisms if a conflict arises.

According to a study by the Associated Chambers of Commerce and Industry of India (Assocham), India’s gig economy is expected to grow at a CAGR of 17 per cent to touch $4 billion in three years. Assocham also stated that India has 15 million freelancers in white collar industries such as IT and programming, finance, HR and design.

The Covid-19 pandemic forced corporations to work remotely and in testing the virtual working model the potential of gig workers was also demonstrated. If people can sit anywhere and work without impacting productivity, why not have gig workers who enable corporations to variabilise their cost?

Vijay Sivaram, CEO, Quess IT Staffing, said, “You are variabalising the cost by outcome. This saves on cost, creates desirable outcomes, and more importantly allows companies to try out new models and opportunities.”

He said his firm is seeing a 30-35 per cent increase in terms of gig employers being deployed and he gets two or three requests a day from people who want to understand how gig employees can be hired and deployed.

Industry experts are also of the view that by using gig workers for outcome-based jobs, they are getting access to talent that is not easily available otherwise. “Gig workers allow us to tap into new talent pools such as millennials, specialised retired professionals and women with secondary degrees who can devote three or four hours per day. This move can actually bring in over 100 million women with secondary degrees who don’t participate in the workforce. This allows the inclusion of a huge untapped workforce across the country including smaller cities,” said Keshav Murugesh, former Nasscom chairman and CEO of WNS, a business process management firm. 

Nasscom, the IT industry body that hires over 4.5 million people, has been at the forefront of trying to get gig workers into its work model. Though there is a need for the government to recognise these workers as part of industry, players individually are also making sure that clients too are roped in.

“Many years back offshoring and nearshoring were the go-to terms. Last year’s pandemic and remote working model has allowed us to acknowledge that an aggregated working model works. We believe that the industry can work with gig workers but this is still work in progress,” said Ashish Aggarwal, head of public policy, Nasscom.

The biggest hurdle for gig workers to get more involved with companies is the contract with clients. There could be issues around intellectual property protection, confidentiality and so on. These problems exist even when companies hire contract employees, but with gig workers these need to be solved. Some contractual terms will come in. Identifying these problems and where gig workers fit in with all this is still a work in progress.

“At this stage we do not have a proposal to take to the government. We are looking into the state and central laws to see if there are overlaps from an industry perspective and where remote working can be enabled,” Aggarwal said.

The fact that the worker is an independent entity means that she can work on more than one project at a time or work with different clients at the same time. This becomes a challenge for companies in the IT industry as they have access to client data.

“If you have contractual agreements in place, then gig worker deployment becomes difficult. From our end there are checks and balances in place so we do background checks and also share data with clients; there are non-disclosure agreements and other disclosures that need to be signed,” shared Sivaram.

As Murugesh concludes, “There are two essential requirements to enable these outcomes in India. The first is a conducive policy climate that encourages part-time employment. We are working closely with the government and other forums such as Nasscom to drive the right policy-making for this. And, second, relevant tweaks in client contracts that will allow us to deploy talent for their processes under this model.”