David Petersson

@davidpetersson006

Freelancing will dominate in ten years but the freelancers will lose most

Photo by Samuel Martins on Unsplash

We’ve all used them or have friends and relatives who have; freelancing tools are increasingly becoming common. A report by Upwork and Freelancers Union suggests that by 2027, the majority of the workforce in the US will be freelancers. Most of these are freelancers by choice; freelancing allows them to get an extra income while enjoying flexible working hours and being their own boss and in charge of their own schedule. Because of this, nearly 50% of all millennial workers are already freelancing.

Reasons for freelancing

The freelancing environment totally disrupts the employment space. Upwork now dominates what was once dominated by Monster.com. Skill requirements are becoming more granular and on-demand. Previously, it was the job of the governments to create new working opportunities. Now, the blame for unemployment totally rests with us.

There are many cons and pros to freelancing:

  • Freelancing lets you immediately get a task, complete it and get paid for it. But it leaves just as fast as it comes. Unless you have hourly, regular contracts with a few clients, you will be unemployed for the rest of your time, which you need to devote to “marketing” for yourself.
  • You can work outside the routine nine-to-five grind, be your own boss and do whatever you like. However, most of the time you are either overloaded or have nothing to do. And when overloaded, it actually requires you to sacrifice more than if you were in a regular job — since you have to keep up your ratings and your clients happy or there will be no more work.
  • As for payments, at times freelancers are paid more than regular staff. But also consider that in freelancing there are no bonuses, no increments, no promotions, no health benefits or insurance covers.
  • Freelancing can also mean instability and unfair work compensation. At times, there might not be a client suitable for your skills, and at other times they might just take the cheapest offer. If you lower your rate to get competitive advantage, you might end up with a job not worth the efforts.

Where we are heading

If the report is true, we’ll be having more and more freelancers which means higher competition and cheaper workforce. While explicitly prohibited in some platforms, at times freelancers are forced to work for free to prove their skills to the clients. This can have a damaging effect on the industry.

The other problem is the large cuts. These platforms tend to take 10–20% of the freelancers earnings. You do all the hard work, follow up numerous times with the clients to make their payments and when it finally arrives, a large chunk of it is gone (not to count the bank transfer fees on top of it).

In the event of disputes, freelancing platforms usually side with the clients, for the sole reason that they are the ones who bring profits to the platform. The unfair treatment of freelancers sometimes nears slavery, as people have to work without compensation in the hope of getting something — if anything — back. I’ve witnessed firsthand how shockingly easy it was to fire freelancers on some platforms without any compensation for the work already done.

We must remove the middlemen

To make freelancing fair, we need to remove bias from the system and let freelancers get the full benefits for their work. This is also better for the clients, as motivated freelancers deliver much better quality than those who work for the paycheck. Also, with the middlemen fees gone, the clients will also be charged less (since the freelancers don’t need to charge extra to fill that gap).

This is a great use-case for blockchain, a technology designed to remove the middlemen and allow for peer to peer financial transactions. This technology later expanded to cover a lot more features such as smart contracts and voting.

Using blockchain, we can trust disputes to the community. Blocklancer demonstrates this concept by allowing anyone with a token to participate in the disputes and get paid for that. Since thousands of token holders can collaborate to resolve the dispute, unfair outcomes are no longer an issue.

Of course, any alternative will need to bring in clients too, since they are the ones that bring the money and offer the jobs. Currently, Upwork, Fiverr, PPH and Freelancer are dominating the space. As such, any alternatives would need to take niche approaches to get a foothold in the industry before they can expand. To be successful, you first have to create a product that a small number of people “love” vs. a large number of people “like”.

For instance, instead of the usual job-posting-and-application in most freelancing platforms, one startup has come up with a great solution that lets users instantly connect, talk via video chat and instantly pay for the service. Simple questions like getting advice on your looks or instant translation can be answered this way. The project is called Anything App and it uses machine learning to find proper applicants, which means users will not need to do their own marketing.

Closing thoughts

While freelancing platforms put their emphasis on clients, it must be noted that low-quality work actually damages these brands too. These platforms need to take care of their freelancers too or they will also lose clients. This means that as freelancers, we do have a say in how we are treated –by choosing the alternative platform that treats us right, we’ll signal to our clients where they can get the quality they need.

We’ll have to see who creates the killer platform that takes care of freelancers as good as the employers. Maybe then, freelancing will truly flourish.

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