The present state of employment today is one that most would never have predicted twenty years ago. Sure, some foresaw working remotely, but most did not predict the swift decline of corporations and companies to take on salaried workers. In tandem with the rise of the internet from the early 1990s, there has been a shift in the workforce from those holding salaried positions in 1990 to today where the freelance workforce is quickly taking over.
Today more than one-third of the US workforce is freelance and this number is expected to rise steadily in the coming years. The number of American freelancers has increased by 3.7 million since 2014 and 74% of the freelance workforce started freelancing in the past 5 years. What this means is that workers, while perhaps having more independence, are caught within machinery where certain rights are virtually non-existent. Long gone are the days of mandatory paid leave as was underscored last week by HoneyBook, a business management platform for entrepreneurs and freelancers. Its study examines the vacation habits of freelancers in the US and found that 92% of freelancers work on vacation. While some are finding that freelancing liberates them from salaried careerist impediments that most women face, for instance, there are finding that freelancing is helpful for them in returning to the workforce where there is a necessity to have a flexible work schedule.
Certainly, the market response to the changing job market has produced myriad companies which hire online workers from Fiverr to Freelancer.com with some in this industry predicting that salaried jobs will soon be a thing of the past. In addition to platforms which provide freelance workers to those hiring and jobs to those looking for work, there is a rise in applications meant to assist the freelancer with all the bureaucracy associated with independent work. Nodal is one such company that has risen to the challenge and offers not only the bureaucratic bells and whistles of timesheets, bookkeeping and guaranteed weekly payments through ledger technology, but it will also use an AI-led algorithm that will allow employers to search for talent via multiple data points, matching the best freelancers for the right job. Oliver Hibbs-Brockway, CEO of Nodal, recently told me that his company “disrupts the traditional recruitment market that operates in inefficient silo infrastructures and offers a hassle-free marketplace for both recruitment and freelancing.” Like many others in the world of online recruitment and freelance solutions, he believes that the culture of online work will become the more typical workforce model of the future.
However, freelancers face more pressing concerns than simply no holiday leave. There are studies which show that there is serious concern regarding access to healthcare and retirement plans which are often the top reasons why people stick with employment contracts. But it’s not as if working as an employee is free from its own set of problems today. Struggles for pay equity that women face and the need for workers’ compensation for blue-collar jobs are just two of the areas that make salaried employment undesirable for some. Additionally, for those unhappy with some of the pressures of salaried employment, many are uncertain if to let go of the many of the benefits that full-time employment offers.
Earlier this week, I spoke with Mark Larson of Larson, Larson & Dauer where he covers workers’ compensation cases. Larson tells me, “The entire workers’ compensation system, like everything, is political and due to the insurance companies unlimited money to lobby for legal changes that protect their own interests, the system is becoming highly complex and much worse than it has ever been.” Critiquing the system overall Larson tells me that if the workers’ compensation system were allowed to function as was its original design, there would be fewer claims and bureaucratic processes than result in low settlements. In fact, just last month the discussion around freelancers and workers’ compensation came to a head in California where businesses are being challenged by a potential law which would make it harder for them to classify workers as independent contractors in order to avoid paying unemployment insurance taxes and workers’ compensation premiums.
Still, many freelancers and independent contractors are highly skilled professionals who work in creative fields, information technology and copywriting and they are less likely to be injured on the job. In fact, the field of freelance work is quickly expanding. One recent boom in online freelance work has been in the field of tutoring which now includes Hong Kong startup Snapask and Cluey Learning based in Australia, among dozens of other online tutorial companies which rely almost entirely on the freelance workforce. While many argue that online tutoring is changing the face of learning, it is also changing how teaching is performed and how tutors are now self-stylized gurus working from the convenience of their home while, in some cases, being handsomely paid. In India and China where education is highly prized, apps linking students to online tutors have made a billionaire of Byju Raveendran, founder of BYJU’s which managed to snag Shahrukh Khan as the public face of the company. Still, there are concerns that even tutors will be prey to the same financial burden that freelancers in other professions face from unemployment insurance, healthcare costs and pensions.
For the freelancer, these costs either have to be taken on independently or skipped entirely placing the freelancer in an economically precarious situation in the case of injury. Yet, there is light at the end of the tunnel as more and more freelancers and those working the gig economy are being entirely employed through the internet such that Deliveroo, Uber, and other online platforms in certain countries are being made to carry the responsibility of these workers. Last week a Madrid court ruled that Deliveroo couriers are not self-employed but are employees. Given the recent legal battles of the same in the UK with Uber drivers where Uber lost its case in December and are entitled to workers’ rights, we are seeing a turnaround in how the gig economy and freelancing might work in the future from a legal and fiscal standpoint. And this too will have repercussions socially and culturally beginning with, as the Uber case in the UK challenged, how much the individual worker controls her schedule and how much does the online company hold her to a specific schedule, just for starters.
While the gig economy is said to be booming according to some experts, there may be blowback to the recent court cases in London and Madrid concerning gig economy workers from larger corporations with money to burn in courtroom battles. Some companies are getting ahead of the problem with Google having recently announced that partnering companies would have to pay contract workers a minimum wage of $15 per hour in addition to health benefits. Others, however, are mute on this point riding the wave of whatever benefits they can reap from this situation. And still some view this economy as something that will not go very far due to the overall lack of labor protections and bargaining rights that those workers in unions maintain. Online freelance work is expanding, but to what degree this sector of the labor market is integral to our work culture is yet to be seen.
