How to improve a gig economy worker’s ’employee benefits’

By Matthew Jackson, VP of Proposition and Client Solutions at Thomsons Online Benefits

The UK’s booming gig economy now accounts for 4.7 million workers. It has more than doubled in size over the past three years to include a huge variety of roles, such as driving for Uber, delivering for Deliveroo, or tackling various jobs for Task Rabbit. When choosing to be a gig worker rather than a traditionally employed employee, one of the compromises made is to forego the protection and economic security that employee benefits provide. It’s currently difficult for workers in the gig economy to receive traditional workplace benefits. But signs suggest that this is starting to change, and technology can help.

The compromise gig workers make

The mechanisms to offer comprehensive benefits to gig economy workers don’t yet exist due to a number of factors, including legal loopholes and question marks over the status and rights of workers. Whilst previously classified as independent contractors, the tide is changing: in a landmark gig economy ruling last year, the Court of Appeal upheld a ruling that Uber drivers are workers and thus entitled to basic rights such as holiday pay and minimum wage.

Additionally, insurance providers and corporations have yet to find a way to bring traditional offerings to non-traditional workers. Currently, in order to receive benefits, workers would likely need to enter into a more traditional employee-employer relationship which means they lose a certain degree of flexibility. However, courier company Hermes this year agreed to offer drivers guaranteed minimum wages and holiday pay in response to a case brought forward by the GMB union. Such developments could re-classify these workers and entitle them to benefits in the future.

A benefits provision shift is possible

Since the inception of employee benefits, most workers have been entitled to a certain level of protection and economic security. Workers in the gig economy present companies with a conundrum regarding whether they should or can receive the same levels of protection and economic security as fully employed individuals.

The market is changing, and we cannot ask gig workers to compromise on protection and economic security, simply because they are looking to a non-traditional form of employment for greater job satisfaction. Employers are already starting to look for ways to support gig workers in a comparable way to the traditional workforce. This includes extending non-insured benefits and perks. For example, wellness pots where employees can spend money on activities that have the biggest impact on their personal wellbeing, like a gym membership or therapy sessions.

The big question now is how the market – organisations leveraging gig workers and benefit vendors – evolves to provide benefits that are fit for purpose, resulting in protection and economic security for the fast-growing gig economy.

Technology for the future

The benefits industry has experienced an explosion in the use of technology – from encouraging administrative efficiency, to risk mitigation and creating exceptional employee experiences. Organisations are incorporating technology to make it as easy as possible for employees to interact with their benefits wherever they are working. This is an important opportunity to engage gig workers, who are generally not office-based, with the broader benefit initiatives that they have access to in the absence of traditional insured benefits.

With the rise of artificial intelligence and disruptive technologies like blockchain, the individual insurance market could become more robust, providing increased quality and value for gig economy workers. As the gig economy continues to grow, this could mean a large portion of the future workforce bypassing the group insurance market for their protection and security needs. In the same way that our housing or banking considerations are not typically tied to our employment – imagine your benefits following you from job to job.

There is a lot of uncertainty for gig economy workers right now when it comes to how they are classified and what benefits will be available for them in the future. As the work model shifts in the UK, it’s important that all workers continue to have access to protection and economic security. Technology remains at the forefront of the future of employee benefits and companies need to take advantage of it to keep their gig economy workers happy in the short term. Meanwhile, the market as a whole needs to look at the potential for technology to disrupt the benefits industry –  with gig workers at the heart of that.