Financial services firms are braced to ramp up their recruitment of gig-based employees but are concerned over the risks such an increase will create.
PwC has issued a new report in a survey that found more than half (52%) of financial institutions say they expect to have more gig-based employees over the next three to five years.
The report, “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. It sought to examine the key workstreams implemented by financial services businesses and evaluated its impact on productivity.
“The upskilling of the workforce is a key element to improving productivity within financial services,” explained the report. “This includes better understanding of 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 said it believed 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.
However, the respondents also raised concerns over the risks that greater reliance on the gig economy will bring.
The survey found that the most common issue cited by respondents include confidentiality concerns (44%), a lack of knowledge (43%), regulatory risk (42%) and overall risk avoidance (37%).
John Garvey, PwC’s Global Financial Services Leader, PwC US, said: “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. 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,” added Nicole Wakefield, PwC’s Global Financial Services Advisory Leader, PwC Singapore.
“Many of the most valuable companies in the world share one thing in common: they have embraced the platform economy as a business model,” added Mr Garvey. “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.”