Given the increasing number of professionals picking and choosing contracts case-by-case, has the time come for freelancing to take its place as the ruling employment option?
It could be argued freelancing is the new entrepreneurialism. Given that, according to research commissioned by the freelancers’ association PCG and conducted by Professor John Kitching of Kingston University, 85% of the jobs lost during the recession were replaced by people going into work for themselves, it’s fair to say that start-ups and freelancers are two halves of the coin that’s replenishing the nation’s coffers. The recent National Freelancers Day on November 21, crowned by a live debate between Sir Peter Ibbetson, chairman of Business Banking at Natwest and RBS, and Jayne Atherton, business editor at the Metro, shows the extent to which serious business figures are championing how vital freelancing is to the economy.
And this is no empty rhetoric. The PCG research also demonstrated that freelancers contributed £95bn to the UK economy in 2012. “There is now a growing realisation of the importance of freelancing,” says Simon McVicker, director of policy and public affairs at the organisation. And it’s not just Britons that have embraced the value of freelancing: from 2004 to 2012, Europe saw an overall increase of 63% in the number of individuals selecting their own contracts. McVicker adds: “There has been this overall trend in the percentage of people working freelance going up, really since the early 2000s.”
Evidently, recent economic troubles have had an impact on the number of people looking to freelance. “When we went through the recession, people who lost their jobs didn’t go down the traditional route,” explains McVicker. “They decided ‘let’s go out on our own and see whether we can do something by ourselves’.” As with the number of entrepreneurs who took the impetus of an uncertain financial situation to seek a more fulfilling path, plenty of freelancers’ new careers were the silver lining to the stormy clouds of the credit crunch.
This is having a very real impact, not just for the economy but also for the professionals themselves. “I’ve seen that British freelancers are earning nearly a third more than they were in 2011,” says Gary Swart, CEO of international freelance marketplace, oDesk. “On oDesk we’re seeing the average freelancer’s earnings have grown 190% in three years.” The result of this is that not only are people able to stay in work but they are actually in a better position than they were prior to the financial crash.
But there are other factors at play. First of all, McVicker feels stage of life can play a role. “A lot of young people don’t want to go through the traditional route of ‘get a job, work for somebody else’,” he comments. The old paradigm in which a person swears fealty to a single firm for ever more has well and truly crumbled. “They want to try and start up themselves and create something.”
Equally, there is a reaction among the older generation who have perhaps paid their dues in terms of loyalty to a specific company and now feel freelancing could provide them with an opportunity to stamp their own mark. “They may well have learnt their skills and now think they would rather like to take this opportunity to go it alone,” says McVicker. Additionally, there may be individuals approaching retirement age who actually don’t want to head straight to the golf course. He continues: “Older people who don’t want to retire are also seeing this as a good alternative.”
But, of course, there’s a silicon-infused elephant in the room. “Technology has been hugely significantly in all this,” says McVicker. “People are able to work using their laptops or their iPads, they can work online, they’ve got social media. We’re going through a sociological change and I think that’s down to the technological revolution we’ve gone through.”
Whilst for decades freelancing has been a significant tool for many different types of workers, it seems unlikely the flexibility and ease with which modern freelancers are able to secure work would be possible.
“Historically it’s been very gig-based, where a freelancer felt like they had to go out and fight for every meal,” says Swart. Fortunately, tools such as oDesk are making it far easier than ever before for freelancers to pick and choose contracts suited to them. “The internet is breaking down barriers and bringing clients into the UK that normally UK freelancers wouldn’t be able to get a job with,” he continues. “With more than 125,000 oDesk freelancers in the UK alone, you’re truly working for clients all over the world.”
It’s relatively easy to understand why this offers better returns in terms of your take-home, but there are subtler benefits up for grabs. “These workers are becoming more skilled,” says Swart. Rather than being required to divert attention to ancillary tasks, individual freelancers are able to focus on the exact areas in which they specialise and choose the briefs that help support their personal goals. “They’re growing and developing because they’re working on the jobs of their choosing with the freedom and flexibility that they want.”
There is a question, however, that might lurk on the lips of an individual without experience of the world of the freelancer: what of security? Given a contract guarantees long-term employment and freelancing offers no such protection, why are individuals switching over in their droves, especially in such uncertain economic circumstances?
Intriguingly, there is a causal relationship between these two factors. “All of your eggs aren’t in one basket,” comments Swart. He refers to a US-based customer of oDesk who lost her job after being diagnosed with cancer; upon her recovery she decided not to re-enter the workplace and now freelances for six clients. And, in actuality, this means she is in a far more secure position, even if issues arise with an employer. “If one lets her go or she decides she doesn’t want to work with that client, she still has five clients.”
Taking into account the fact that it offers employers increased flexibility, freelancers more money and resilience, and has injected much needed cash into the economy, are we going to start seeing freelancing taking over as the norm? According to the findings of another piece of research conducted by PCG in December 2012, this time in conjunction Professor Andrew Burke of the Cranfield School of Management, probably not.
“One of the findings was that these bigger companies that take on freelancers actually in the end create permanent jobs,” explains McVicker. “They try out different things using freelancers and when they realise it’s going to work, they take on permanent employees.”
This is something affirmed by Swart. A survey oDesk conducted with its users asked, if they hadn’t been able to use global freelancing platforms, whether they would seek to fill the positions locally. Just 15% said they would. “This is lift not shift,” he explains. “These aren’t jobs that are going away because freelancing exists; these are new jobs that exist because of platforms enabling it.” And this doesn’t mean that the potential for long-term relationships doesn’t exist, with regular freelance arrangements emerging. He continues: “Knowing how difficult it is to find great talent, when companies find great talent they want to keep it.”
This is perhaps the real strength of freelancing. It isn’t a mechanism that further intensifies the scrabble for jobs by shifting UK roles abroad: instead it provides a testing ground to float new projects and departments with less risk to the firm. And the increased flexibility and wages are also proving popular with those that have set up for themselves. “Freelancers love the freedom and flexibility of working this way,” concludes Swart. “They just like it better.”