24 Oct 2018

Running a sustainable business in the gig-economy

Sometimes it's easy to forget that sustainability is not just about the environment and the climate - it's so much more. In this blogpost, our partners at Nordea wants to highlight the health perspective of sustainability. How can the way a business is run impact our health, and how will it change in the future? The text is written by the people at Nordea Life and Pensions Sweden, enjoy! 

The level of long term illness is a threat to a sustainable society. Businesses today are doing their best to handle the challenge. But in the era of digitalization, the definition of running a business is changing. Do we even have the right tools available for running a sustainable business?

Sustainability is so much more than climate issues. It is also about our health, as individuals. To be able to live a long life and to support oneself economically throughout all the stages in life. The responsibility for this challenge has changed over time. Previously we very much relied on the government to provide, but now it is becoming the responsibility of the individual and even more, the responsibility of the employer. The consequence of this shift, is that more employers feel the need to have a business that takes care of its employees’ health and wellbeing, to run a sustainable business. But there are challenges.

“...more employers feel the need to have a business that takes care of its employees’ health and wellbeing, to run a sustainable business. But there are challenges.”

Sick leaves on all time high

Even if the increase in sick leaves has somewhat haltered, they remain on levels that are all time high. And the number of long term sick leaves (more than 2,5 years) have increased the last few years. This is a problem not only for the individuals that are affected but also for the companies and for the society as a whole.

As one of Europe’s largest bank we have the privilege of meeting many business leaders. We see the challenges that they face. But we also know that there are concrete tools that can be used to create a sustainable business. We work together with different insurance companies to ensure that our corporate customers get the support they need to ensure a good process in case of accidents or illness among employees. Both in terms of economical safety but more important, a fast and smooth process to get the employee back to work. But that is not enough. If we are to ensure a sustainable society, we need to reduce the number of people that enter illness. Insurances can provide the business leader with assistants to map the general welfare of the staff. It can also provide professional counselling for the staff to use if they feel the need. These are all powerful tools to identify and avoid health issues in advance.

We know that these tools are quite commonly used among larger companies. But if we look at self-employed the situation is different. Only 30 to 40 percent in this group have the appropriate insurance protection and as many as 40 percent say that they worry about what would happen economically if they were to fall into long-term illness or not get fast access to healthcare.

New trends create new challenges

One reason for this development could possibly be found in two ongoing trends. The growing gig-economy and the “involuntary entrepreneurs”. Changes in our society, new customer behaviors, new technology and digitalization has created the foundation for a new type of business people, the so called giggers. This is people that support themselves as freelancers or independent contractors and often take on short term jobs or even have several different jobs at the same time. Among these giggers you can find a sub-group of people we can call the involuntary entrepreneurs. This is persons who rather would have the security of a traditional employment but for different reasons cannot get one and therefore have no option but get their income as a freelancer.

The challenge within these two groups is that they have a different behavior and different needs compared to the more traditional company when it comes to insurances. Their needs often vary over time depending on work situation. But also, they often have less knowledge of what they need to do to ensure their security.

The whole definition of running a business is going through fundamental changes. How we defined a business or a company before, may not be true tomorrow. The borderline between employment and self-employed is becoming more blur. Already today, self-employed are an exposed group in society, (self-employed are overrepresented among people with the lowest incomes) and we must critically scrutinize the established models for creating a sustainable business environment. We have to find new channels to spread knowledge. And create new tools to provide security in a society where individuals have greater mobility and move between different solutions to secure an income. If we fail, we will see a development where more people in our society, will suffer from non-sustainable businesses.

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