Around the world, millions of people have lost their jobs due to the coronavirus pandemic and the lockdowns implemented to attempt to slow its spread. There is emerging evidence that many of those traditional jobs won’t be back – instead, the transition to freelancing will accelerate.
By some measures, postings for freelance jobs in the US grew 25% during their lockdown as millions of regular jobs disappeared. Judging from some of the feedback I’ve heard from friends and family, a similar process is underway in SA, particularly for skilled workers.
For a few decades now, many have been predicting a “freelancing revolution”. New technologies mean that – for some types of jobs at least – working remotely has never been easier. There’s no reason why these days, for example, someone in SA couldn’t get a freelancing gig doing, say, marketing work for a US company. This would be a mutually beneficial arrangement – the American business would save money and the South African freelancer would earn US dollars on a flexible schedule.
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Yet, the freelancing revolution never seemed to arrive. In fact, the last few years actually saw the opposite happen. Faced with a very competitive talent market, many companies were eager to hire skilled workers into traditional jobs to make sure they had the people they needed. Wages for the skilled grew quite rapidly in most places, and many businesses were even willing to make traditional jobs more flexible to keep workers in place by offering remote options and benefits like more time off.
The pandemic, however, may have changed all that. Right now, companies’ biggest worry is financial survival. With economies worldwide in turmoil, many businesses simply don’t know how their finances are going to look in six- or twelve-months’ time. Therefore, they’re eager to cut costs and increase flexibility. A good way to do that is to turn full-time traditional jobs into freelance gigs. And with so many people out of work, there’s a bigger pool of potential freelancers out there than there was a year ago.
It’s all about risk
The core issue here is risk – companies and workers both need to balance out various risks.
Generally, full-time jobs set up a specific risk dynamic. The company accepts the risk that they may not need the worker full-time every week in exchange for the certainty of having guaranteed access to that worker when they do need them. The worker accepts the risk that they can’t pick up on other opportunities to earn income during working hours in exchange for the certainty of a regular salary.
When workers are scarce, jobs are a good deal for businesses – they face a real danger if they rely on freelancers that, when they have a big project, they may not be able to find all the workers they need and may fail to deliver. To make the deal appealing to workers – who have many options when labour markets are tight – companies are willing to offer good salaries and attractive benefits, along with some degree of job security.
The traditional jobs deal is also good for governments. It’s easier to collect tax revenues from big companies than thousands of independent freelancers. Plus, if companies provide benefits like health insurance/medical aid and pension/retirement savings, the social burden on government is lower.
However, when there are a lot of idle workers around, the picture shifts. Companies find freelancing more appealing because they can be more confident that they can get the people they need when they need them. And for workers, freelancing becomes a better option because there are fewer traditional jobs around, and they may even be able to improve their earnings and job conditions by working with a few clients.
For governments, however, the picture is more mixed. Tax collection may take a hit and, because freelancers generally don’t have access to benefits, governments may have to shoulder more responsibility for health care and retirement savings.
Freelancing boom
In the current environment, conditions are ripe for a freelancing boom. Many people – including skilled workers – are out of work. Companies are facing a lot of uncertainty and many want maximum flexibility. Plus, governments are already taking on a lot of additional responsibility for people’s health needs, and tax collection is in the doldrums anyway – so they don’t have as much to lose.
In short, now may be the time to totally reimagine the working world. Picking up a number of freelance clients may be a way for skilled workers to gain more control over their income and their time and working conditions. With the right set of skills, the sky could be the limit.
