Digital boom driving ‘high-end gig economy jobs’ shift

Gig economy workers are likely to perform 15-20% of the work of a typical financial institution within five years, according to a recent PwC report, as cost pressures and the need to access digitally-skilled talent reconfigure the structure of many organisations.

More than half (52%) of financial institutions say they expect to have more gig-based employees over the next three to five years, according to PwC’s ‘Productivity 2021 and beyond’ report, published in February, which surveyed more than 500 financial services businesses globally, and included more than 60% of responses from C-suite leaders.

The report outlines how banks have begun to embrace the platform economy and gig workers to ensure they are able to speedily adapt to the project-led pace of digital change.

“Firms need new capabilities – both in-house and through outsourcing – as technology solutions increasingly involve collaboration with third parties,” the report stated.

Most institutions still rely primarily on full-time and part-time employees. Contractors comprise 9% of the workforce and gig-economy employees makes up 5%, according to PwC’s survey.

“Leaders in the industry are looking seriously at their workforces to evaluate which roles need to be performed by permanent employees and which can be performed by gig economy workers, contractors or even crowd-sourced on a case-by-case basis,” said John Garvey, a US-based partner at PwC.

“Covid-19 and remote working have opened the door to accessing talent outside of a firm’s physical location, including outside of the country.”

The surge in gig economy workers over the past decade has become a divisive issue. In November, a California ballot initiative overturned a state assembly law seeking to give gig economy workers the legal status of employees rather than independent contractors. In the UK, the Supreme Court ruled last month that Uber drivers must be treated as workers rather than self-employed, which could have wider implications for the gig economy.

Gig economy 2.0

“The [new gig economy] jobs we’re talking about in financial services sector not on the banking and investing side. We’re really talking about IT specialists, software designers, and UX [user experience] developers,” said James McQuivey, an analyst at Forrester. “It’s not a shift from full-time work to part-time work, but just a re-shuffling of the mix as new demands require new skills.”

About 30% of the US workforce already does not work full time, Mr McQuivey said.

“Across the world, big tech companies like Amazon and Google — which have 1,000s of developers — are disrupting every sector. Companies are recognising that they need to respond quickly to changes in their industry. Banks require resources that are more easily scalable up and down in response to the big [tech-led] changes that are happening.”

Mr McQuivey cited the rapid uptake in smartphones over the past 10 years, which has forced banks to quickly establish a mobile strategy and develop apps. The surge in demand for mobile web developers led to skilled workers moving around from project to project at different financial institutions.

Another fast-developing area is digital customer experience, he said, which has led to a surge in demand for UX developers on short-term projects. “For a company to join the next level of customer experience they need to make changes in the next six weeks. Now businesses talk about having an agile culture and the importance of being able to respond rapidly,” Mr McQuivey said.

“Most full-time employees have specific responsibilities, which you cannot just unpack and then magically reassign them for six weeks.”

“Many of the gig economy workers we’re talking about have unique in-demand skills in web development, sophisticated customer experience applications and artificial intelligence,” he added

“These are people with very high-end employability and it can work for them spectacularly well. They get well paid for a stint as a gig worker on a particular project with one company and then move onto the next one.”