CPAs and the Growing Gig Economy
As the gig economy continues to expand, both accounting professionals and their clients can use gig workers to gain a strategic advantage.
Digital Exclusive - 2020
Uber drivers and Grubhub delivery people likely spring to mind when you hear “gig worker,” but the term actually describes a much broader and more complex category of workers. Better defined as both short-term W-2 employees and 1099-MISC contractors, gig workers now make up 27 percent of the finance industry and 20 percent of professional, scientific, and technical services in Illinois, according to the ADP Research Institute’s “Illuminating the Shadow Workforce: Insights Into the Gig Workforce in Businesses.” And as this growing segment of employee touches every industry, it offers unique opportunities for CPAs, both within their own organizations and as they expand into the role of the most trusted and strategic business advisor to their clients.
The function of the gig worker in the modern workplace has evolved, and clients are increasingly turning to their CPAs to help them navigate the regulatory, compliance, and compensation issues associated with employing gig workers. But gig workers can also provide much-needed assistance to accounting firms that either can’t or don’t want to hire traditional employees.
Here are two major ways that the gig economy will impact the accounting profession in the coming years.
Flexing the Workforce
As the current workplace faces mounting challenges, gig workers could become critical to ensuring companies remain flexible during times of uncertainty. Even prior to the coronavirus pandemic, workers were increasingly turning to gig work—one in six workers are now classified as gig workers—to supplement existing income or bolster their income in retirement, and businesses must engage and manage these workers accordingly.
What’s more, if the job market faces sustained volatility, CPAs and the businesses they work with that need greater flexibility in their talent pools can benefit by tapping gig workers to properly staff busier seasons while managing payroll costs when the workload is less demanding. CPA firms should take a deeper dive into the unique contributions these workers can bring to a dynamic business, both on the client side and in operations. By making gig workers a part of their regular workforce, CPAs can effectively scale their businesses during some of the busiest times of the year.
Solving the Skills Gap
The AICPA predicts more than 75 percent of today’s CPAs will retire within the next 15 years, with eligibility starting as early as 2020. Compounded with millennial turnover, declining experience levels, and increasing automation, CPA firms are struggling to manage massive losses of skill and talent.
ADP’s research found that 40 percent of gig workers are over the age of 55, and 40 percent consider themselves retired. They are motivated to return to the workforce primarily by love of what they do rather than financial necessity, and their intrinsic drive could provide a deep, passionate talent pool to draw from. By embracing gig workers, firms can easily scale to need talent with specialized skills for specific projects, like short-notice work, commission-based work, or work which would require significant training for new full-time workers.
The gig economy is not a fad—it will continue to grow and change how business is done in virtually every industry. This will not only affect policy at the governmental level, it will alter how employers engage the workforce. Understanding the gig economy will not only help CPAs offer the best strategic advice to clients, it will allow them to use the flexibility and unique expertise of gig workers themselves.
Ahu Yildirmaz is co-head of the ADP Research Institute.