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This shift in how people work developed out of two main things: first, technology has made this type of virtual relationship possible and second, companies and startups began to realize that this arrangement offered significantly more benefits than the traditional employee. Now, terms like “gig economy,” “mobile economy” and “freelance economy” are being thrown around to describe the new way of working.
Why freelancers are on the rise
As more companies turn to freelancers for content, graphic design, programming and more, workers are starting to sign up for these growing opportunities. Previously, one of the major barriers to becoming a freelancer was the concern over steady work. However, with so many startups and bigger companies offering jobs on sites like Freelancer, Guru and Upwork, it doesn’t take much to stay busier than ever. In fact, many freelancers now state that they make more than they did when holding down a “regular” job.
With the increasing demand has come an ever-advancing army of freelancers that is a little shy of 54 million workers strong and growing. In 2015, it wasestimated that nearly one-third of all U.S. workers had participated in some type of freelance or temporary project. By 2020, it is estimated that nearly half of the entire U.S. labor force will be in some type of freelance position or take on side projects that fit the definition of freelance.
While nearly 33% of the current freelance workforce falls into the millennial demographic, the rest are primarily middle-age workers who have discovered the benefits of working for themselves in order to effectively juggle other activities that have proven difficult or stressful in dual-income families.
How freelancers are changing workflow and processes
It’s difficult to say which came first — the entrepreneur (chicken) or the freelancer (egg). However, the two have reached a point where a significant change has occurred. Entrepreneurs have gradually stopped working a 40-hour week and instead, are putting in however many hours it takes to get their businesses up and running. In turn, they have sought out like-minded individuals willing to work on a similar schedule.
The one caveat here is that the entrepreneur may not be able to hire this person as a regular employee because of benefits’ expenses and potentially even office space costs in order to give an employee a place to work.
That’s where the “age of the freelancer” becomes a win-win scenario. Both the freelancer and the company receive heightened benefits. The freelancer is perfectly happy not having to report to an office; he has the freedom to work with companies around the world and the opportunity to maintain a large portfolio of clients rather than pledging allegiance to just one employer.
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Freelancers also enjoy being able to potentially set their own hours, as long as they can meet their deadlines. They are also okay with not getting benefits because either a spouse or external source can help provide coverage. The fact that they can create their own work schedule around their personal life is worth the trade-off.
In return, the entrepreneur gets access to some of the best talent available who is willing — and able — to work on demand and in line with the available budget. This line of talent does not necessarily need to be trained because they most likely already know what they are doing, having worked as a writer, designer or programmer for a number of years. While there may be some small things to tell them related to your personal preferences and the way you work, overall thisworking relationship saves resources and helps you hit the ground running.
Another perk is that freelance talent often stays with the business when they see its potential and recognize the possibility that it could scale up and provide a steady stream of revenue. Some entrepreneurs have even found talent who understands what it’s like to start a business and wear many hats, so advantageously, they are both doing the same thing.
Keeping those benefits in your business
For entrepreneurs, it is critical to ensure you have a retention strategy to keep those freelancers who serve you well just like you would if they were regular employees. This is especially the case in light of the aforementioned statistics that show freelancers will become a nearly dominant force in the labor pool, potentially dictating their own demands and preferences like customers have begun to do in the digital age. To do this requires knowing what concerns they have and what might impact their relationship with you.
For example, many freelancers often list themselves as self-employed and end up with higher taxes and insurance costs. They also have concerns about saving for retirement. While entrepreneurs are not responsible for these costs, it is still important to understand the position of freelancers and listen carefully when they propose an increase in their rates over time.
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These independent workers are now starting to come together to address their concerns through organizations like the Freelancers Union, which has started offering access to group health plans for better rates. These types of associations also provide information on political issues that impact freelance status and encourage collaboration, networking and the exchange of ideas to help raise the standards of this new workforce.
Imagine what could change if 54 million voices joined together and took a stand. No other type of workforce could do that because of differences in industry and business niches. However, despite freelancing in diverse areas, these workers share common goals, issues and desires. That’s a force to be reckoned with and one that more entrepreneurs should listen to and assist in any way they can.