The role of gig workers cannot be underestimated, says Steven Fepeussi.
Every year, they contribute around £20 billion to the UK economy, according to the Centre for Research and Self-Employment. Carrying out vital work in daily society, these independent contractors do everything from delivery drivers and couriers to graphic designers and even university lecturers.
They account for a large part of Britain’s workforce too. In March 2023, one-fifth (22.1%) of the UK workforce or 7.25 million people worked at least once a week in the gig economy, research by the Office for National Statistics (ONS) has found. That is a rise of 50 percent from 2021, based on research by the University of Hertfordshire, with the total set to peak at 14.86m regular workers by 2026.
Despite all this, gig workers are often lowly paid and do not receive the same rights and benefits as their employed counterparts. They also tend to be on zero-hour or short-term contracts, getting paid for tasks completed rather than the time they have worked.
As if that wasn’t bad enough, gig workers also have to deal with rising living costs at a time when they can least afford it, driven by high inflation and energy prices. Consequently, many have taken on multiple jobs to make ends meet.
There is not much left over once they’ve shelled out for work-related expenses, such as fuel or obtaining a private licence. That is evidenced by a Leigh Day survey of 860 gig economy drivers, which found that 81 percent did not think their wages covered the cost of living.
In response to these rising costs, eight in 10 gig workers have cut their spending on groceries and energy, according to the Independent Workers of Great Britain Union. That’s in stark contrast to only 35 percent of those in average salaried jobs who have reported having to reduce their expenditure on household essentials, as per the ONS.
All of this has been compounded by a lack of access to mainstream banking and financial products due to their employment status. That’s because many traditional credit scoring models view gig workers less favourably than full-time employees, even if they have never been in the red.
It is not surprising, therefore, that many gig workers are rightly worried about their job security, with a high turnover rate in companies. They also feel that their voice isn’t being heard and just want to be treated well.
There is no obligation for employers to help gig workers during the current economic downturn, but many do because they realise the value they offer their organisation. This is especially true at a time when many organisations are having to make staff cuts and gig workers are stepping up to fill the gap.
Firstly, companies need to recognise the service that gig workers provide. Therefore, they should reward them with fair pay that reflects their work.
As well as equitable pay, they should help them cover the cost of other expenses. These may include fuel or vehicle repairs.
Additionally, they should make sure there’s a steady stream of work to enable them to continue to bring revenue in. The more regular the work, the more reliable a service they are likely to provide.
Access to payment
Providing gig workers with access to payment is another way that businesses can help. They can achieve this through using technology such as instant payment apps to give them access to their pay as soon as a job has been completed or, if they urgently need money, requesting an advance.
Money management tools can also help. They include everything from open banking and budgeting capabilities, and financial planning to credit building and self-assessment tax returns apps.
Above all, though, all of these platforms must be fair and transparent. Gig workers can better manage their finances if they can see what is happening more easily.
Supporting gig workers benefits the wider economy too. With more services going online in the wake of the Covid-19 pandemic, so the gig economy will be more important than ever. Thus, employers must ensure they safeguard their financial futures too.
Steven Fepeussi, co-founder and CEO of Puulse has been at the forefront of helping the underserved gig worker community by building a bank account specific to their needs that will let them access their funds when they need them and enable them to thrive.
Amelia Brand is the Editor for HRreview, and host of the HR in Review podcast series. With a Master’s degree in Legal and Political Theory, her particular interests within HR include employment law, DE&I, and wellbeing within the workplace. Prior to working with HRreview, Amelia was Sub-Editor of a magazine, and Editor of the Environmental Justice Project at the University College London, writing and overseeing articles into UCL’s weekly newsletter. Her previous academic work has focused on philosophy, politics and law, with a special focus on how artificial intelligence will feature in the future.