Freelancing in the Gig Economy - Challenges and Solutions
The world of work has changed dramatically over the past several decades thanks to technology. Those changes have been both positive and negative for workers. One change has been the rise of the gig economy. Many people now choose to freelance instead of working a traditional job that has the benefit of health insurance, retirement savings, and vacation time. While the gig economy is beneficial for some workers, others find that it has its challenges.
The gig economy is made up of independent contractors that perform short-term assignments, recurring projects, or full-time contract jobs. They are often hired by businesses to expand their staff or bring in expertise on a project basis rather than hiring permanent employees.
This type of workforce can help companies grow before they are ready to hire full-time employees, provide a buffer in case of budget problems, or offer flexibility in terms of scheduling and locations. It’s estimated that 57.3 million Americans, or 36% of the U.S. workforce, are part of the gig economy (Upwork and Freelancers Union, 2017).
Gig workers may be able to earn more than traditional employees, but they don’t have other benefits like vacation time or health insurance. Additionally, they have minimal job security since their income depends on the number of assignments completed each month. This type of working environment can be stressful for those that aren’t used to the uncertainty.
There are also risks associated with working in the gig economy, including not having steady income and the possibility of not being able to get more work. Additionally, if a worker isn’t able to find enough gigs to meet their financial obligations, they may end up in debt. This can be especially difficult if they have children or elderly parents that need to be cared for.
For many gig workers, the freedom to take on a variety of projects allows them to stay interested in their work. This may be especially true if they are in a field where new skills can be learned quickly. For example, video editors may learn to edit different formats or software, and writers can build their portfolio by working on different types of projects.
Another benefit of the gig economy is that it can be easier for workers to make connections with other professionals in the industry. This can lead to more opportunities and potential clients down the road. It’s important for gig workers to maintain an active network of professional contacts to increase their chances of finding additional work.
One of the biggest challenges for HR managers is ensuring that there are enough skilled freelancers to cover business needs at all times. This is especially challenging if line managers are engaging freelancers directly without the approval of HR. This creates visibility issues that can cause problems with budgeting and cost control as freelance payroll costs can be charged to department credit cards or coded as any number of other expenses.
A good way to address these challenges is to ensure that there are freelance contracts in place with trusted suppliers. In addition, it’s critical that HR teams keep an eye on the competition to see what services are being offered and how those might be changing over time.
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