How the Freelance Economy is Changing the Labour Market

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Did you know that 30 to 45% of the working class population is unemployed in countries around the world? If we take some of the world’s top economies (US, UK, Brazil, China, Japan Germany and India) into account, this translates to 850 million unemployed people. Labor markets are facing many inefficiencies, as people struggle to find work that’s suitable for their needs, skills and career goals. Many of them feel underpaid, overqualified or even inflexible to work in a traditional working environment. As a result, workers have moved towards a new way of working – freelance. The desire to be free at your work and have unlimited potential for career advances has caused this non-traditional employment to make up for 14% of the US workforce. And it’s not just the United States! By 2025, the freelance economy could add $2.7 trillion to the global GDP, and fix some relevant issues that labor markets face nowadays.

The Rise of Freelance Platforms

In the last few years, we have seen a significant rise in freelance platforms. They range from general purpose platforms like Upwork, to specialized ones that operate in a single niche like Valoso – which focuses on video editing. These online marketplaces are making it possible for people to work with different clients at the same time, changes jobs quickly and plan their own schedules. From writers, customer service agents and marketers to software developers and engineers, these platforms are connecting millions of workers with different job opportunities. Upwork alone, has reported over 13 million registered members, with over 3 million jobs posted and over 1 billion USD spent annually.

With the help of technology, freelancers are enjoying the perks of remote and independent work – which is uncommon for the traditional 9-to-5 workspace. And as the freelance trend is taking over the world, the labor market will adapt to a new, more flexible working culture.

Freelance Economy to the Rescue!

Digital freelance marketplaces can positively affect some of the most critical dysfunctions of the modern labor market and connect businesses and workers more effectively. Although freelance is still evolving and haven’t reached its peak, it provides many benefits for individuals and companies. Here are 3 ways that show how the freelance economy is changing the labor market for the better.

Freelance Helps Startups

Startups are the driving force in every economy, and freelance gives them the opportunity to be efficient and competitive on the market. By hiring freelancers, these new companies are able to take on more work and provide new services while at the same time, keep their costs at a minimum.

Freelance Provides a Flexible Employer-Employee Relation

This is maybe one of the best advantages of freelance, as it allows businesses to be flexible without having to permanently hire employees and create long-term contracts. Freelance provides flexibility to both sides. If business slows down, companies can always scale down the team of freelancers, and save themselves from additional expenditures. To implement a successful on-demand freelance structure, companies need to maintain positive relationships with freelancers. This flexible way of working where companies are able to meet the needs of their customers is one example of how the freelance economy is changing the labor market.

Freelance is All About Transparency

Online talent platforms increase the transparency of the freelance economy. Companies and clients are able to negotiate and do business under clear, accurate and honest conditions. Freelance profiles contain essential information like skills, feedback from previous projects, qualifications, portfolio items, etc. This helps companies to easily determine whether someone is a potential candidate for their project.