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The Future of Work is likely to involve many workers joining the “gig economy” – a free market system in which temporary positions are common and organisations hire independent workers for short-term commitments. It makes a lot of sense in the digital world of the Mutable Business – the worker is free to work where and when they like; employers can choose the best people for a given project from a huge pool, and upsize and downsize at will, as projects succeed or fail.
That last bit is the fly in the ointment, for the employee. In the gig economy, job security is limited (although it is possible that new freelance employment contracts, with regular retainers for potential talent, will evolve). As a freelance journalist and analyst, I have been in the gig economy for years, but (even though I went that way from choice and don’t regret the move one bit) I still remember worrying about financial security (where will this month’s income come from) and “imposter syndrome” (perhaps all my employers will suddenly decide I’ve got nothing new to offer). Despite the freedom, and the joy of no longer doing stupid things because my “pointy-haired boss” thought they might be a good idea, there are real downsides – extra stress, and the fear of ever turning down work, in case it suddenly dries up. Although, in my experience, the big risk is not lack of work but overworking and burn-out. Work/life balance still matters!
COVID-19 has accelerated the move into the gig economy for many; and many full-time jobs are taking on some of the characteristics of the gig economy. So, what do people who unexpectedly find themselves part of something like the gig economy need to know? We have only room for a brief (UK-oriented) summary here, but:
- Take advantage of whatever help is available. Professional organisations may offer help and advice. If your working conditions have suddenly changed, your employer should be providing assistance (although you may have to remind them, politely, of this). If you are at risk of being unable to pay debts, don’t risk debt getting out of control, get help from, e.g., the Citizens Advice Bureau or the Money Advice Service.
- Budget (see, e.g. here) especially if you are currently employed but think that that could end soon. Work out what your fixed costs are (council tax, mortgage, income tax etc.) and what costs are optional and can, at a pinch be eliminated. Look at all your sources of income (including government benefits if appropriate) and set yourself income targets. Track your income and expenditure – and watch out for overworking.
- Think about how you’ll maintain your social networks and digital connectivity – they are essential to your income (and even your sanity). Think twice about saving money on professional association memberships and broadband access. Question the value of boozy evenings down the pub, however – do they offer real social benefits? Don’t cut back on hobbies and clubs that do bring social benefits – but question your expenditure on them. An evening at your camera club, say, is probably useful to your welfare; buying a new camera body, less so.
- Don’t overlook the implications from having an office in your home (e.g. check home insurance, mortgage conditions and safety at work). If you are employed but working from home, check your employer’s obligations (see here) – you should have a safe environment and your employer might provide necessary equipment (a suitable desk, chair etc., as well as a computer, printer etc.); and you should agree when you are available for work.
- List any extra expenses and make sure you include them when you work out your fees or employment contracts (and if you are self-employed, at least pay yourself at minimum wage after tax, ideally a lot more). Find out if expenses can be offset against tax. If you are still employed but working from home, check what your employer can claim for – are you missing out on something they should be giving you?
In conclusion, if you are joining the gig economy or experiencing aspects of it (e.g. homeworking) think through the financial implications in advance and talk them through with your friends and/or spouse. You may well find that change is not always for the worse – but you don’t want surprises, and you don’t want to be taken advantage of.
This post is part of our Future of Work series. You can read the previous post, the next post, or find them all in our Future of Work section. If you’d like to discuss how we can help get you prepared for the way work and business is changing, then please contact us.