Posted by Arpit Gupta
The last few years have been anything but dull. The economic cycle has turned for good, the technological disruptions are happening at a faster pace than ever, the money is getting poured into electric cars, self-driving cars, artificial intelligence like anything.
Gives you a clear picture of what the world would eventually look like, only questions unanswered are how and when.
The last decade has taught us that the traditional business models are facing disruptions from new age technology firms or newer business models. Also, the regulatory, environmental and other social costs have increased significantly, posing a threat to the existing firms with old business models, sticky cost base and uncertain revenues. For traditional businesses to thrive, they have to cut the traditional cost base and adopt the new technologies or alter their business model.
It feels scary but eventually would sink in as it’s the new world order!
With the business environment changing rapidly, there is little doubt that the jobs market would be unaffected. The automation threat to relatively less skilled and laborious jobs is anything but unreal. The automation of the entry level – tedious – repetitive jobs has already been in production to finalization stages and in some industries, automated robots, machine learning or processes have taken over the entry level jobs. The 9-to-5 job with annual appraisals, retention bonuses and the bucket of casual and privilege leaves may soon become a special privilege. The job market is changing in preference of having freelancers / temporary staff, rather than full time employees.
This arrangement of having higher proportion of freelancers / temporary workers is beneficial to the companies as they can control cost base, can meet demand – supply better, cut ancillary costs like training and development of permanent employees, change the mix and skills of the temporary works as per changes in industry trends, technologies or even business models.
The freelancing model is also called the ‘gig economy’ as companies hire gig or temporary workers rather than permanent employees. In the gig economy, talent works on a demand-supply model, moving across projects and organizations as per the demand and their interest areas.
The freelancing model has really picked up over last few years, as there has been a push from the demand side. But supply side is an equally compelling story. The work force is getting lop sided in favor of millennials and the organizations and work cultures have been attuned to their preferences. Most millennials have a preference for flexible working hours and greater control of their exposure to specific subject matters or geographies and hence building specialization in that particular area.
The autonomy or freedom that comes with freelancing makes it a lucrative and the remuneration also is higher (for the project specific time frame) than for a permanent employee. So, people with good networks and confident of steady flow of work chooses freelancing to break the shackles of corporate jobs and take the plunge into a world of entrepreneurship, where they are calling shots on what to work, how to work and which clients to work with. There are plenty of platforms like LinkedIn, Fibre.com, where freelancers get their job work and these marketplaces for freelancers, along with the demand for freelancers by corporates are growing by the day.
All this sounds to be too rosy to be true. Isn’t it?
But like all fairy tales with a twist, there is also a twist here.
There are some challenges to freelancing, which have to be taken into account before deciding on picking up freelancing as a career option. The first and foremost is the uncertainty of income. There is intense competition in the freelancing world and despite the high demand, the work flow can be irregular. This creates income uncertainty and many times issue with subsistence as well. However, once you create a brand for oneself, be it in terms of being a fungible talent or maybe a specialized one, and have a steady clientele, then the issue of irregularity of income can be tackled much easily. Another important difficulty is getting paid lower at the start, which is more like an investment to prove your worth. The only way to tackle such issue is by regularly upskilling oneself and playing with highest level of professional standards to get an increment in wages per hour or dollar per job. All in all, like in most entrepreneurial ventures, it takes time, effort, sincerity and hard work to establish oneself as a distinguished freelancer.
There is no doubt in the new world order of labor market – freelancing – as is the case with technological disruptions here to stay. The trends so far, also suggests a strong bias of moving towards the gig economy. More and more number of companies are targeting to have larger proportion of temporary workers. As per a report by US Government Accountability Office, published in April 2015,, as high as 40% of the workforce consisted of freelancers, temporary or contingent workers. 56% of companies in India have more than 20% of their workforce as contingent workers, according to the Workforce Agility Barometer Study-2016 by Kelly OCG. Trends are similar in most of the emerging or developed economies.
So, the number says it all that Freelancing as a career is already pretty hot trend and here to stay.
It’s a new equilibrium that has worked out as a fine balance of supply of talent by emerging millennial generation and demand of talent by corporations under the new normal world of ever-changing business environment!!