IMA Pulse

Gig Economy Slowly Catching On in Finance

By Kip Krumwiede, CMA, CPA
January 18, 2018
5 comments

If you’ve ever scheduled car service with Uber, booked a stay with AirBnB, or utilized professional services using TaskRabbit, whether you realize it or not, you have transacted within the “gig economy.”

 

The gig economy is a new form of labor by which workers get short-term contracts or freelance work (a gig), as opposed to permanent positions or jobs. Gigs are often facilitated through a digital marketplace on a mobile app.

 

IMA® (Institute of Management Accountants) conducted a survey of senior finance professionals in December 2017 to find out how companies and finance professionals are adjusting to this rapidly changing new work environment.

 

KEY RESULTS

 

The 109 respondents included full-time employees (82%), business owners (6%), and freelancers (12%). Of the full-time employee and business owner respondents:

  • 45% say their organization hires workers through short-term contracts or freelance work (a gig) to work on demand.
  • 46% say their organization doesn’t.
  • 9% don’t know.

 

Of those who hire workers through short-term gigs, only 23% find gig workers through a digital marketplace (i.e., through an app). The rest get their short-term workers through more traditional sources including temp agencies. The average length of a gig is 128 days, ranging from 1 to 545 days, but the median length is 60 days.

 

We also found that of those who hire gig workers:

  • 49% say the gig economy has been good for their company.
  • 54% say the gig economy enables them to hire more experienced freelance workers than less experienced full-time employees.
  • 46% say the online marketplace has made it easier to find people who have the skills they are looking for.
  • 51% say, “I see my company hiring more freelancers in the future.”
  • Those who did not agree with the above statements were generally neutral (or not sure) rather than in disagreement with them.

 

When asked about the most significant challenge their company faces regarding contract employees:

  • 43% said it was finding good freelancers.
  • 33% said it was inadequate support structures and policies for managing freelancers.
  • 21% said it was completion of a project by the freelancer.

 

Of the freelancer respondents:

  • 74% say the “gig economy” has made it easier or somewhat easier to find freelance/contract work.
  • Only 13% find freelance/contract work through a digital marketplace (i.e., through an app). The rest cited personal networks or referrals.

Similar to the responses by those that hire gig workers, the freelancers said the average length of a gig is 124 days, but the median length is 60 days.

 

We also found that, of the freelancer respondents:

  • 57% say the gig economy has been good for them.
  • 70% see themselves finding more freelance work in the future.
  • Only 24% say they make more money as a freelancer than they would as a permanent employee.
  • 43% say their work-life balance is better as a freelance worker than it would be with a permanent job.
  • Only 29% say the digital marketplace makes it easier for them to get freelance work.

 

WHAT TO DO?

 

About half the respondents’ companies hire contract or freelance workers, and only about a fourth of those find them through the digital marketplace. The biggest challenges cited were finding good freelancers, having inadequate policies for managing them, and getting them to complete their projects.

 

To find the best freelancer accountants, it’s important to identify accounting skill needs and a specific job description to increase the chances for a good match. Companies should look for candidates that best meet the description and have a history of success in similar environments and also ask for references of their previous clients.

 

Although the gig economy has made it easier for freelancers to find work, the majority said they would make more money and have a better work-life balance as a permanent employee. They also deal with low to no benefits or retirement plans. To increase their chances for favorable gigs and (if desired) getting hired, freelancers should keep increasing their skills through training and consider diversifying their client profiles to increase their skills, experience, and network connections.

 

Also, they should enhance their brand by maintaining social media accounts, especially professional social media accounts like LinkedIn. It’s beneficial to list current or past projects and examples of work if possible.

 



Kip Krumwiede, CMA, CPA, Ph.D., is the director of research for IMA. He can be reached at (201) 474-1732 or kkrumwiede@imanet.org.
5 + Show Comments

5 comments
    UlieQ January 19, 2018 AT 12:14 pm

    sad. lower pay lower security.

    yuriy ksenidi January 20, 2018 AT 12:10 am

    “IMA® (Institute of Management Accountants) conducted a survey of senior finance professionals in December 2018…” This survey was done in December 2018? Right now it is January 2018 and December is 11 months away. so, what month and year was this survey done in?

    sfadmin January 22, 2018 AT 10:02 am

    Good catch! The survey was done in December 2017.

    RAMJIYAHOO MAHADEVAN January 21, 2018 AT 9:15 pm

    how about Loyalty factor, how an employer covering up the employees loyalty losses, attachment benefits, and loyalty benefits on this

    EW January 25, 2018 AT 9:53 pm

    it is time for the sfmagazine to include an overview of different types of apps that are used in business. apparently there are up to 80 apps that can be used to automate several types of business processes. This is one way accountants can ramp up their skills.