Are freelancers the future of small business?

I made a big decision a month ago. I decided to stop the hybrid freelance/agency employee existence I’d lived for the past two years and to become 100% freelance.

It wasn’t a decision I took lightly, by any means. Turning your back on a regular salary is never easy to do, but having spent two days per week as a freelancer since 2015, I wasn’t entirely new to the world of contract work, retainer fees and the looming prospect of outstanding invoices and late payment from sluggish clients.

But I’ve noticed I’m not alone in going the freelance route. Self-employment in the UK increased from 3.8 million in 2008 to 4.6 million in 2015, so clearly the freelance path has become a more popular employment option for many of us. In fact, as of March 2017, the number of self-employed people in the UK has risen to 4.80 million, which translates to 15.1% of all people in work! That’s a big chunk of people who’ve rejected the traditional forms of paid employment.

So, why are we all chucking in those salaried corporate jobs and going it alone?

There’s no one easy answer to that, but here are a few key influences that are pushing an increasing number of us to become freelancer workers.

A rise in the ‘gig economy’

Since 2008, and the economic omnishambles that was the credit crunch, many large organisations have had to tighten their budget belts, make redundancies and downsize existing teams and departments. And that’s meant a lot of us hard-working people ending up with no job.

Faced with the reality of unemployment – and the sudden realisation that your corporate employer maybe doesn’t love you *quite* as much as they’d implied in the HR videos – many people have taken the bull by the horns and decided to set up their own micro businesses, or use available opportunities and technology to get short-term contract work.

This ‘gig economy’ is rising within many developed nations and, as of December last year, the UK’s gig economy had seen growth of 72% in the past six years. What’s happening is fairly simple, in some ways. People’s outlook on the nature of work is changing and the economic downturn has acted as a catalyst to help crystallise an idea in worker’s heads – namely, this…

‘Work doesn’t have to be a tedious 9 to 5 in a stultifyingly boring office… there are other options!’

A change in work ideology

Our parents, and their parents before them, were happy to leave school, get a job for life and commit themselves to a long career with one or two key employers.

Newer generations of workers – themselves a mix of Gen X, Gen Y and millennials – are less happy (and far less likely) to accept this kind of a reality. In essence, we’ve seen how the corporate life treats us and have voted with our feet to try something different.

What we want isn’t just money and reward: the main carrots offered by a career in a large corporate organisation. What the new breed of employee wants is a job that offers something beyond the daily grind and a disappointingly small pay packet at the end of the month.

New goals from employment

So what does this new breed of freelance and short-term contract worker actually want from employment? How does their outlook differ from previous generations and what does their ideal job scenario actually look like in 2017?

The new breed of worker wants:

  • Work that interests and fulfills them – With software and technology doing so much of the menial work these days, people want a job that provides a challenge to their intellect, allows them to learn and grow and makes them feel good about what they’ve achieved.
  • A direct link between the work done and money earned – We no longer feel motivated and engaged to work hard when there’s no direct benefit to our take-home pay. A salaried worker may (or may not) get the occasional bonus, but a freelancer will see a direct correlation between the the amount of work they do and the size of their bank balance – for many, that’s a great driver and motivator.
  • A better work/life balance – Working all hours that god sends may get you that promotion, but it can’t get you back the time you’ve missed with your friends, family and children. The new freelance thinker knows this and wants an improved work/life balance that allows them to earn what they need, but also find time for socialising, sports, exercise, hobbies and other outside interests. In a nutshell, we’re no longer willing to work ourselves into an early grave, purely in pursuit of the corporate dollar.
  • A more social kind of work – The tribal nature of corporate work (the ‘us and them’ of company versus competitor) is outmoded. Freelance thinkers enjoy working with a wide range of different people, making contacts, friends and possible clients by upping the social and networking element and having a more community outlook to the world of work. It’s about being part of an ecosystem and helping everyone to get a job done, not just serving the person who’s paying your cheque.

It is, of course, possible to achieve some of these employment goals within a salaried role in a larger business. But the key difference is that you – the employee – have little or no control over when and how these benefits are shared with you.

As the owner of a micro business, or a freelancer working for yourself, you put yourself in complete control of how and when you work, and (importantly) who you do that work with. And when you’re the ‘boss of me’, it’s far easier to achieve the kind of fulfilling, balanced and rewarding kind of work that you’re after.

The influence of technology

One fundamental influence on this growing gig economy has been the emergence of easy-to-use, cost-effective cloud apps and business solutions.

Freelancers now have access to the kind of high-end business systems, financial software and office tools that would have been the preserve of medium-sized enterprises a decade or so ago. In essence, with a laptop, a few core software subscriptions and the pick of the best freeware apps, you can run your micro business from anywhere.

The rise of the coffee shop worker has only been made possible by the affordability of laptops and mobile devices, the cost-effective nature of most cloud apps and the ubiquitous availability of Wi-Fi in pretty much any cafe, coffee shop or eatery you choose to park your behind in.

And I speak from experience here – since 2015, I’ve not stepped foot in an office, other than to attend client meetings. My local coffee shops ARE my office. In fact, they’ve become so vital to the freelance economy that they’re even referred to as ‘the coffice’ in some circles.

A more flexible workforce

So is this peak in self-employment bad news for more established businesses? Are the nations SMEs and corporate organisations going to see an outpouring of employees and talent and be left with no workforce to get the job done?

The short answer is, no. For a start, freelancing isn’t for everyone. It’s takes great time management skills, oodles of self-motivation and the ability to get the job done without a manager hovering over your shoulder. For some people, that isn’t going to sound like their ideal kind of employment at all – so the corporate route will always have its advocates.

And, in many ways, the emergence of a freelancer ecosystem is actually a huge bonus for many larger companies. Rather than having to hire full-time employees for many roles, it’s possible to create your own ‘remote team’, by sourcing the contractors, freelancers and self-employed consultants you need to get your project done.

As a business contracting out to freelancers, you get the best of both worlds – the experience, talent and professionalism of the specialists you need, but only for the duration of the project. That cuts costs, keeps your liabilities as an employer smaller and allows you to create the ideal team for every single job – and that’s a far more flexible employment model than we’ve been used to in previous decades.

So, let’s embrace this new freelancer economy and take a fresh look at what it means to be employed in 2017. Self-employment isn’t for everyone, but for that 15.1% of the UK workforce, it’s the kind of work that they love and believe in.

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