Abstract
The Indian IT/ITeS industry is a significant contributor to India’s GDP and has had an impressive growth trajectory. However, it continues to be plagued with talent shortages, managing employee satisfaction, growth aspirations and reducing attrition.
COVID-19 has presented an unprecedented opportunity for IT service organisations to transform the established paradigm of working. The industry has been exploring non-linear growth models that address the talent demand-supply gap. With skilled talent shortage continuing to limit the industry growth, non-linear initiatives of growth are urgently required. We propose a model of ‘Internal Gig’ worker (I-GIG) for the IT services industry. The new I-GIG workforce would be providing non-linear outcomes without increasing costs significantly. We also argue that this model would be motivational for employees who opt for it, with commensurate reward motivations to engage them. Additionally, this model would enable the workanywhere, anytime and leverage talent availability on a global scale.
The old order changeth, yielding place to new,
And God fulfils Himself in many ways,
Lest one good custom should corrupt the world.
… Morte d’Arthur By Alfred, Lord Tennyson
The Emerging New Order
Slated to be among the world’s largest five economies, with over a billion potential customers, an IT powerhouse, India is emerging as a superpower. The aggregated revenue of the Indian IT and BPO industry was US$100 billion, and it provided direct employment to over 2.8 million in 2012 (Thite et al., 2014) and is approaching US$200 billion by 2021. With over 500 global delivery centres employing over 600,000 foreign nationals, the Indian IT industry has established its dominance in IT and BPO services. Over the last couple of decades, the IndianIT industryhas been a leading sector contributing to its economic growth.In 2017, theITindustry contributed nearly 8% to India’sGDP, providing direct employment to almost four million people and indirect employment to nearly 10 million people. For the continuous growth of this industry, intellectual capital availability is key to sustainable competitive advantage. Despite the burgeoning population, the workforce shortage in the IT sector looms large , constraining the Indian IT industry’s growth potential. The industry is actively exploring non-linear revenue growth models. Fluid talent markets with flexible staffing models using digital platforms are emerging as approaches organisations are adopting to meet the talent shortage (Kane et al., 2017). The survival and success of the IndianITindustry in a post-COVID-19 world depends on how we re-imagine, redefine and restructure the workplace.
Dynamic agility in talent management is required to proactively support emerging business opportunities and react to the context of change. This requires agility through the continuous shaping of talent and the organisational processes that deploy and develop human resources.
COVID-19 has presented an unprecedented opportunity for IT service organisations to transform the established paradigm of working. With clients embracing the reality of employees no longer being physically present at their locations, offices and networks, working from remote geographies and home locations worldwide now emerge as a tremendous opportunity. In the new world of work, the office building or factory floor is no longer synonymous with ‘workplace’ (Petriglieri et al., 2019). With clients willing to embrace the ‘anytime, anywhere’ working, IT organisations equip their employees with the required infrastructure support and enable their remote working with requisite changes in policies and incentives. Agility and resilience are fast becoming the most appreciated competencies of employees. An uptake in demand for IT and IT-enabled services will require IT organisations to add more employees with digital skills in the future, resulting in a skew between talent available and talent needed to support the industry.
The industry has been exploring non-linear growth models that address the talent demand-supply gap. With skilled talent shortage continuing to limit the industry growth (Agrawal et al., 2012; Pio, 2007), non-linear growth initiatives are urgently required. Due to the dynamic environment in which organisations operate, organisational resources’ flexible reconfigurations are required . Of the workforce population of 463.4 million in India, only 36.5 million comprise the formal and permanent workforce.1 The World Economic Forum’s recent study on ‘Future of Jobs 2020’2 shows that 90.3% of companies will provide more remote working opportunities and 87.1% are accelerating the working process’s digitalisation. 58.1% of organisations are accelerating tasks’ automation, 67% are more likely to hire new temporary staff with skills relevant to new technologies, and 65% of organisations are likely to outsource some business functions to external contractors. In comparison, 56% are likely to hire freelancers with skills relevant to new technologies. The data clearly shows that the global labour market is shifting towards a new equilibrium in the division of labour.
The industry is now on the cusp of embracing newer ways of engaging talent such as gig working (internal and external gig workers) and job sharing to support its growth needs while increasing the talent funnel by leveraging employees’ virtual working.
Gig Working
Gig working has been defined as ‘the temporary contract work that connects self-employed workers directly with clients via a digital platform’(Spurk & Straub, 2020, p. 2). As alternative work arrangements are increasing, both in the variety of schemas and in numbers of people opting for them (Spreitzer et al., 2017), gig work is emerging as a popular alternative to the conventional paradigmof regular employment. A gig economy is a free market system where temporary positions are common, and organisations hire independent workers for short-term commitments. Initially coined in the 1920s by jazz musicians, the term, short for the word ‘engagement,’ now refers to any aspect of performing, such as assisting with performance and attending a musical performance. More broadly, the term ‘gigging’ means having paid work, being employed.
In the 2000s, the rapid transformations in information and communication technologies enabled the digitalisation of the economy and the Internet and smartphone popularisation. As a result, on-demand platforms based on digital technology have created jobs and employment forms differentiated from erstwhile offline transactions by the level of accessibility, convenience and price competitiveness. In general, ‘work’ is described as a full-time worker with set working hours, including benefits. However, the definition of work began to change with changing economic conditions and continued technological advances, and the change in the economy created a new labour force characterised by independent and contractual labour. This breed of independent workersincludes highly skilled workers who exercise complete autonomy in their choice of work and duration.
Workplace flexibility arrangements have been categorised along the dimensions of scheduling work, locational flexibility and flexibility of employment relationships (Spreitzer et al., 2017). The gig is the online mediated work arrangement that provides maximum flexibility on all three dimensions(Spurk & Straub, 2020), along with individuals to create ‘mosaic careers’ (Ashford et al., 2018, p. 25).
With jobs becoming unstable, individuals opting for gig working may prefer it due to the high work autonomy, potential for work-non-work integration, better management of career opportunities resulting in boundary-less, individualised and whole life careers (Ashford et al., 2018). On the other hand, risks associated with gig working involve uncertainty of work, sporadic pay, lack of benefits such as welfare and insurance, social isolation and possibly less developmental opportunities and low psychological well-being and increased psychological dysfunction (Ashford et al., 2018; Churchill et al., 2019; Huang et al., 2020; Petriglieri et al., 2019). There is also a differentiation in workers’ skills and qualifications and the types of platforms that populate these workers’ segments. Highly skilled workers may be found at platforms such as Upwork, while low-skilled workers gravitate to platforms such as Amazon Mechanical Turk.
The COVID-19 pandemic has significantly impacted people’s working lives and changed working arrangements for regular employment relationships. Flexible working hours and locations, temporary agency work and newer forms of subcontracted work, such as gig working, have emerged as possibilities (Spurk & Straub, 2020). The pandemic has presented opportunities for individuals and organisations to explore the potential emerging schemas in work relationships, both short term and long term, enhancing flexibility and building resilience (Spurk & Straub, 2020). Agility in the workforce requires a scalable workforce, fast organisational learning and a highly adaptable organisational infrastructure. Developing this agility requires robust information systems support, a well-designed reward system, employee involvement and organisational learning. Organisational structures that enable workforce agility are decentralisation of decision-making, autonomy at work, cooperation with customers .The current labour market is shifting towards precarious work, with the market’s composition and characteristics evolving rapidly (Churchill et al., 2019). The changing work arrangements have the potential to develop new paradigms that enable career development, address work motivations and behaviours, and help organisations with multiple desirable outcomes of managing talent, increasing profitability, and encouraging flexibility in managing talent demand variability.
Proposed New Paradigm
Working in organisations helps build connections and provide a broader purpose to individuals. The attachments formed help establish work identities and legitimacy, a sense of self-esteem and security (Petriglieri et al., 2019). Gig workers not affiliated with organisations suffer from precarious and personalised work identity challenges. They face ‘chronic uncertainty about securing social and financial recognition, as well as about the stability and meaning of their work identities’ (Petriglieri et al., 2019, p. 125).
To counter these challenges, we propose a model of I-GIG working (see Figure 1). With I-GIG, individual pursuit of positive affect and the yearning for self-identity and group membership is maintained, and uncertainty reduction is fulfilled by terms of tenured employment, which is challenged for external gig workers not affiliated with the organisation. The I-GIG worker model for the IT services industry is borrowed from the initial concept of flexibility of a gig working. We propose that these I-GIG workers work for multiple clients based on their skills and need requirements for the projects. While it is common for IT service organisations to rotate their employees between client projects, the current practice is for dedicated association with only one client, mostly co-located till the project completion or task requirement is met. The new I-GIG workforce would be providing non-linear outcomes without increasing costs significantly. We also argue that this model would be motivational for employees who opt for it, with commensurate reward motivations to engage them. Additionally, this model would enable the workanywhere, anytime and leverage talent availability globally.
In the subsequent sections, we call out the challenges in developing the ecosystem around this schema of working. We also present possible solutions to enable a sustainable I-GIG, which would exist in harmony with concurrent systems of working.
The Idea in Summary.
Implementing I-GIG in IT and ITeS Organisations
The three significant stakeholders in accepting and promoting I-GIG in IT and ITeS organisations are the clients, the IT/ITeS organisations and their employees. We examine the potential concerns and the commensurate mitigation for each of these stakeholders.
Client Organisations
The primary concerns of client organisations revolve around data and IT security, talent quality and availability, on-time project delivery and project costs. For enabling I-GIG, clients may have concerns about how data privacy and confidentiality are maintained. The solution is to ensure appropriate rights, non-disclosure agreements and robust IT security and infrastructure support enabled by the client and IT service organisation, all of which can mitigate this risk. Many clients vet the quality of talent being inducted to manage the project delivery. The same practice may be continued for I-GIG working. However, IT service organisations may also provide assurances on on-time completion and quality standard of project delivery and circumvent the need for client interviews. The conventional models of project pricing (time and material, fixed price project) may evolve to a more mature outcome-based pricing.
Additionally, value appropriation accruing from I-GIG working in the IT/ITeS organisation may be shared with the client through changes in the master service agreements. This could incorporate a change in pricing for a certain percentage for I-GIG working in the client projects. With penalty charges enforced for project delays, a reduction in project costs is likely to be attractive to the client organisations since this model’s risks would have been mitigated.
IT/ITeS Service Organisation
The onus of making the I-GIG successful largely rests on the IT/ITeS organisation.
Talent matching: The organisation needs to set up an internal marketplace platform to make gig opportunities visible to the internal workforce. Most mid to large-sized organisations have well-developed talent management platforms, which leverage artificial intelligence and machine learning to manage the talent demand-supply coordination. Minor changes in this platform would make visible the talent demand to the workforce, allowing employees across all locations to apply as per their interests and motivations. Additionally, the platform would need to manage the time and work outcome allocation between projects for I-GIG workers so that they have the required flexibility to juggle multiple client demands.
Performance and reward management: Conventional performance management systems are designed for a one-to-one project mapping of employee and client projects. With I-GIG workers simultaneously engaging with multiple projects of varying durations, the performance management system would need to align with this one-to-many I-GIG to project relationships.The same talent demand-matching platform may be enhanced to provide performance management and reward disbursement, akin to the Uber platform. Client feedback and IT/ITeS organisation managers can jointly review the performance aftercompleting the gig assignment.
The reward system of successful completion may also be linked through the talent management system. This incentive may be separate from the annual variable pay mechanisms. Hence, the aspect of instant gratification would appeal to the I-GIG workers. Additionally, training needs and client and project inputs provide a strong feedback mechanism, enhancing individual motivation for continuous learning. Lastly, the platform may also be developed to publish the ‘rank’ of the I-GIG workers, likeUber’s reputation score. This may serve as a robust mechanism for improvement for the I-GIG workers.Clients may prefer high-ranking I-GIG workers for more prestigious projects.
Change management for I-GIG adoption: Apart from enabling client buy-in for I-GIG working, enabling commensurate infrastructure, security and compliance adherence, the organisation needs to create support for the I-GIG working. This starts with the leadership team promoting I-GIG working and taking affirmative targets to increase I-GIG working within their teams. The organisation also has to celebrate I-GIG success stories to demonstrate its benefit to the larger organisation. This is likely to enhance adoption, with other employees seeing the faster growth and learning trajectories of I-GIG workers.
Career and talent management support: I-GIG workers may need additional training to balance work flexibility, time management and multiple stakeholder management. Apart from this, employee assistance programmes are required to help them manage any associated stress. Furthermore, proactive career counselling and guidance to help them map assignments aligned with their aspirations will be critical for I-GIG employees to feel they are truly empowered in their career decisions.
Client and infrastructure enablement: Client acceptance, commensurate legal, security and enabling infrastructure to support I-GIG workers engaging with multiple clients has to be put in place.
Ecosystem for Developing I-GIG implementation.
I-GIG Employees in theOrganisation
I-GIG opportunities present all the benefits and none of the risks associated with an external gig working. External gig working isrelated to the dangers of low wages, reduced benefits, absence of job security and power in conflict resolution . This risk is mitigated since I-GIG workers are permanent employees of the organisation, enjoying guaranteed pay and benefits. The positive characteristics of external gig working, such as work characteristics of task autonomy, increased flexibility and job mobility, are retained. Employee satisfaction and engagement are likely to be positively impacted as the job’s extrinsic motivation and motivation increase. The continuous feedback and reward mechanisms allow I-GIG workers to experience more control over their effort and learning. Healthy career management practices enable protean career evolvement, faster growth path and higher recognition. All of these are expected to enhance organisational commitment and reduce talent attrition.
However, not all employees may be able to manage the demands of multi-project tasking, time and stakeholder management. The absence of this ability may lead to stress, work fatigue, impact work-life balance and cause burnout. Hence, counselling before and during I-GIG may help employees self-select and manage the multiple demands on them.
Expected Impact
If 5% of the employee base takes on I-GIG working, the direct impact of enhanced productivity and better utilisation is likely to yield a 1% increase in earnings before interest, depreciation, tax and amortization (EBIDTA). For the top four IT service companies in India, with revenues of $122billion, this would produce a whopping $1.2 billion increase in profitability. Assumptions on the monetised indirect costs of reduced attrition, continuous upskilling, higher engagement and reduced recruitment costs yield a conservative improvement of 0.5%–1.5% increase in operating profits. Based on the I-GIG programme’s success, organisations can further seek to reduce their contingent workforce and increase the permanent workforce utilisation. I-GIG programme’s success can address the variability in skill needs and increase the organisation’s profitability.
While the above estimates have been made for the IT-ITeS industry, I-GIG as a concept could be applicable to all knowledge workers and industries where revenue is linked to client billing. Hence, consulting, audit and knowledge management services could also benefit from adopting I-GIG. However, these organisations may not have well-evolved talent demand-supply matching IT platforms. The existing IT/ITeS service organisations may also productise their platform to make these available as a platformas a service (PAAS) model. This could yield additional revenue to the IT firms.
Discussion
The future of work is getting radically altered, with disruptions in organisations’ established work practices and the labour markets. While careers are increasingly getting fragmented, jobs are likely to become more exploitative. We propose a new way of working, which leverages the current technological and social trends.
Our argument for promoting I-GIG is based on the need to transition trained legacy skill workers to higher-order technologies. In their study on ways to win the digital war for talent, Kane et al. (2017) argue that technical skills are essential only for a small percentage of the time, with capabilities such as change-orientation and forward-thinking being some critical skills for organisations and their employees. I-GIG workers are still experienced in project management tenets and possess valuable tacit knowledge about the organisation and clients. Through action learning and mentoring through I-GIG work, these employees would be able to upskill themselves, serving their employability needs and the industry’s requirements. Employees look for opportunities with organisations to ‘allow them to develop and demonstrate skills and abilities to succeed in the digital work’(Kane et al., 2017, p. 17). This upskilling helps employees be more organisationally relevant to required technologies, thereby enhancing their motivation and improving retention.
The I-GIG working solves a significant problem of talent deficiency without increasing costs. It further improved productivity, resulting in higher organisational profitability. However, the exploitative nature of conventional gig working is reduced without diluting all the positive affect aspects of work autonomy, career mobility and work flexibility.Our proposed approach’s fundamental difference is the autonomy and choice provided, not just for the skilled resources but to the larger workforce. Organisational structures that enable workforce agility are decentralisation of decision-making, autonomy at work and cooperation with customers. These tenets of workforce and talent management agility form the I-GIG model’s foundation presented in our article. Our article suggests the mechanisms for organisations to embrace this and the resulting expected payoffs.
