Navigating the challenges of a gig economy

From freelance Web developers to ridesharing and food delivery drivers, the way Canadians are finding work is changing dramatically with more and more people participating in the gig economy. 

For many young Canadians, gig jobs – loosely defined as working in temporary, short-term or freelancer positions – are becoming a way of life, with long-tenured employment positions becoming harder to find, which has given rise to what many people are calling the Gig Generation.

Indeed, nearly three quarters (73%) of Canadian millennials say that they have, had, or anticipate having, some form of gig job, according to a new survey from TD Insurance.

And while many Canadians enjoy the flexibility and work-life balance associated with gig jobs, nearly nine in 10 reported concerns about their employment in the gig economy, citing critical factors from a lack of health and dental benefits to income volatility.

Of course, without the commitment of full-time employment, many workers in the gig economy are left without the same benefits as full-time employees, including shared retirement contributions, health insurance, or even life insurance. At the same time, their needs and risks can change on a month-by-month basis, further complicating their ability to plan for their financial future.

“Gig jobs may not offer the protections and benefits that full-time employment does, and because of this, gig workers may assume higher levels of financial risk,” Mark Hardy, AVP, Direct Life & Health, TD Insurance, said.

“Life insurance, for example, is not just about a death benefit protecting loved ones; life insurance is also an integral part of a comprehensive financial plan. It’s important to know that the younger you are when you buy life insurance, the less you will likely pay for your coverage and your premiums will not increase for the term you choose.”

While nearly eight in ten millennials consider life insurance to be an important benefit, only a fraction receive coverage through their gig job. Canadian millennials also expressed that lack of job security (61%), income volatility (41%), no paid vacation time (38%) and no pension (32%) are other concerns with working gig jobs.

In its 2017 report, Pervasive and Profound: Impact of Income Volatility on Canadians, TD found that Canadians with unpredictable monthly incomes are more likely to experience financial challenges and stress today, and to lack confidence in their financial future. Specifically, the report finds income volatility is more likely to be experienced by Millennials, particularly women and those aged 18-24.

With the gig economy here to stay, it’s important for those working in gig jobs to plan and prepare in order to be able to continue to adapt to the changing employment landscape.

For those who have, or are considering a gig job, here are a few helpful tips to help navigate some of these challenges:

  • Start building your financial know-how: When it comes to money, a little knowledge can go a long way. Everyone’s financial picture is different. Developing financial literacy skills such as budgeting, saving and investing can help you make better financial decisions with confidence. To help improve your money skills, TD offers various educational tools and resources online.
  • Prepare for the unexpected with an emergency fund: Major expenses have a way of happening when you least expect it, leaving you strapped for cash. To prepare for any surprises, start building an emergency fund that could pay your rent and daily expenses for a few months.
  • Save for retirement: Contribute what you can to your retirement savings. Speak with your financial advisor about options for growing your money that best suit your needs.
  • Starting younger is less expensive: The best time to buy life insurance is as really as early in life as you can. The cost of life insurance can vary depending on how healthy you are, so it’s a good idea to purchase life insurance when you are young and healthy – and keep it – to guarantee that you will be covered no matter what happens to your health in the future.