Garrett Cassidy FRSA is co-founder and CEO of Trezeo: a business account which provides financial stability for self-employed and gig economy workers by turning unpredictable income into regular pay cheques. He is part of a cohort of changemakers who are working together through the Economic Security Impact Accelerator – a pilot programme in partnership with Mastercard Center for Inclusive Growth – to have a greater impact on the economic security of UK workers.
In the midst of a rapidly changing economy and new ways of working, the rise of self-employment and gig work has established itself as a key structural trend in the UK and global economy. There are now 4.8 million self-employed in the UK, representing 15% of the workforce, and the number of people working for an online gig economy platforms at least once a week has more than doubled to 4.7 million in the UK. In fact, about 7.5 million people have worked via an online gig economy platform at some point.
There are many factors at play in the growth of independent work. The rise of gig platforms makes it easier than ever to turn one-off gigs into a main source of income, or a supplement. In an ever-increasing convenience economy, businesses want and need more flexible workforces – and many workers want more autonomy and flexibility. According to a 2018 study by Demos, the majority (80%) of self-employed people are happy and actively choose self-employment to take advantage the different lifestyle and flexibility it provides.
However, for self-employed workers there is often a trade-off between freedom and flexibility on one hand, and instability and uncertainty on the other. There is a growing challenge emerging for workers who no longer have access to the traditional safety net supported by employers, governments and the financial system – meaning that significant risks are shifting to individuals with limited options available to protect themselves.
The current safety net that employees rely on was developed for the industrial age, which began in the first half of the last century with the development of social security, employer benefits supported by the financial industry, and collective bargaining. The future of work in the current information age is a very different prospect: it is less certain, more fragmented, more volatile and the concept of the employer-employee relationship is breaking down.
Regardless of sector, income level, education, age – it comes down to the fact that the self-employed often don’t have all the tools, information or financial products in their arsenal to forge ahead on their own in an empowered, well-structured way. We need to urgently re-imagine the safety net for workers in this new age.
Technology can play a key role in enabling solutions that were simply impossible in the past. While many understandably fear the rapid emergence of technology – resulting in precarious work through platforms, a surveillance economy through misuse of data, and many other concerns – if used responsibly, technology and data provide the foundations to deliver viable solutions to the diverse population of self-employed workers.
The rise of gig platforms, coupled with open data and scalable technology solutions, provides an opportunity to rebuild how the financial safety net is delivered for this growing workforce. Through the responsible use of technology and data, new solutions can be built that effectively support the diversity of self-employed worker backgrounds and needs.
This is exactly what we are focused on at Trezeo: re-imagining the financial safety net for the self-employed. We do this by addressing key issues around economic security, including managing finances in the context of irregular and uncertain income, gaining affordable access to essential protections like long-term accident and sickness cover, and helping people to save for their future with simple and affordable savings and pension options.
This is just the beginning. Working with enlightened platforms and financial providers, we envision a world where the self-employed can be in control of their short- and long-term financial security. This will involve a consolidated set of protections and benefits that support people throughout their working lives.
As Nicolos Colin so eloquently described in his recent book, Hedge: A Greater Safety Net for the Entrepreneurial Age, the safety net must be re-imagined in order to avoid the many dystopian predictions for our shared futures.
We'll be sharing learnings from the Economic Security Impact Accelerator at our event, How to be an impact entrepreur, on 12 September.