This is an interesting angle from our partners ETZ Payments about how fears of inconsistent payments are stopping a third of British workers making the switch to freelance from 9-5 despite knowing that they could earn more money.
A recent study by the University of Hertfordshire and TUC, reported that the size of the gig economy has doubled in size over the past three years and now accounts for 4.7 million workers with one in 10 working-age adults now working on gig economy platforms (up from one in 20 in 2016). The freelance and flexible work arena is not only growing but offers huge boosts to the British economy. The flexibility offered by Britain’s freelancers is worth £21 billion to the UK economy in added value.
Despite the common misconception, that gig economy is limited to low-skilled employment, this is not the case. Many highly-skilled workers in creative and professional sectors, such as graphic design, accounting and law are making the switch to freelance work under terms such as designers, consultants and project managers. The switch to freelance is made for a multitude of reasons including to help make more time for parenting, to spend more time on much loved hobbies, to achieve a better work/life balance or because they can work multiple jobs making it a lucrative option.
ETZ Payments has conducted research – across a survey of 2000 Brits – which has found that over a fifth of Brits switched to working freelance from the traditional 9-5 to achieve a better work/life balance, and now feel happier as a result. Furthermore, research from Deliveroo found that 44% of gig workers are educated to a university degree level and Ipsos Mori found that over a quarter of gig economy employees perform ‘professional work’ and work as contractors giving accounting or legal advice.
However, many Brits are being dissuaded from pursuing a lucrative freelance career due to the late and inconsistent payments that blight the arena. ETZ Payments carried out a nationally representative survey across 2000 British workers and found the following:
- 30% of Brits think that they would earn more if they worked as a freelancer, but they choose not to due to inconsistent payment structures
- This applied to 34% of middle-class workers (ABC 1 workers)
- 13% of Brits spend four hours and above a week chasing invoices
- This applied to 15% of middle-class workers
- 15% of Brits think the biggest issue they’ve faced as a freelance worker is chasing invoices
- This applied to 15% of middle-class workers
The trend of people being deterred from working in a freelance capacity due to late and inconsistent payments was found to be highest in London, with 54% of the capital saying that they would earn more if they worked as a freelancer, but they choose not to due to inconsistent payment structures.
The late and inconsistent payments that lie intrinsically within the gig economy do not only put off salaried workers from working in a flexible capacity, but they also regularly disrupt freelance workers and cause significant financial strain. The same research from ETZ Payments found that 15% of flexible workers have had to turn to short-term finance solutions such as pay day lenders due to inconsistent payments from their freelance work, this grew to 17% of middle-class workers. Again, this trend was greatest in the capital with a third of Londoners saying that they have had to turn to short-term financial solutions due to inconsistent payments within the gig economy.
The gig economy offers lucrative work to a range of highly-skilled workers who are employed in a range of industries including technology, healthcare and finance. It is extremely disheartening that millions of people are being dissuaded from pursuing a freelance career despite knowing that they will earn more money from it and it is terrifying that people in the freelance arena are being pushed to borrowing money because they are not getting paid on time.
The payment systems in the gig economy need to be overhauled so that late payments are a thing of the past and more people can convert from the 9-5 to working flexibly. In the same way that we bank, shop and transfer money in today’s modern technological age, employers should be able to pay freelancers at the touch of a button in a process that lasts mere seconds. This is not only beneficial for the employees, but it will also help employers to retain highly-skilled talent that wish to work flexibly. As well as helping individuals, it will help to support the boost that the gig economy provides to the overarching economy.
About ETZ Payments:
ETZ Payments provides super-efficient, streamlined back office software for recruitment agencies, turning timesheets into invoices in just 60 seconds. For businesses, it allows users to focus on customer service rather than admin while eliminating errors. For workers, ETZ Payment’s systems allow for payments to be processed faster, making flexible working more appealing and reliable for the UK’s changing workforce.
