Tackling the Future of Work with Portable Benefits
This past June, I decided to leave my full-time job as a management consultant to join the 34% of Canadian workers that are employed in the non-standard workforce (i.e., not in a permanent full-time job). While it’s been an exciting career transition for me, this shift has also raised many unfamiliar anxieties on my own financial stability and future: Can I go to the dentist without benefits? What type of insurance should I be getting? How can I plan for retirement?
Traditionally these questions are ones that employers deal with in the form of sick day policies, health insurance, retirement plans, etc. The nature of work, however, is changing. With the rise of the gig-economy and contract work, more and more Canadians are finding themselves without the traditional benefits provided by employers. This lack of a social safety net amplifies the instability and low-wages that many in the non-standard workforce experience. In fact, of OECD countries, Canada is amongst the worst in both the rate of poverty for non-standard workers (35% in Canada vs. 22% OECD average) and in the hourly pay gap between standard and non-standard workers (A non-standard worker earns only 57% of a standard hourly wage in Canada vs. 75% on average in OECD countries).
With my current work at Innovate Financial Health and Social Capital Partners, I’ve been exploring the intersection of how work is changing and how this influences the ability for Canadians to live financially healthy futures.
One idea that has gained traction around the world is that of portable benefits — benefits that are not tied to any particular job or company but to the individuals themselves. Technology leaders such as the CEOs of Uber, Etsy, and Instacart have all expressed their support for the idea and across the world, we are starting to see new exciting models being piloted and launched.
One example is Alia, a portable benefits tool designed for house cleaners in the US. Similar to workers in the gig economy, most domestic workers are paid by multiple employers whom have little incentive to offer benefits. For $5 per cleaning, Alia pools voluntary contributions from clients that can be used to redeem benefits ranging from paid time off, accident insurance, illness insurance, life insurance, and disability insurance. The product is currently in beta-testing so while its difficult to report the extent of its impact at this point, it’s clear that Alia has the potential to provide workers in need with a social safety net and increased economic security.
In Canada, a new initiative called the Common Good Retirement Plan was announced in May. The Common Good plan is a national portable retirement plan for Canada’s 1.7 million non-profit workers, almost half of whom work part-time or on contract. Many of these non-profits are small and lack the financial resources to offer formal retirement programs. By pooling these workers together, the Common Good plan will allow all workers to continue saving for their retirement regardless if they moved or changed jobs.
These are just two examples of how new portable benefits systems are exploring ways to provide non-standard workers with increased economic security. As the nature of work continues to change, Canada, as a whole, will have to figure out how to enable all workers to be financially healthy regardless if they are full-time, part-time, self-employed, or on contract. Portable benefits can be one way to do so.
While you’re here, I’m currently working on a project with Social Capital Partners called the Future Work Awards. Our goal is to find and recognize the best innovations around the world that prepare individuals for the future of work. If you have any innovations in mind, please submit your nominations here by September 21st 2018.
Otherwise, if you are interested in connecting to talk more about the future of work and/or financial health, please feel free to reach out at elvis.wong@innovatefh.com.
Editors Note: The same day I posted this article, Sara Horowitz from Freelancer’s Union announced the launch of Trupo, disability insurance for freelancers. Check out the launch announcement here.
Elvis is an ex-management consultant passionate about innovation, social impact, the future of work, and financial health. He is currently working on two projects:
Elvis is working on launching Innovate Financial Health, a non-profit organization focused on creating and scaling innovative solutions that improve the financial health of Canadians, particularly those that are the most financially vulnerable.
He is also working with Social Capital Partners on the Future Work Awards to recognize the best solutions from around the globe that are helping prepare the workforce for the future.
