Fixing the Freelance Future: E-Work’s Brave New World Comes With Serious Drawbacks

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As the next billion people come online, nations will need to ensure that their labor forces aren’t shortchanged in a hyper-competitive world.

Flickr / Bark under Creative Commons

As the next billion people come online, nations will need to ensure that their labor forces aren’t shortchanged in a hyper-competitive world.

Science writer Julian Taub has been freelancing for close to three years now. He has written for prominent publications, believes he has a strong network and understands what it takes to land work. Yet writing for the Web on a contingent basis hasn’t been easy. As Taub points out, he “would be afraid to do it as [his] sole source of income. Just because it’s very precarious: You don’t know what’s going to come up, there’s not many guarantees, and it’s really tough to be one step ahead” on a beat. As a recourse, he also works in Web development, on a freelance basis, because it’s more lucrative.

Increasingly, technological advances are making it possible for businesses to tap the global workforce as they would a local talent pool. But given bleak economic trends and the mobile nature of the tech-allowed arrangement, employers are finding it easier to shift away from the traditional full-time contract that used to be readily offered to freelancers. Which means, as Taub’s experience illustrates, that a shaky freelance position won’t be the exception in the upcoming globalized world. It’ll become the industry standard.

This can already be seen in remote-work marketplaces like Elance, which have experienced a surge in the demand for remote workers. Elance has seen almost a doubling in the number of jobs available from 2012 onward. In the process, freelance workers’ livelihoods are being determined by the technological landscape that facilitated their ubiquity in the first place, as more sectors are upended by emerging tech.

In the U.S. alone, it is expected that 60 million people will be working as contingent workers by 2020, according to Intuit’s 2020 Report: Twenty Trends That Will Shape the Next Decade. For the most part, a contingent worker is an independent contractor, such as a freelance journalist, who is paid for services rendered and agrees to the work commitment, place and time. Anyone from a lawyer to an auctioneer can be an independent contractor, and the contingent workforce is made up of temps, specialists, consultants and other self-employed workers.

Though job security, employment stability, health insurance and employee benefits are casualties in this new work paradigm, the resulting flexibility, independence, adaptability and personal fulfillment are said to be ample trade-offs.

But we’re going to see the world’s 2.4 billion Internet users doubling, and the need to understand, as well as deal with, the coming tide as it relates to work is paramount. During a forum on this topic held by Quartz, Atlantic Media Group’s business news site, Daniel Debow, senior vice president of Salesforce, and Brad Garlinghouse, CEO of Hightail, differed in the ways they predicted that technology and remote collaboration will drive the coming incarnation of work. But they ultimately agreed that it will be vastly different from what we’ve come to expect.

As Debow summarized rather imaginatively, “Fifty years ago we had this exciting thing that we would put everybody in offices together and they would just all sit there and type. We’re just about to leave a world where everybody has to sit in an office and type together.”

Many workers are finding they can kiss this traditional workplace goodbye and do their jobs elsewhere.

Flickr / Phil Whitehouse under Creative Commons

Many workers are finding they can kiss this traditional workplace goodbye and do their jobs elsewhere.

The cubicle-adverse couldn’t be more thrilled. But a world in which full-time work is dwindling–companies are increasingly using contingent workers, global competition is the new norm, and no adequate social nets exist to facilitate the transition–might be more unappealing than the holiday office party. You need only look at the existing contingent workforce for a glimpse into that possibly bleak future.

Taub turned to Web development as a lifeline, but that, too, could mean a decrease in earnings as the world’s workers are engaged for their services. Platforms like Elance, along with Guru, oDesk, CrowdSpring and countless variations, allow freelancers to bid for available jobs, which brings down rates. In its Global Online Employment Report, Elance boasts that freelancers earned $130 million in just the first half of 2013. But when that amount is divided by the number of jobs–600,000–each project paid about $217.

Though Elance did not respond when reached for comment, it might counter that the average hourly rate for its users in the United States, for example, comes out to be $20. But given the nature of the work, that rate is not guaranteed on a project or weekly basis and does not account for the taxes, self-employment health insurance, business expenses or retirement savings that a freelancer is solely responsible for.

Alex Butler, founder of the freelance member community KindredHQ, is not a fan of such marketplaces. “We are not convinced that the emergence of the cloud labor platforms will do much for the freelance workforce,” she says. “They are certainly opening up new markets for less-skilled work, but those freelancers who specialize outside of the ‘pay per hour’ professions do not find them useful. Indeed, they drive down the margins, mean[ing] that, in effect, it is more difficult to make a living as an independent.”

Ruby Walia, former chief technology officer at Dow Jones, sees how price disparity could become an issue in a hyper-connected world. He points out what happened to U.S. workers in a relevant field: “Software developers in the United States for the last 15 years went through a little bit of a difficult time because opportunities were migrating elsewhere.”

Walia adds, “In fact, one could almost argue that if a job doesn’t require a physical presence–if you’re a plumber, you probably have job security–then all of a sudden you’re competing on a worldwide platform. And the pricing disparity will definitely become an issue. In the longer run, people will have to worry about competing on that world stage and how you remain relevant, competitive and effective from a pricing perspective.”

Similarly, Salesforce’s Debow tells the new age worker, “You better learn how to be adaptable.”

Learning to adapt, no matter the circumstances, will be a priceless skill in a freelance-dominant economy.

Flickr / JD Hancock under Creative Commons

Learning to adapt, no matter the circumstances, will be a priceless skill in a freelance-dominant economy.

Mariana Marcaletti, a Fulbright scholar and digital journalist, foresaw this development and came to New York from her native Argentina to get a leg up on the competition. She says, “The most important thing in the digital era is to keep updated, to be flexible, and, whenever something changes, to [go] along with the change.” To complement her existing skills in the field, she is pursuing a graduate degree in journalism.

Adaptability is expected in a world that seems to evolve as quickly as it arrived. But, going forward, governments will need to train their workforces on how to navigate a contingent-work world. That is something most governments, if not all, have done a poor job at so far.

For KindredHQ’s Butler, one of the most demanding issues is payment, since many contract workers are being exploited. “The most obvious policy would be that governments require payment within a reasonable time period and that after that interest is compulsory,” she says. “Tax incentives are also helpful to assist freelancers with their cash flow.”

Having experienced his own share of payment injustices, Taub is unsure how government can get involved, but he thinks a change in societal outlook is important. Clients should tap into “the idea that freelancers are [not] expendable,” he says, adding, “Me and other freelancers have been taken advantage of time and time again by somebody looking for some quick content. It happens all the time in this line of work, and you have to make sure to get everything in writing.”

As a former freelance journalist, Marcaletti would like to see government intervention at some point. “Governments can keep an eye on the conditions in which freelancers work, maybe protect them more. I don’t know how, but there must be a way,” she says. “Freelancers are contractors, but they don’t have a union. So if they have any problem with a client, they don’t have a way to fight against that, any political way.”

But unions typically involve a specific trade, Marcaletti points out. In a freelance economy, anyone can be a freelancer, so establishing common ground might be tough, especially with global competition driving prices.

Despite all this gloom and doom, it seems that people have a rosy outlook on the future of work. Debow sees a place where only “results matter, where people who create amazing things or do amazing projects…will be rewarded.”

Walia sees it from a more pragmatic standpoint. “The value [the Internet] brings, and the way it supercharges that phenomenon [of a global workforce], is that it’s a very effective marketplace, and so it allows someone who has a need to find someone who can fill that need in a very efficient way,” he says.

With the evolution of the new economy’s workforce well underway, any optimism should be tempered until changes are made in the way these workers are compensated and treated. As Butler points out, “It is important that clients value the work that freelancers do and reward their contribution to the business’ success, rather than treat freelancers as robots and algorithms.”

Robots and algorithms can do without fair compensation and adequate safety nets. The world’s next billion workers can’t.

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