The Economics of Freelancing in the Gig Economy

According to the 2017 Freelancing in America study, 57.3 million Americans freelance. The study, conducted by Edelman Intelligence also predicts that by 2027, freelancers will make up a majority of the American workforce. Freelancers represent 36% of the U.S. workforce and contribute $1.4 trillion to the U.S. economy. Additionally, their annual contribution to the U.S. economy rose 30% percent since 2016.

The freelance workforce grew by 8.1% in 2017, which is much faster than the 2.6% growth in the total U.S. workforce. Even with this phenomenal growth, the Edelman study found that the majority of freelancers choose this niche by choice. As the economy recovered from the Great Recession, freelancers chose not to go back to traditional 9-to-5 jobs.

Life as a freelancer has become more respectable in recent years as we increasingly live and utilize the gig economy.  Freelancers understand that having a diversified number of clients provides better security than depending on one employer for an income. On average, freelancers have around 4.5 clients per month.

36% of freelancers have an annual income of over $75,000 –and, around 12% earn over $100,000. These facts are important to keep in mind when hiring a freelancer. They chose to participate in the gig economy and enjoy the autonomy, freedom, and ability to choose who they want to work with as a freelancer.

Also, since freelancers usually work with several clients simultaneously, it helps to have an organized system and clear expectations when engaging with them. Here are some technology tools that make it easier to hire and engage freelancers.

ResourceGuru

Most people find freelancing attractive because of flexible schedules. But managers can have a hard time determining who's working and accounting for their time. ResourceGuru has a genius application that shows you everyone's availability on a user-friendly portal.

Your freelancers simply enter their schedule into the calendar. Then you can assign projects based on their confirmed availability. Since freelancers often work on several projects simultaneously, this eliminates back and forth conversations about availability and schedules.

Toggl

Given the fluid nature of freelance work, it can get confusing when it comes to tracking time and timesheets. Plus, some freelancers prefer a fixed project rate, while others enjoy an hourly rate. Nonetheless, Toggl will help you easily manage time spent working on projects.

Slack

Communication with freelancers isn't as nuanced as it might be with a full-time employee. Most freelancers work virtually and on a per project basis. Discussions tend to focus on the work objective, timeline, and payment terms. Still, that doesn't mean communication is not important.

Effective communication is critical for retaining your top freelancers. Once you've seen their work and built trust, you want to keep them around for future projects. Slack can help. It's a robust communication tool with direct messaging, group discussion portals, voice and video calling. You can even share conversation archives and documents.

Jing

Jing facilitates communication by creating a video capture of your screen. Then you can add a voice recording. This can help with onboarding, training, and ongoing messages — especially for information that's often repeated.

Zoom

Zoom is an online meeting service that lets you schedule meetings with your freelancers. Participants join via the mobile device of their choice–tablet, phone, or computer. In addition, you can record calls for future reference, which is great if you work across time zones. Zoom is a great tool for interviews.

HR Virtuoso

HR Virtuoso creates custom, short-form applications. So, it's easy to have one application for freelancers that indicate their special skills and availability, and a different one for employees.

Summary

While freelancing can be fluid, freelancers find more security in working for several clients as opposed to one employer. As a result, communication and scheduling is critical to hiring and retaining your favorite freelancers. Use several of the tools above to making hiring and keeping freelancers a breeze.

 

Guest blogger Katrina Esther writes for Wonolo, an on-demand staffing platform that enables businesses to fill their labor needs today.