A shift in the labour market to contractual or on-demand employment is the “new normal” for Canadians, according to a report published by BMO Wealth Management on Monday. Labelled the “gig economy,” this trend encompasses temporary employees of all ages and spans all sectors, including accounting, engineering, human resources and information technology.
According to Statistics Canada, as of September 2017, 2.18 million Canadians were considered temporary workers, which includes freelancers, contractual workers, consultants or virtual employees.
A survey of 1,000 small-business owners, commissioned by BMO Wealth Management, aimed to identify why workers chose to be self-employed. Personal autonomy and control was cited by 49 per cent of respondents as the top factor. Other factors included the ability to make extra money (49 per cent), and a means of balancing career and family needs (42 per cent).
The report showed that self-employment has a different appeal based on generation:
- 54 per cent of baby boomers stated they voluntarily chose self-employment compared to 60 per cent of millennials;
- 37 per cent of baby boomers stated they needed a change or a challenge compared to 49 per cent of millennials.
The global financial and economic crisis in 2008 played a role in the evolution of the gig economy, according to the report. It added that the crash influenced the employment opportunities available to Canadians.
A Statistics Canada survey published in April 2017 found that for some, this model of temporary employment was driven by necessity.
Results from Statistics Canada’s “Annual review of the labour market, 2016” showed that 27 per cent of respondents stated that temporary employment was the only means available to make an income, and an additional 27 per cent said they were searching for a better job as they continued to work on a temporary basis.
Advancements in technology have also made this labour force model possible by giving employees the ability to work virtually.
Companies have found benefits from the labour market shift. Temporary workers are used to supplement permanent staff where additional skills are needed. The report indicated that part-time workers are becoming less prevalent than contingent workers.
But along with the benefits of having the choice and flexibility of when, where and how you work, the BMO Wealth Management report stated that there were drawbacks. Those include fluctuating income, lack of employment insurance or health and medical benefits, and an ineligibility for employer retirement plans.
“This makes it hard to budget, manage debt or save for long-term goals like retirement – in other words, to achieve financial wellness – with a sense of freedom and confidence,” it stated.
Kristen Spruit is a Calgary-based Troy Media business reporter.
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