The gig economy has experienced a significant surge in recent years, as millions of people around the world have chosen to work as independent contractors or gig workers in order to improve their income and increase their work opportunities. In fact, more than 59 million American adults (roughly 36% of the U.S. workforce) participated in the gig economy over 2021, showing that the desire for increased flexibility and financial opportunity is winning people over to ‘the gig side.’
However, gig workers face several challenges, including pay variance, that can lead to financial instability. Companies looking to hire gig workers need to focus on helping them solve these financial challenges in order to retain the best gig talent and continue to scale their business. If they don’t, workers have plenty of options to choose from in finding a new gig—after all, a new choice is just one click away these days.
Three main challenges facing gig workers today
Gig workers enjoy many benefits from going freelance: more independence, more freedom, and even improved work satisfaction. However, this doesn’t mean that they also don’t face their fair share of challenges—many of which have financial ramifications. Let’s have a look at a few of them:
Lack of benefits
Since gig workers are not employees, they rarely get access to the benefits that traditional W-2 employees enjoy. This means no paid leave, health insurance, maternity/paternity benefits, or other traditional perks that are set in place to support employees. The fact that gig workers don’t have these means that they likely incur out of pocket expenses for their own health insurance and other benefits, and that they'll be looking for stability and other incentives that make up for this.
Lack of engagement
Another problem facing gig workers today (and the companies that hire them) is a lack of deeper engagement with the company. This can lead to less loyalty which in turn can affect the quality and length of the relationship between the worker and the business. When working with gig talent it’s important to find ways to promote loyalty to guarantee you’re working with the great people that you want, and that you can continue to grow your business in the years ahead.
Financial instability and pay variance
Gig workers carry an extra weight of financial uncertainty due to the pay variance they experience. As Forbes says: “Perhaps the most important thing to provide gig workers with to a degree is more certainty than they currently enjoy.”
According to most gig workers, discrepancy in pay from week to week can lead to difficulties budgeting and managing their finances. The Federal Reserve’s Report on the Economic Well-Being of U.S. Households states that “Signs of financial fragility—such as difficulty handling an emergency expense—are slightly more common for those engaged in gig work, but markedly higher for those who do so as a main source of income.”
Here’s where you can hop in with a simple solution that can help solve your gig workers’ financial challenges while slashing churn rates in the process.The secret? Offering faster gig worker payments.
Prevent gig worker churn with real-time payments
It comes as no surprise that one of the best ways to improve gig worker retention and loyalty to your business is by providing faster payments. Faster pay improves cash flow and gives gig workers the necessary control they need over their finances; a whopping 94% of workers associate faster pay with financial peace of mind.
By offering real-time payments, companies can build stronger relationships with their gig workers, as they are providing a service that makes their lives easier and less stressful. 70% of gig workers saying they would be more loyal to gig economy platforms that pay them on the same day.
With Branch, you can pay your workers as soon as they complete a shift or deliver a project. They don’t even need to have a bank account as Branch offers free digital banking, and by using Branch’s debit card workers can use their earnings immediately, even earning cash back when purchasing groceries, gas, and other purchases.
Aside from decreasing churn for your business, look at the advantages of offering real-time payment to gig workers.
- Reduced financial stress. When gig workers don't have to wait days or weeks to receive their pay–especially during uncertain economic times–they can feel more secure in their finances and worry less about cash flow issues.
- Improved cash flow management. Speaking of cash flow, real-time payments allow gig workers to manage their money more effectively, as they can see their earnings in real-time and plan accordingly–providing them with more financial stability
- Increased flexibility. Faster payments give gig workers the ability to accept work on a more ad-hoc basis, as they can receive payment immediately upon completion of a task.
- Improved tax management. Faster payments help gig workers file their tax documents on time, ensuring compliance and helping them feel more confident and at ease with their legal paperwork.
Branch offers the same platform for W-2 and 1099 workers, payments are made immediately, and there are no fees that strip workers of their hard-earned money. Additionally, businesses can be ready to pay 10 gig workers or 1000 with the same platform–easy and fast.
Keep the gig talent your business deserves
Waiting for weeks or months to receive the fruits of their hard work can be demoralizing for gig workers–and put them at financial risk. Give your gig workers the ability to pay their bills on time and cover any unexpected payments without it becoming a massive headache. If you really want to get the competitive advantage you need to secure the best gig talent—and keep them loyal—faster payments are your new best friend. Click the button below to learn how Branch can help you deliver faster payments to your gig workforce.
