A form of self-employment, freelancers are able to work with relative flexibility and sell their services to a broad range of clients.
This can be a permanent basis or as alongside a traditional, full-time job, while they tend to operate on a contractual basis and aren’t employed directly by a single employer.
The term ‘freelancing’ is typically used interchangeably with contracting, but there are several differences between these two practises.
Firstly, contractors tend to work on single, fixed-term contracts at a time, while they’re typically based on client sites. They may also operate under the legal umbrella of a limited company, whereas freelancers are often classed as being sole traders and subject to completely different tax requirements.
Interestingly, both freelancers and contractors are in demand in similar areas, such as IT, finance, copywriting and the creative sectors.
Is Freelancing Really on the Rise?
Freelancers tend to operate in the so-called ‘gig economy’ which continues to boom and has more than doubled in size (to include 4.7 million workers) since 2016.
Even more tellingly, some 48% of all gig workers in the UK also have a full-time job, highlighting the increasing flexibility of freelancing and the way in which innovation has made it easier than ever for individuals to work more effectively and efficiently.
Such trends are unlikely to change anytime soon, either, particularly with a further 20% of employees considering transitioning to the freelance working model in the near and medium-term.
This has been inspired in part by lockdown, which saw a marked increase in remote working and opened up new opportunities to employees across a range of different industries.
You could even argue that the trend for freelancing began in earnest in the wake of the 2008 Great Recession, which spawned an entire generation of so-called “accidental entrepreneurs” and changed the labour market landscape across the globe.
Is This Good or Bad for Businesses?
While this may seem to pose a challenge for businesses, it actually creates an opportunity for employers to reduce operational costs and potentially improve output across the board.
After all, companies can look to create leaner and more agile workforces, which adapt and optimise their skillsets according to the challenges posed by individual projects and tasks.
Similarly, companies that embrace freelancing can also boost their ability to acquire and retain staff members in the current marketplace, enabling them to access the best possible talent and compete aggressively with their main rivals.
Of course, realising such benefits depends largely on execution, particularly in terms of how and when you hire freelancers. It’s also important to retain a stringent hiring process, which focuses on acquiring the best talent and ensuring a cultural fit within your business.
You may also want to integrate a flexible open banking platform into your business model, in order to guarantee quick and efficient payments for your freelancers and maintain a professionally organised payroll.