Gig economy and technology challenge workforce strategy
Companies need better strategies to manage the growing use of ‘non-traditional’ labour, including freelancers, contractors and ‘gig’ employees, while technology is changing the nature of the skills required in all sectors, including accountancy, according to two recent surveys
4 Apr 2018
Deloitte’s global human capital trends survey revealed just 17% of UK companies have policies and strategies in place for the use of ‘non-traditional’ workers, yet 42% of UK business leaders expect to see a rise in the use of contractors by 2020, while 41% foresee an increase in freelancers, and 34% expect a growth in gig workers.
Only 66% of HR teams say they are involved in onboarding non-traditional workers, and only half offer training for these employees. A third say they do not assess or manage the performance of non-traditional employees.
Despite this, 42% of organisations report worries about the loss of confidential information due to the use of contractors, while 31% worry about the instability of the non-traditional workforce and 42% are concerned about violations or changing government regulations in managing or categorising these workers.
Anne-Marie Malley, UK human capital leader at Deloitte, said: ‘Businesses should work to give gig and contract workers clear performance goals, secure communication systems, and the right amount of training and support to make them productive and aligned with the company’s strategy.’
Deloitte’s research also shows companies are preparing for the deployment of new technologies to sweep their businesses in the coming years, with 83% expecting AI and cognitive technology to have an impact on the composition of the workforce by 2020 and 33% saying that they have already done so.
As a result, 69% say complex problem-solving skills will be important in the workplace, while 61% cite technical skills and 60% seek cognitive abilities. However, only 12% plan to train their current workforce in these areas and 43% say they do not have a plan to cultivate these skills.
Separately, research by software supplier Xero found that despite the commonly perceived threat of technology taking jobs away from accountants, the opposite is true. Its survey of over 900 practices found that 81% of small firms serving more than 100 cloud clients are actively looking to employ more staff, compared with just 49% of firms with fewer than five small business clients using online accounting.
The trend continues for mid-sized firms, where 90% of firms with more than 300 online accounting clients are looking for new staff compared with 59% for firms with fewer than five.
The demand for tech-savvy online accountants has also resulted in increased revenue per employee for cloud-based firms, as well as higher compensation packages for employees within firms that are adept at using technology to serve their clients. Practices with 6-35 online clients achieve an average revenue contribution of £65,000, while firms with between 100-299 achieved an average of £115,000.
Furthermore, technology is enabling the transformation of the role of the accountant to that of the connected business advisor. The report found that practices providing advisory services earn considerably more revenue per client than firms purely offering compliance (£6,990 vs £4,200).
Damon Anderson, director of partner at Xero, said: ‘We’re seeing an increasing number of practices embracing cloud technology, particularly in the lead up to Making Tax Digital. Our research shows that rather than putting an accountant's job on the line, cloud technology is enabling significant growth and as a result, revenue is increasing, teams are expanding and roles are evolving.
‘Practices are diversifying their offering beyond just compliance into the realm of business advisory and seeing real growth. The cloud has been instrumental in this journey, freeing up time for accountants to develop their skills further as they do more to help small businesses prosper.'
Report by Pat Sweet