Friday, 5 October 2018

GIG ECONOMY - FREELANCER ENGAGEMENTS


A gig economy is an environment in which temporary positions are common and organizations contract with independent workers for short-term engagements.

The trend toward a gig economy has begun. For one thing, in this digital age, the workforce is increasingly mobile and work can increasingly be done from anywhere, so that job and location are decoupled. That means that freelancers can select among temporary jobs and projects around the world, while employers can select the best individuals for specific projects from a larger pool than that available in any given area.

Digitization has also contributed directly to a decrease in jobs as software replaces some types of work and means that others take much less time. Other influences include financial pressures on businesses leading to further staff reductions and the entrance of the Milennial generation into the workforce. The current reality is that people tend to change jobs several times throughout their working lives; the gig economy can be seen as an evolution of that trend.

In a gig economy, businesses save resources in terms of benefits, office space and training. They also have the ability to contract with experts for specific projects who might be too high-priced to maintain on staff. From the perspective of the freelancer, a gig economy can improve work-life balance over what is possible in most jobs. Ideally, the model is powered by independent workers selecting jobs that they're interested in, rather than one in which people are forced into a position where, unable to attain employment, they pick up whatever temporary gigs they can land.

“The gig economy can be used in a range of roles, whether it is junior admin roles and hospitality right up to highly skilled workers, developers and designers and marketers,” he says. “It’s also valuable at the executive level – CFOs, CTOs can be really effective on a gig basis as it’s an opportunity for organisations to bring in intellectual property (IP) if the business is lacking in a certain area.”

This trend is already underway within recruitment sector. Senior people with experience of working in large companies into smaller companies for short periods, in order for the company to absorb their expertise.

Interestingly, these ‘interim executive solutions’ are proving to be a disruption, less to permanent work, but more in the management consultancy space. As clients become more aware of the possibility of engaging very high-calibre talent for short time spans, this represents a significant opportunity for recruiters.

The gig economy is part of a shifting cultural and business environment that also includes the sharing economy, the gift economy and the barter economy.

Why is it happening now?



People joining the workforce now have a different mindset from the past. People are looking for experiences and growth, and the need for stability is not so ingrained.

Gribble believes the move towards shorter-term roles is also being driven by specialisation.

Twenty years ago, professionals were generic. These days, market is demanding more specialist and niche skills. But companies can’t employ people with all the niche skills required, as they’d just have too many people.

While the perception of short-term roles may have changed in recent times, the idea of hiring employees for short-term roles isn’t new – what’s new is how we go about it.

Previously if you wanted to call a taxi, you’d call a taxi company and if you wanted to buy goods you’d go into a store. What has enabled the gig economy in the format that everyone is now talking about is the rise of technology.

Technology and its intermediation power has meant that buyers and sellers for hirers and service providers can directly connect.
Limits of the gig economy
Gig economy will never replace permanent work, as people will always value the security and longevity that permanent employment can bring. “Permanent employment will continue to thrive where there is a match of company values with that of the employee, and where it’s perceived to contribute to their career development and progress."

‘When you find a good company, you want to stay with it.   Often after a period of time contracting, people desire that ongoing connection with a culture and this can be limited with contract workers.”

Gig economy comes at the point where expert internal knowledge is paramount for the role. “There is still a huge need for robust full time, part time and casual employment.  The main reason for this is because businesses are crying out for talent and they want to hold onto as much IP as possible.

Workforce are being supplemented by gig workers, who either deal with skills shortages or supply shortages of labour. The growth of the gig economy also has the potential to impact on the skill levels and career development of workers.

Of course, contract workers always have the possibility to impress a company to get more work, or even permanent work. If your ambition is to manage large teams of people, the gig economy can serve as a ‘between’ job. But employers will assess your success as a manager over perhaps a three year period, rather than three months.

Thursday, 8 February 2018

UNION BUDGET 2018- For Individuals



Union Budget 2018 had provided very little relief for individuals. There have been no changes to tax slabs  or rates for individual taxpayers except for effective increase in the rate of cess by 1% as “Health and Education cess”


 


Budget Proposal
Existing Provision
Proposed Amendment
Standard Deduction for Tax Payers
No standard deduction separately for salaried taxpayers
Conveyance allowance of Rs.19,200 p.a. & reimbursement of medical expense upto Rs.15000/- p.a. exempt u/s 10
Standard deduction up to Rs.40,000/- for salaried taxpayers
Consequently, existing conveyance allowance & medical reimbursement benefits to be withdrawn
Deductions available to senior citizens on health insurance premium and medical treatment
Deduction allowed up to Rs.30,000/- p.a. u / s 80D
Existing deduction limit to be increased to Rs.50,000/-
Enhanced deduction to senior citizens for medical treatment of specified diseases
Deduction allowed up to Rs.60,000/- for senior citizens & Rs.80,000/- for super senior citizens u/s 80DDB
Existing deduction limit increased to Rs.1,00,000/- for both senior & super senior citizens
Deduction of interest income from deposits held by senior citizens
Section 80TTA allows deduction up to Rs 10,000/- in respect of interest income from savings account to all taxpayers
Proposed section 80TTB to allow deduction up to Rs 50,000/- for interest income from deposits held by senior citizens
Consequently section 194A to be amended to raise limit of deduction of tax at source (TDS) on such interest income to Rs 50,000/-

New Pension Scheme (NPS) tax free withdrawal limit
As per section 10(12A), an employee contributing to NPS is allowed an exemption in respect of 40% of the total amount payable to him on closure / opting out of his account
It is proposed to extend the said tax-free withdrawal benefit to all subscribers of NPS
LTCG on sale of equity shares
LTCG arising from transfer of long term capital assets, being equity shares of a company / unit of equity oriented fund / unit of business trusts, is exempt from income-tax under section 10(38)
Further, such transactions carried out on a recognized stock exchange is liable to securities transaction tax (STT)
Section 112A proposes to tax such LTCG @10% on amount exceeding Rs. 1 lakh
LTCG will be computed without giving effect to:
−cost inflation indexation
−and the benefit of computation of capital gains in foreign currency in the case of a non-resident
All gains up to 31 January, 2018 will be grandfathered