More than half (52%) of financial institutions expect to have more gig-based employees over the next three to five years, according to a report from PwC.
This second iteration of PwC’s productivity research surveyed more than 500 financial services businesses globally and received more than 60% of responses from C-suite leaders. The report looked at workstreams implemented by financial services businesses and evaluated their impact on productivity.
The upskilling of the workforce is a key element to improving productivity within financial services. This includes better understanding the workforce, embracing the platform economy and gig workers, and making sure employees are equipped with the right digital tools, specialist knowledge and soft skills to navigate in the new normal of the business world. Firms need new capabilities — both in-house and through outsourcing — as technology solutions increasingly involve collaboration with third parties.
Despite increasingly available on-demand talent, most institutions still rely primarily on full-time and part-time employees. Among respondents, contractors comprise just 9% of the workforce and gig-economy talent makes up just 5%.
PwC believes that gig economy employees will likely perform 15% to 20% of the work of a typical institution within five years, driven by continuous cost pressure and the need to access digitally skilled talent.
Beyond the gig-economy, crowd-sourcing solutions also were highlighted as key contributors to improve productivity. Crowd-sourcing has more than doubled since 2018 and was cited by 50% of the survey’s participants (up from 21% in the first survey). Eighty percent of respondents who leverage crowd-sourcing believed it added ‘high value’ to their organizations. This is an increase from just 39% 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. COVID-19 and remote working have opened the door to accessing talent outside of a firm’s physical location, including outside of the country,” John Garvey, global financial services leader for PwC US, said. “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.”
“Gig economy workers also add value by immediately bringing the digital skills needed by financial services firms to improve functions such as customer experience and improving institutional resilience while the full-time workforce is being upskilled,” Nicole Wakefield, global financial services advisory leader for PwC Singapore, said.
However, there are challenges for financial services businesses taking on gig economy working which will require overcoming several obstacles. The survey showed that the most common issues cited by respondents included confidentiality concerns (44%), a lack of knowledge (43%), regulatory risk (42%) and overall risk avoidance (37%).
“Many of the most valuable companies in the world share one thing in common: They have embraced the platform economy as a business model,” Garvey said. “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 organizations far more innovative, nimble and cost-efficient.”
Like this story? Begin each business day with news you need to know! Click here to register now for our FREE Daily E-News Broadcast and start YOUR day informed!