Thriving in the Modern Marketplace
The traditional workforce is undergoing a seismic shift. The rise of the gig economy, fueled by freelance platforms and on-demand services, presents a unique opportunity for credit unions. By understanding the financial realities of gig workers and tailoring your services to address their needs, you can not only attract new members but also build stronger relationships with existing ones. Let’s go over a bit about gigonomics and your credit union.
What is Gigonomics?
The term “gigonomics” refers to the economic system built around temporary or freelance work, often facilitated by online platforms. This rapidly growing segment of the workforce includes rideshare drivers, delivery people, freelance writers, and many more. Gig workers enjoy flexibility and independence, but also face challenges like irregular income, lack of benefits, and difficulty securing traditional loans.
The gig economy experienced 33% growth in 2020 and is expanding much faster than the U.S. economy as a whole. About 1.1 billion on-demand gig workers exist worldwide, and 2 million new gig workers emerged in the U.S. in 2020 alone. Statista estimates that by 2027, about half of the U.S. population will have engaged in gig work. Today, 35% of U.S. workers are involved in the on-demand gig economy.
Forbes, Marcin Zgola 2021
We see it is rapidly growing and those are a lot of potential members who are going to need less traditional banking as their income will fluctuate more than most members who have a traditional 9-to-5 job. We also found a fun infographic with all types of statistics on the gig economy you should check out!
Understanding the Gig Worker’s Landscape
Gig workers often face irregular income streams, making traditional loan applications a challenge. Their financial picture might not be accurately reflected by a FICO score. Additionally, many lack access to employer-sponsored benefits like health insurance and retirement savings, creating a significant financial gap.
Tailoring Solutions for Gig Success
To empower your gig worker members, consider these strategies. Develop alternative methods for creditworthiness assessment, looking beyond FICO scores and utilizing income verification and cash flow analysis. Design loan products suited to unpredictable income, such as short-term lines of credit or income-based repayment options.
Financial education is crucial. Offer workshops or resources specifically focused on budgeting, saving for retirement, and managing taxes in the context of gig work. Partnering with local businesses to provide discounts on essential services like phone plans or co-working spaces can offer further value to your gig members.
Marketing to Attract New Members
Reaching potential gig worker members requires a targeted approach. Partner with gig platforms or co-working spaces to promote your services directly. Highlight your commitment to financial inclusion, personalized service, and understanding the unique needs of gig workers in your marketing materials. Ensure your website and mobile app are user-friendly and cater to the on-the-go nature of gig work.
Building Trust and Deeper Relationships
Building trust is key to attracting and retaining gig worker members. By demonstrating a genuine understanding of their financial landscape, you position your credit union as a valuable partner in their success. Consider going beyond transactions. Host events or workshops specifically for gig workers to connect and share resources. Partner with local organizations to advocate for policies that benefit gig workers, such as portable benefits or tax breaks.
By embracing the gig economy, your credit union can become a financial haven for a thriving segment of the workforce. You’ll attract new members, foster deeper relationships with existing ones, and empower them to achieve financial well-being, no matter their work style. When you are signing new members, or granting business loans you should be using Oak Tree Business forms for your credit union!
