Why invest in digital freelance work?

Technology has revolutionised the field of freelance work in multitudes since the term was first coined in the early 19th century. With the rise of internet users, freelancing has turned to create many virtual opportunities for people seeking to earn on a project-to-project basis. Also known as the gig economy, large numbers of people work part-time or as independent contractors with skills spanning across varying industries and geography, opening up new revenue generating opportunities. In the 21st century, digital freelance work – which refers to projects sourced for and completed on online platforms, have taken precedence over traditional employment.

According to a recent study by Edelman Intelligence, freelancers, also known as on-demand workers, account for 36% of the American workforce. Some do it on the side while also employed as a full-time employee, while others rely on gig opportunities to fill the space of a full-time job. Previously, freelancers were accustomed to business cards and handshakes at networking events. Printing out physical collaterals like flyers and brochures was deemed as the most streamlined way to reach out to potential clients quickly. Things have changed immensely since, with the increase in resources and development of tools, allowing people to work more efficiently. With one main contributor to the transformation of the gig economy being technology, it seamlessly matches demand with supply without the need for conventional intermediaries such as job interviews. 

The rise of technology has seen a swift increase in the amount of investments in digital freelancing platforms. The number of new business applications in the United States in the third quarter of 2020 alone was a record 1.57 million, according to data compiled by the Federal Reserve Bank of St Louis. Fiverr, the world’s largest marketplace for digital services, rakes in a market of $100 billion annually while facilitating freelance work connections between hiring firms and contractors. Having experienced accelerated growth in the last few quarters through the pandemic, it is expected to continue pushing the figures of digital work. Additionally, a study from Mastercard extrapolates that the overall gig economy payment volume could potentially increase to $455 billion by 2023. 

What constitutes a great proportion of the gig economy is the relevant fields in which most freelancers and organisations tap into especially in the pandemic, such as web development, research analytics, content writing. Businesses also saw that by working with on-demand talents, they could avoid the problems that many others were facing in the “Great Resignation”, which drove a whopping 4 million workers to leave their jobs in April 2021. There were also other issues pertaining to the decline in output of companies which provided these talents an opportunity to leverage their business. 

 

How the pandemic has affected businesses

 
Adverse impact on employment

For businesses, the pandemic proved to be an extreme obstacle as mass layoffs and closures of franchises occurred just within a few weeks of its existence. In a survey conducted with more than 5,800 small businesses in the United States in mid-April, 43% of them had temporarily closed, with nearly all being accounted for by the outbreak. The reasons for closure were pointed towards reductions in demand and employee health concerns following restrictions set in place by governments and policy makers. It is also reported that across the sample, there was a 57% decline in part-time employees, adding on to the 32% declination in full-time employees from January to March last year.

Originating in the largest region for supply chain, citizens were badly hit as the widespread disease forced many into quarantine. Plants and factories were shut down, thus terminating the flow of goods being manufactured and distributed. With companies aiming to save costs, they cut down on their workforce, impacting many across the broader economy with the decrease of purchasing power. The extensive loss of around 114 million jobs worldwide has since opened new mindsets for gig opportunities, many of them hoping to continue offering their professional services. 

 

Negative economic growth 

COVID-19 brought many unexpected challenges that firms eventually were unable to sustain through. Some of these were issues of reduced cash flow and loss of demand as the contributing factors to negative economic growth. The loss of jobs and decline in consumer spending has led to poor profit for businesses who are incapable of shifting their services online. Generating usual sales has become a worry, cutting costs has become a norm, and bankruptcy was declared by a total of 630 corporate companies in the United States in 2020 alone. 

 

Measures companies are doing to tackle these problems

 
Shifting their focus to a predominantly remote workforce

The impact of COVID-19 bore a huge weight on organisations working predominantly in physical premises. Quarantines and lockdowns have forced tens of millions of workers to shift to a remote style of work as it was a necessity to maintain operations. Splitting time between the office and home was accepted as the new normal for knowledge workers, which is evident in a survey by PwC with 83% of employers stating that the shift was successful for their company.

The model of the new hybrid work mode promises increased productivity for individuals and small teams with lower costs, better flexibility, and overall improved employee experiences. According to a survey conducted by ConnectSolutions, 77% of those who work remotely at least a few times a month increased in productivity, with 30% doing more work in less time. This is supported by many making adjustments in their homes, for instance, purchasing additional equipment to mirror the working environment of their office. With more time spent in their abodes, time that was previously spent on commuting is now devoted to doing more at work. Employees can begin on their tasks for the day earlier, which effectively saves up to 8.5 hours a week, or 408 working hours a year. 

 

Hiring digital contractors

Digital contractors make up 35% of the global workforce, which is no surprise with freelancing platforms becoming increasingly popular. Ravenry, a freelancing platform connecting professionals with the top 5% of writers and analysts globally, is one such platform which boasts a well-qualified profile of digital gig workers. 

Freelance services which have risen in importance largely constitute those that involve working on the web, such as content writing, web development and market research. Companies are leveraging these service platforms in projects that are both short and long-term, strategic, and tactical. The pandemic has also accelerated the move towards working with these specialised talents as many companies saw a spike in demand for digital and e-commerce expertise upon shifting their main mode of work. 

Reiko Enomoto, Senior Manager of the training curricula at the Rainforest Alliance, reported that it was crucial for the global organisation to find the right talent to localize content for their stakeholders. One key benefit she brought up was that the process of hiring a contract worker was cost effective and timely. She also mentioned the stability of collaborating seamlessly with contractors from all over the world who can fulfill very specific needs.

 

Why invest in digital on-demand workers

 
Greater Efficiency

With remote digital work being the mode of choice now, working from home removes travelling time, allowing workers to ease out on planning their schedules. It also allows for higher flexibility as workers are given time to run quick errands in their vicinity during off-work hours. With 57 million of them working from home in 2019, travelling duration has been cut down, leaving additional time on their hands to devote more to their projects. Global companies working with digital contractors are able to operate quickly and efficiently without much constraints on physical geography or timezones.

Compared to going through numerous profiles, accessing vetted talents quickly has helped companies save time as they avoid going down the process of waiting months to attract, select, and bring employees on-board. Working with Ravenry has allowed for various companies to benefit from the transfer of valuable time to other aspects of the job, working with expert researchers and analysts whose qualities and skill sets are heavily screened. 

Though the pandemic has greatly disrupted the flow of regular workplaces, many have been comfortable in assimilating into the digital culture. From a PwC survey of 669 CEOs, 78% agree that remote collaboration will be for the long-term, indicating their preference in the mode of work. The openness of organizations to the work arrangement reduces differences between employees and contractors, making for more cohesive interactions and efficient transactions.

 

Lower Costs

Resources that would usually go to interviews, training, and other expenses for full-time employees add up to a hefty sum. Hiring an on-demand worker negates this cost as they have the necessary skills for a company to avoid going through such measures, hence keeping the budget efficient and business productive. Working with contractors also greatly reduces labour costs compared to the average employee in areas like health insurance, dental insurance, paid time off, and payroll taxes. When factoring in these common employee benefits, it amounts to 30% of their monthly income. This means that effectively, you are only paying 7/10 of the total bill when working with a freelancer!

Also, in an 8-hour work day, the average employee is productive for only two hours and 53 minutes. Considering how they are hired by project or by the hour, one can easily understand why hiring on-demand saves much more compared to working with full-time employees. Companies would be paying for what is actually being done with freelancers compared to spending that bulk of money on unproductive hours. In addition to that, renting an office space takes up a substantial amount in this era of economic turmoil. Working with contractors would mean that a larger space is not necessary, given that they work mainly from home and do not require their own space in the office. 

 

Expertise

With business environments becoming more competitive, more firms are seeking to hire workers with specialised skills to improve on key areas and drive the organisation further. One concern with hiring employees in high positions or skills was the cost they bring with them, which has since been alleviated with the rise of on-demand talents. Organisations can now work with people in highly specialized positions on a cost-per-project basis, rather than spending a bomb for their expertise monthly. 

Working with people of expertise also saves tremendous hours of time. Asher Devang, a Manager at Innosight Consulting, found that working with knowledge workers from Ravenry was a quick way of filling unfamiliarity through the gaps. This allowed the organisation to focus on making important decisions instead of conducting endless research, thus making better decisions that capitalized on what would be the greatest benefits.

Research from Fiverr Business also reveals that 45% of businesses surveyed for their data report have increased their investments in freelance talent since the pandemic. This is in addition to 64% of larger companies saying that their investments in independent talents have increased. With their client base being online, freelancers are well-versed in manoeuvring around the waves of the internet. The spread of COVID-19 has also boosted digital media consumption sufficiently as more people devote their time to staying at home, thus investing more time into their digital freelancing venture.

Ravenry curates a network of expert digital workers in the fields of research, writing, and consultingWork with us for your on-demand leadership reports, white papers, trend analysis, competitor benchmarking, and many more!

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