You are currently viewing Freelancing Has Hidden Downsides |  Financial position

Freelancing Has Hidden Downsides | Financial position

The self-employed lifestyle isn’t out of the box with benefits like a healthcare plan and family leave

Content of the article

The job market is a pretty active place these days. With unemployment low and many companies opening up to new, unconventional ways of doing business, the world of work is abuzz with the idea that it is a labor market.

Advertisement 2

Content of the article

Skilled freelancing (meaning services like scheduling and marketing rather than Uber driving) is a growing share of this market. From 2019 to 2021, freelancers offering qualified services increased by 8%.

Satisfied freelancers often cite the greater flexibility and control they have over their work, as evidenced by findings from Slack’s research consortium, Future Forum, and younger workers have come to consider freelance work , with its potential for diversification of customers and sources of income, as more stable. than a full-time job. Freelancers can also rotate their skills to take advantage of trends more easily than full-time workers. “We’ve seen many graphic designers on Fiverr start offering NFT art services,” says Fiverr’s Vice President of Public Policy and Community Engagement, Brent Messenger. “A lot of people have doubled, tripled and even quadrupled their income.”

Advertisement 3

Content of the article

But not everyone chooses freelancing because of its benefits. Nearly 40% of freelancers say they would rather have a traditional job. Many skilled professionals opt for freelance gigs not because they’re running towards something, but because they’re running away.

A BambooHR survey found that the top reasons people quit their jobs were dissatisfaction, mental health, poor pay, or unethical leadership. Additionally, Harvard Business School found that 32% of workers quit their jobs because they had to prioritize custodial responsibilities. If these working conditions improved, would we still see highly skilled workers flocking to freelance platforms?

Many skilled professionals opt for freelance gigs not because they’re running towards something, but because they’re running away.

In the United States, 84% of workers cite health insurance as the benefit most important to them, followed closely by sick leave at 83%. “Many Americans lose their health insurance if they quit their full-time jobs,” says Margaret Lilani, Upwork’s vice president of Talent Solutions, “and that’s a much more fragile situation than when a freelancer has the power to choose”.

Advertisement 4

Content of the article

Yet the self-employed lifestyle isn’t ready-made with benefits like a healthcare plan and family leave, raising the stakes for would-be freelancers. Is the flexibility of the freelancer so attractive that these benefits are worth giving up? Or is the full-time job just dismal enough to justify it? Freelancers are also deprived of “soft” perks such as free office snacks, subsidized gym memberships and corporate discount programs.

“Access to affordable health care is one of the biggest challenges facing the self-employed,” Messenger says. Fiverr partners with Stride Health to provide healthcare coverage for freelancers who use the platform.

Without regular pay, it’s common for freelancers to struggle to get paid on time, if at all. And being your own boss can isolate you. Without a workplace, it is more difficult to find advice and mentorship.

Advertisement 5

Content of the article

Nevertheless, business leaders are attracted to the idea of ​​an “on-demand workforce”. A recent Harvard Business School study found that three in five executives said they would increasingly prefer to “rent”, “borrow” or “share” talent with other companies, and that their staff on time full would thus be reduced. Respondents cited improved productivity, efficiency, and lower costs as motivations for using freelancers instead of full-time employees. Additionally, managers who are moving towards a more independent business model believe they are giving workers the flexibility they want. But why does “flexibility” translate so easily to “hourly worker without benefits”?

Access to affordable healthcare is one of the main challenges facing the self-employed

Brent Messenger

Businesses certainly have valid reasons for using an on-demand model. Maybe a company wants to experiment with a new venture before deciding to invest in full-time hiring, or they want to contract with consultants in order to get something to market quickly – or maybe being that a business just needs a stopgap to ease the current supply and demand issues in the labor market.

Advertising 6

Content of the article

Hiring freelancers instead of full-time employees means the employer doesn’t have to pay for their health care plans, sick days, vacations, or training. But just because the business doesn’t pay the bill doesn’t mean the cost goes away. The freelancers themselves have to cover them.

About 75% of executives surveyed by Harvard Business School said they think freelancing platforms are likely to play a bigger role in providing benefits, training and other services to freelancers. Some freelance platforms like Fiverr offer online courses in addition to other programs and services for its user base, but freelancers pay for these courses individually.

Advertising 7

Content of the article

Firms cannot fully escape the costs of skills development. Remaining staff will need to hone the skills and workflows needed to get things done in a “mixed” workforce that relies more on freelancers. What is less tangible but no less important is that by moving to a more on-demand model, companies are losing the institutional knowledge historically held by permanent employees, and it is unclear how this knowledge will be directed from project to project if such companies are endowed with “rented” talents.

Some companies are experimenting with internal talent-sharing platforms that advertise low-key bits of work, like Deloitte’s “MyGigs” system, which offers projects for employees to “bid on”. Built in conjunction with Freelancer.com, Deloitte plans to open the system to external freelancers in the future.

Advertising 8

Content of the article

Many workers get what they need from the labor economy: the flexibility to choose their own time and place, the control and autonomy to choose their own projects, and the leeway to devote their energy to the responsibilities of guarding. But a better future exists in which full-time employees also benefit from these conditions. Workers should not have to choose between stability and flexibility.

© 2022 The Financial Times Ltd.

_______________________________________________________________

For more stories about the future of work, sign up for the FP Work newsletter.

________________________________________________________________

Advertisement

comments

Postmedia is committed to maintaining a lively yet civil discussion forum and encourages all readers to share their views on our articles. Comments can take up to an hour to be moderated before appearing on the site. We ask that you keep your comments relevant and respectful. We have enabled email notifications. You will now receive an email if you receive a reply to your comment, if there is an update to a comment thread you follow, or if a user follows you comments. See our Community Guidelines for more information and details on how to adjust your email settings.

Leave a Reply