The so-called ‘gig economy’ in the UK is huge: around 4.4 million people work for gig platforms at least once a week, some as their primary occupation. Gig work (sometimes called platform work) means short-term, one-off pieces of work (like a cab ride, food delivery, or furniture assembly) carried out by independent workers who are usually paid per ‘gig’, rather than per hour or even per annum.
Gig work has exploded in recent years for a couple of key reasons. From an employee perspective, working in this way means you can largely determine your hours and how many tasks you undertake. It can fit around other jobs or family commitments, and there may be lower barriers to entry than many other jobs. From an employer perspective, paying workers per gig and keeping them as self-employed contractors means there are fewer additional costs like holiday pay, sick leave, or pension payments (although this has regularly been challenged in the courts).
Of course, reduced rights for gig workers means these jobs can be more precarious and leave them in a difficult position if they are, for example, too unwell to work, or simply need a break. Additionally, many gig workers are not able to work as many hours as they might wish, simply due to changing demand for their services. Being underemployed is associated with psychological distress given the ensuing insecurity and uncertainty these workers face.
Every company benefits from having a healthy, happy and resilient workforce, and gig employers are no different. Organisations like Fairwork are helping to improve conditions for gig workers by codifying and promoting fair pay, conditions, contracts, management and representation. Big companies like Uber have made small steps towards introducing better benefits for their workers.
Is enough being done to safeguard the financial wellbeing of gig workers?
Financial wellbeing isn’t just about how much money people have in the bank, although fair pay is certainly one aspect of it. It also encompasses the following facets:
Financial resilience: This is how well someone is able to withstand financial shocks. Gig workers may be more at risk from sudden shifts in the economy, as they don’t have guaranteed work or pay. Helping them create a decent emergency fund can be one way to support them – that way, if demand for their labour tumbles, they will at least have access to their emergency savings, and significantly reduce their risk of getting into debt ‘to make ends meet’’.
Money management: With regular income, budgeting and saving can be easier to manage than with fluctuating pay levels. With irregular income, this becomes more difficult to manage. Supporting gig workers in managing their spending and juggling cashflow can help them deal with daily life and lower potentially damaging stress levels.
Future planning: Gig workers may need to arrange their own pension savings so they’re not left with just the state pension, which may not be enough to live on in retirement. Some companies are setting up pension schemes and saving arrangements for their gig workers, but in general, workers may also need education and support to help them put money aside and plan for their future.
Money mindset: Financial wellbeing goes hand in hand with mental health. Recent surveys suggest that up to 70% of all mental health problems have an underlying financial stress as the root cause. Uncertainties can leave gig workers with high levels of stress, and they may need further help if they get overwhelmed.
Poor financial wellbeing can have a huge impact on productivity, and workers who are unable to meet their financial demands may be forced to seek gigs elsewhere, leaving companies in a difficult position.
What should companies do to boost the financial wellbeing of their gig workers?
Of course, making sure pay is adequate, even with rising costs of living, is one key way to protect gig workers financially. This also needs to take into account the costs that gig workers can face (e.g. petrol or vehicle repair). Equally, ensuring gig workers have plenty of work to drive their income is another. But, beyond this, companies should be taking a proactive approach to their workers’ financial wellbeing, for example:
- Understanding what problems their workers are facing, and where they could improve. This will involve gathering data from the workforce and identifying where intervention is needed.
- Offering group or 1:1 coaching, or informative workshops, for workers who need upskilling in this area, or may be facing particular financial stress.
- Providing access to money management tools. This might include open banking and budgeting capabilities, financial planning, or credit building tools (hugely important for workers who are in rented accomodation and trying to get onto the property ladder).
- Helping workers understand what they should be saving now in order to have a healthy and happy retirement.
Whether organisations create their own support systems, or turn to an external provider like Maji, addressing the financial wellbeing of workers is an essential part of making gig work more secure, and allowing people to exploit the advantages of flexible working without being forced into hardship.
We would also love to see more support for including financial wellbeing as an essential part of a fairer deal for gig workers. In recent years, we have seen a variety of responses to the inequalities faced by those in uncertain working conditions, including pledges from major political parties, and measurement tools like the WageIndicator Labour Rights Index. Fairwork ranks platform employers around the world and highlights best practice. Adding financial wellbeing support to these pledges and ranking exercises would further help close the gap between gig workers and employees.
If you’d like to find out more about how Maji’s platform can help you and your team build financial wellbeing, reach out for a quick chat.
Photo by Hello I’m Nik on Unsplash