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The Gig Economy vs The Freelance Economy

by YOSS Community Writer, on September 17, 2019 at 3:58 PM

Recently, three ride-sharing moguls — Lyft CEO John Zimmer, Lyft co-founder Logan Green, and Uber CEO Dara Khosrowshahi — came out against a new California law seeking to define their drivers as employees rather than independent contractors, offering them benefits and bargaining rights. Instead, the companies propose creating an entirely different third category for workers.

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But the truth is, that evolution has already begun. Increasingly, the term “gig economy” is falling out of popularity in favor of “freelance economy.” According to Deloitte, more than 40% of U.S. workers have “alternative work arrangements,” whether gigging or freelancing. More than one-third of American workers freelance, according to estimates, and in a decade, that percentage might grow to become the majority.

What is a Gig Worker vs a Freelancer? 

Already, 89% of 18- to 26-year-olds see freelancing as a long-term career path. So what’s the difference between freelancing and gigging? It’s the difference between a permanent and long-term state and a short-term, transactional “side hustle.” Gig workers, such as Lyft drivers or TaskRabbit “taskers,” might handle a large number of clients through third parties, whereas freelancers work independently and manage a few clients over a longer period.

Additionally, gig workers might have more than one area of focus, whereas freelancers are experts in a particular field, such as accounting or coding. Gig workers are generally more transactional, whereas freelancers are often consulted by their clients on long-term projects. Freelancers tend to be in supply-driven markets. Additionally, when changing careers, freelance workers don’t have to leave their skills at their last jobs but can rather transport them into the gig economy and generate income while they look for the jobs they want. In short, in a “freelance economy,” the focus is shifted onto the people performing the work instead of the tasks they perform.

Most companies, however, aren’t set up to hire freelancers as knowledge workers; they’re designed to keep knowledge in-house with full-time employees. But those resources have limits, and this has frequently resulted in the need to hire expensive consultants to fill the gaps. Now, as work evolves and more and more people have access to knowledge, the power is beginning to shift to consumers. This is where freelancers can step in.

Hiring freelancers poses some unique considerations. When you’re planning to develop a relationship with someone, you must first ask yourself a few questions:

  • Am I looking for a transaction or a service?
  • Do I need a short-term or long-term partner?
  • Will this person be integrated into my team or work alone?
  • What kind of internal support do I need before I can outsource this work?
  • What types of contracts am I equipped to handle? Am I prepared to negotiate with a freelancer?

Answering these questions will help you streamline your onboarding process before you bring a freelancer onto your team.

The Future With Freelancers

Once you do that, you’ll find that you don’t need to offer the same training you would for full-time employees, because you’ve hired a freelancer specifically for her specialized skills. She can do the work as long as your project is catered to those skills. The key to success when working with a freelancer on project-based tasks is to draw a clear line from task to project. Doing this both creates more opportunities for gig workers to convert to freelancing and allows you the chance to outsource tasks before outsourcing full projects.

In the future, cross-pollination between the gig economy and the freelancer economy will force new — and improved — laws and regulations to protect workers and help them thrive. We will see a rise in commodity services and products suited for both the freelance and gig economies, including such categories as insurance, healthcare, financial planning, mortgages, benefits systems, and travel. Companies will have to start to rethink where freelancers, giggers, or both live within the organization: Who’s responsible for them? Procurement, human resources, or the C-suite?

As the gig economy continues to evolve into the freelance economy, it will keep taking on new shapes, ultimately benefiting both workers and companies. When you ask yourself the right questions, you and your brand will be well-positioned to capitalize on this new frontier of work. And if you’re on the hunt for the perfect freelancer, sign up for YOSS to access talented professionals in myriad industries today.

Looking to expand or better manage your current workforce? YOSS can help build your talent pool, allowing your company to stay connected with existing and new talent. Our mission is to make agile staffing easy for companies like yours so schedule a call to learn how YOSS can help.

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Topics:Hiring FreelancersFreelancer EconomyiProTomorrow's WorkforceBusiness StrategyWork CultureRemote WorkforceFreelance RevolutionFuture of Work