The services sector already employs many gig workers, those who work as independent contractors or freelancers, but up to a fifth of future workforces in financial services could be gig employees too, a new PwC report has found.
PwC surveyed over 500 financial services businesses globally and found that more than half (52%) expect to have more gig-based employees over the next three to five years.
At the moment, gig-economy talent makes up 5% of the current financial services businesses workforce.
The report predicts that in the next five years gig workers will perform 15% to 20% of the work of a typical institution. PwC said this will be “driven by continuous cost pressure and the need to access digitally skilled talent.”
“Many of the most valuable companies in the world share one thing in common: they have embraced the platform economy as a business model,” said John Garvey, global financial Services leader, PwC US.
“They operate with relatively few full-time employees and an increasing percentage of gig-economy talent and skills that they can access on-demand, making the organisations far more innovative, nimble and cost-efficient,” he added.
However, there are challenges for financial services businesses taking on gig economy working.
The survey shows that the most common issue cited by respondents include confidentiality concerns (44%), a lack of knowledge (43%), regulatory risk (42%) and overall risk avoidance (37%).
The report also found that despite increasingly available on-demand talent, most institutions still rely primarily on full-time and part-time employees.
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Among respondents, contractors comprise just 9% of the workforce, and gig-economy talent makes up just 5%.
Beyond the gig-economy, crowd-sourcing solutions were also highlighted as a key contributor to improve productivity.
Crowd-sourcing has more than doubled since 2018, cited by 50% of the survey’s participants, from 21% in the first survey, of which 80% of respondents who leveraged crowd-sourcing believed it added ‘high value’ to their organisations. This is a significant increase from 39% who felt it would add value in 2018.
PwC also noted in the report that “upskilling of the workforce is a key element to improving productivity within financial services.
"This includes better understanding of the workforce, embracing the platform economy and gig workers and making sure employees are equipped with the right digital tools, specialist knowledge and soft skills to navigate in the new normal of the business world.”
Nicole Wakefield, global financial services advisory leader, PwC Singapore, said that “gig economy workers also add value by immediately bringing the digital skills needed by financial services firms to improve functions such as customer experience and improving institutional resilience, while the full-time workforce is being upskilled."
Meanwhile union bosses have said a UK Supreme Court ruling that Uber (UBER) drivers should be classed as workers will have “enormous implications” and affect people throughout the gig economy.
“The very fact this case has come to the UK’s Supreme Court shows the UK’s employment law is not working,” said the Association of Independent Professionals' director of policy, Andy Chamberlain.
“There is a glaring need for clarity in this area, to clear the confusion in the gig economy," he added.
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