Freelancers Seen to Take Up A Bigger Chunk of Financial Companies' Workforce in the Next 5 Years, Study Says
In the next three to five years, over half of financial institutions worldwide say they will hire more freelance workers or so-called “gig employees,” findings of a study by multinational PwC (PricewaterhouseCoopers) revealed.
The report entitled “Productivity 2021 and beyond: Upskilling the workforce of the future to create a competitive advantage in financial services” surveyed over 500 financial services businesses globally. Over 60 percent of responses came from C-suite leaders.
Increase in outsourcing talent
The report found that most institutions still rely primarily on full-time and part-time employees despite increasingly available on-demand talent. Among the companies surveyed, contractors comprise just nine percent of the workforce, while freelancers or gig-economy talent make up just five percent.
However, PwC forecasts that financial institutions will likely outsource up to 15 percent to 20 percent of their workforce to freelancers within the next five years due to “continuous cost pressure and the need to access digitally skilled talent.”
PwC defines “gig workers” as “non full-time employees sourced for specific projects and skills for a function or engagement and are not exclusive to any employer. They may be working on multiple projects for different firms, with no defined period of time,” while contractors are also “non full-time employees on the payroll…(who) generally work exclusively for the employer and for a defined period of time as opposed to a project basis.”
However, the study also notes some challenges financial services businesses will need to address when taking on freelancers, including confidentiality concerns (44 percent), a lack of knowledge (43 percent), regulatory risk (42 percent) and overall risk avoidance (37 percent).
Beyond the gig economy, the study also found that crowd-sourcing solutions also helps improve productivity.
“Crowd-sourcing has more than doubled since 2018, cited by 50 percent of the survey’s participants, from 21 percent in the first survey, of which 80 percent of respondents who leveraged crowd-sourcing believed it added ‘high value’ to their organizations,” the study read. “This is a significant increase from just 39 percent who felt it would add value in 2018.”
“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, PwC’s Global Financial Services Leader, PwC US. “COVID-19 and remote working have opened the door to accessing talent outside of a firm’s physical location, including outside of the country. What we are seeing now is a talent marketplace for gig workers in financial services, competing to take advantage of their specialist skill set and boost productivity within their businesses.
“Many of the most valuable companies in the world share one thing in common: they have embraced the platform economy as a business model,” he added. “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.”