Earlier this week we announced a major partnership with Labour Xchange – a platform which matches blue collar workers and individuals with spare time to companies in need of extra resourcing – to provide, alongside Dinghy, a bundle of digital-age benefits – such as Income Smoothing and Personal Accident Insurance – that will create new safety net for the thousands of self-employed care workers using the Labour Xchange platform.
Labour Xchange, based in Southend in the UK, was founded on the principal that self-employment can be both more flexible and less precarious. The vast majority of self-employed people are happy to be self-employed because it gives them flexibility to manage their schedules and, in the case of Labour Xchange users, to fit work around other commitments. The challenge is that self-employment generally comes without financial security or protection, which is the reason why Labour Xchange has teamed up with Trezeo and Dinghy.
On the back of this announcement, our CEO Garrett Cassidy was invited on the Aperture Podcast, hosted by Ben Robinson, alongside Jonathan Key, CEO and Co-founder of Labour Xchange and Gareth McNab, Co-lead of Open Banking for Good, by Nationwide Building Society. Together they touched on important topics related to the future of work, such as how to marry flexible work with worker benefits and protection, the future of the platform economy (particularly the on-demand labour platforms) as well as how financial institutions can work with fintech startups to help the financially excluded or squeezed.
The main ideas discussed were:
- There is a structural shift of more and more people moving into self-employment
- Flexible work could lead to a better quality of life for many people
- But for many people, flexibility means ever-changing 15-hour contracts that prevents them from finding better work
- The world of work has been changing for the past 20-30 years. People blame technology for the recent negative externalities, but tech is actually the solution
- Platforms are important because they are able to connect, at a low cost and frictionless the spare hours of individuals with various work projects from companies·
- But being a self-employed worker doesn’t mean you should be left on your own. You should have the same benefits and packages that a traditional employee gets.
- Trezeo is rebuilding from the ground up an employee-type bundle of benefits, designed specifically for the self-employed
- Effectively, this gets us to a point where people don’t have to trade their work flexibility for financial security. They can have both.
- Part-time and freelancers has traditionally been a way for companies to cut costs, but now we can actually make it possible for people to work as self-employed but in a prosperous manner
- Platforms that want to survive in the future will need to step up their game and provide access to digital-age support mechanisms for their workers, otherwise they’ll fade
- Most traditional financial institutions don’t really understand self-employed workers: are they retail customers, business customers, what are their profile and needs?
- More information is not necessarily a remedy, meaning that simply giving people more transparent information about their finance won’t mean that they will make the right financial decisions
- With self-employed workers, because of the volatility of projects and income, their mental bandwidth is limited and self-served financial planning is harder to achieve, almost impossible
- Banks should be open to the fact that things have changed. Workers don’t fit into the boxes that they traditionally fitted in. And they either open up to that and recognise that a very different proposition is required, or they take a financial-platform approach of bringing third parties in who can do it.
- Banks and financial institutions get value from services like Trezeo because Trezeo creates the underpinnings for the self-employed to be bankable (through credit score, income smoothing and identifying disposable income etc.) and access other mainstream banking products.
- The government is doing a lot of research of this structural shift, but in general they can’t deploy a new safety net for a market they don’t yet understand. Trezeo is building the blocks, through trial and error, to future collaboration with local and central governments to deploy digital-age safety nets at larger scale
- In conclusion: today’s technology allows to dramatically reduce the costs of servicing self-employed workers, that it is now possible to imagine a completely new safety net for them.
If you want to learn even more about the Labour Xchange platform, the story behind why it was created, the value proposition and why they partnered with Trezeo, watch this inspiring video interview of Jonathan Key, Labour Xchange CEO and Co-founder.