“Xennials” and the Gig Worker Movement

By Matthew Bahl, JD

Director, Health & Productivity Analytics
Prudential Group Insurance

By Kristin Tugman, PhD

Vice President, Health & Productivity Analytics
Prudential Group Insurance

Individuals born between 1977 and 1983 comprise the so-called “Xennial” microgeneration. This group bridges the gap between the Gen X skeptics and the tech-savvy Millennials.

They didn’t grow up with technology, but readily adapted to its arrival during their college years. Entrepreneurial and innovative, Xennials turned toward the developing “gig” economy during the dot-com bust of 2000 and 2002,¹ but now all generations participate, especially those entering the workforce. This rise of the gig economy presents employers’ human resource and benefit programs with unique, important challenges.

While estimates of the size and growth of gig employment vary, it seems evident that gig workers are here to stay. One report estimates that gig work arrangements comprised 16% of the workforce in 2015, up from 10% in 2005.² Gig workers are not just Uber drivers, either. Under this model, workers are independent contractors providing services through technology-enabled platforms; some more traditional employers are outsourcing certain tasks to gig workers.³

Gig work has advantages for employers and workers alike. For employers, it converts fixed costs to variable, reduces benefit expenditures, and allows for greater resource flexibility. Workers gain flexibility, the opportunity to be one’s own boss, and the ability to use gig work to supplement more traditional employment arrangements.

However, the gig model also carries challenges for workers, such as an unpredictable work stream, lack of access to benefits, and lower average pay.³ Indeed, research has shown that gig workers have significantly less access to important benefits such as short-term and long-term disability and employer-sponsored retirement plans. Lack of access to these critical benefits makes gig workers particularly vulnerable to unexpected loss of income from a disability event.³

Ultimately, the nature of employment is evolving, with all indications that gig work will continue to expand. Given this trend, employers and other stakeholders need to advance new solutions to ensure gig workers have access to financial and disability protection:

• Gig workers who lack access to employer-sponsored benefits may need a do-it-yourself benefit strategy. Educating gig workers on the value of disability coverage as well as healthcare and retirement services will be critical.
• Employers who use gig workers can offer holistic education programs for gig workers and traditional employees to help close the knowledge gap and guide gig workers into a do-it-yourself benefit portfolio.
• Policy makers should pursue public- and private-sector solutions to help deliver benefit offerings to gig workers. This may help gig workers gain access to more affordable benefits and help reduce potential reliance on government-funded programs.

The number of gig workers is increasing, and the gig economy seems to be booming. Indeed, one recent survey predicts that the majority of the workforce will be gig workers within a decade (including full-time, part-time, and moonlighting).⁴ As employers increase their utilization of the gig economy, they will need new disability, absence, and benefit solutions to support this fast-evolving segment of the workforce.

References

1. M Hunter-Hart. Older Millennials Are Now Calling Themselves “Xennials.” Business Insider. June 29, 2017. Retrieved from http://www.businessinsider.com/what-is-a-xennial-2017-6.
2. Katz L, A Krueger. The Rise and Nature of Alternative Work Arrangements in the United States, 1995–2015. National Bureau of Economic Research. Sept. 2016. Retrieved from http://www.nber.org/papers/w22667.
3. Prudential Financial. Gig Workers in America: Profiles, Mindset, and Financial Wellness. 2017. Retrieved from http://research.prudential.com/documents/rp/Gig_Economy_Whitepaper.pdf?utm_medium=distribution&utm_source=newsroom&utm_content=gc&utm_campaign=gig_workers_pdf.
4. S Kasriel. No, We Won’t All Be Freelancers in the Future of Work. Fast Company. Oct. 24, 2017. Retrieved from https://www.fastcompany.com/40484760/no-we-wont-all-be-freelancers-in-the-future-of-work.