Searching for clues to the future of freelance
As Microsoft CEO Satya Nadella noted back in April 2020 “we’ve seen two years’ worth of digital transformation in two months. Looking across the Atlantic to the US, where they are months ahead of us here in France, with a vaccination rate of about four-times and a head start of around four-months, is in many ways like looking into the future. The Covid-19 pandemic forced us into remote work, forever challenging traditional ideas about efficient ways of working and collaborating, thus opening a door for freelancing. Could the US post-Covid landscape provide clues to what’s to come here in the hexagon? So what does this mean for our freelance community?
US: radical shift
Despite the global impact of the virus, the local contexts are, in many ways, incomparable. The ranks of unemployed Americans increased by more than 14 million, between February and May 2020. As a result, U.S. unemployment went from its lowest on record post-World War II to up to 14.4 % in April and now stands at around 6.2 percent.
France: slow and steady
Here in France, there is an unnerving stability, with the current unemployment rate of around 8% actually lower than the pre-virus 8.1%! While many French demographics have been harshly impacted notably in the restauration sector, government funded part-time pay and compensation schemes saved many businesses from laying off staff.
A slower move in the same direction
Unemployment is just the tip of the iceberg when it comes to differences between France and the US, just try asking someone from the US what's the equivalent of a CDI -spoiler: there isn’t one. Despite these differences, the movement towards freelancing, in both countries, is absolutely undeniable. Around one-third of the US population is now freelancing and contributed $1.2 trillion to the U.S economy over 2020, a 22% increase since 2019. In France we are slowly bringing up the rear, with a steadily increasing 3.3 million freelancers or 5% of our population.
In addition to stable employment rates, it may be that 90% of French freelancers are said to be freelance by choice rather than out of necessity (and this number increases to 96% for tech professions). While a reported 58% of the French workforce have no intention of taking the leap (a number that increases the higher up you go on the corporate ladder) it may be these stronger pulls in each direction that keeps our freelancing numbers restrained. % Here in France, it would seem that slow and steady wins the race when it comes to the present and future of work.
Freelancer steady frontrunners
Alongside the huge bump in unemployment, an influx of younger, highly-skilled professionals seeking flexible alternatives to traditional employment has fuelled this 22% increase in freelancing in the states. While here in France employment may be steadier, the desires of our generation Y (as well as other age groups in smaller proportions) are the same world wide: independence, fulfilling work and flexibility. This traditionally unsteady status has actually helped freelancers remain steadfast in the face of change: 67% of full-time freelancers say that freelancing has prepared them to cope with the uncertainty of the coronavirus pandemic better than those in traditional jobs. Indicating that freelancing is not only taking over as a more desirable option and one more suited to the current world landscape.
“With close to 40 million Americans unemployed by late May, one market that seemed to be able to weather the COVID-19 storm was the US freelance economy. Many talented professionals that were furloughed or let go by their employers saw the opportunity to turn to freelancing, providing the industry with an injection of skilled people open to gig work. Similarly, many companies that were forced to cut costs by downsizing their staff were open to filling the gap by turning to temporary freelancers. Month-on-month revenues in the US gig-economy increased by 11% between April and May, and in June there was an additional 18% increase,” details a report from Payoneer
Freelance in France
Freelancing has been on the rise in France since the global financial crisis, with the number of independent workers increasing from 145% between 2008 and 2018, according to Eurostat. And it’s paying off. A study carried out on freelancing in France in 2019 showed that, one out of two people earn more freelancing than being an employee, a figure which increases to 79% in tech and data professions. In addition, freelancer status allows workers to choose their clients and projects.
A new mixity
From a company perspective, it’s become clear that the place of the freelance worker with the enterprise environment is increasingly important. And while at least in Europe a purely freelance workforce is not on the cards in the near future, a mix of freelancers and contact workers will shape teams in the years to come. Covid-19 lockdowns over 2020 proved that remote work can be as efficient (and in some cases even more so) as office based teams. New communication and collaborative technologies and platforms were tried and tested. From Slack to Zoom, teams were able to identify and integrate the most appropriate tools to work across physical and time barriers. Few will return to how things were prior. Thus paving the way for freelancing, which in many cases has a remote aspect. This new mixity and how to best integrate not just remote and non-remote teams but also optimise a mix of freelancers and salaried workers is slated to become an important subject of work organisation success. Independent freelancers are able to offer diverse skill sets and time-sensitive intervention as well as fresh perspectives, thus allowing innovative solutions and new energy to enterprise projects. In-house structure and existing teams are able to provide a solid framework to house innovation. Optimising this combination will be magic.
Back in 2019, e-commerce penetration was forecast to reach 24 percent by 2024 in the states; by July 2020, it had already hit 33 percent of total retail sales. And to further boost these vertiginous leaps, the first half of 2020 saw an increase in e-commerce equivalent to that of the previous ten years. Covid-19 pushed everything online, digitalising everything from how we talk to each other to how we shop and not just for groceries or clothing, but for bigger items like cars and even houses, once the exclusive domain of brick and mortar experiences.
Everything from online customer service to remote working to supply-chain reinvention to the use of artificial intelligence (AI) and machine learning to improve operations has been pushed forward at an extreme rate according to a new set of needs. One of the main constraints is opening into this digital world has been staffing projects. Companies are more ready than ever to find new and more agile ways of staffing their teams. Tech and data freelancers have been shuffled to the top of the pile, especially if they are able to understand the industry landscape.
A combination of online customer expectations, a maturity in the global market, proven remote work potential and market fluctuations requiring project based work the freelance era is upon. In Europe and especially France, we are in the beginning phases, as compared to our US cousins. This means those in the game today are not only paving the way for tomorrow but also have the opportunity to strengthen their personal freelance brand and hone their specific skill set before the rest of the wave comes. For tech and data freelancers high and growing digital demand means TJM are steady and considerable. While for companies working with on-demand and project-based makes more sense in an uncertain landscape prone to fluctuation. The freelance movement is here to stay. Freelancers who hone their personal brand reputation as well as their skill set while gaining an understanding of the new consumer landscape and be able to easily integrate into diverse company structures and processes will shine. The post-COVID-19 era will be the playground of those willing to keep pace, surrender to uncertainty and embrace flexibility and agility, both freelancers and companies.