The number of freelancers and independent contractors in our country is on the rise, and there’s no sign of this growth slowing. In fact, the shift from “traditional” employment arrangements is gaining enough speed to be deemed a true driver of the economy.
A lot of people have thought about handing in notice and quitting their job to work for themselves. They dream about leaving the dress codes, the clock-punching, the meetings, the office politics and the performance evaluations behind. And plenty of people have done more than dream about it; they’ve taken the leap and now work as freelancers or contractors who provide their skills and services to multiple clients and companies at once. As technology continues to make remote work easier, this trend continues to surge.
Currently, approximately 57.3 million people in the United States are freelancers and independent contract workers (who are part of the larger “gig” labor pool in our country), and according to the Freelancers Union, in the last five years, the independent workforce has risen by 7 percent in America. They’re found in almost every sector, from creative services (writing, photography and graphic design) and IT to accounting and education. But does reality match the dream for these workers? Should you consider a freelance career? Or, on the flipside, could your business benefit from using freelance and contract labor? Read on to learn more about this growing segment of our workforce.
We asked two Montgomery freelancers to share the ins and outs of their careers and how COVID-19 affected them.
Minnie Lamberth freelance writer
Services: Write and edit marketing pieces, including website content, magazine articles, video scripts or book projects.
What motivated you to go freelance? I felt that I had a marketable skill that would be of value to businesses along with enough contacts in the marketing/public relations fields to have a good network of prospects. I also wanted to pursue personal creative goals, such as writing a novel.
What are the biggest positives of working for yourself and being a freelancer? I’m able to focus on the things I do best. Being self-employed also rearranges the frustrations of a regular job. For example, I never mind when Monday morning comes along. I like my work, so I like Mondays. Also, I welcome interruptions, and I am happy if someone asks, “Can you do this for me? I need it in a hurry.” I like being able to respond quickly and help solve someone else’s problem.
What are the biggest challenges? Expanding my network hasn’t been easy. My work has always come from someone I know or someone who knows someone I know. I did not find success in SEO or digital marketing strategies or email list-building but instead have found that work has mostly come through personal or professional relationships.
Was last year, specifically due to COVID-19, better or worse for your business? The stay-at-home adjustments changed my ability to network in casual environments. Prior to the pandemic, I would run into contacts at social or professional events or even while shopping, which could lead to an opportunity. My workload fluctuated, but I also gained new opportunities to make up for what was lost.
Bryan Carter freelance photographer
Services: Commercial photography (Carter Photography & Design), food photography (Taste Buds Photography) and 3d structural scans (C3D Spaces).
What motivated you to go freelance? I wanted to get back to doing what I loved and have the freedom to choose my clients. Over the years, I had climbed my way up the corporate ladder and as a result much of my time was spent in meetings, and managing teams/projects. And while being your own boss doesn’t take you away from those types of things (they may actually increase) the benefits of being able to choose your clients, projects and more freely manage your time makes it worth it all. I can more easily pursue the assignments that I want to do and spend less time checking off boxes for someone else’s agenda. Don’t get me wrong, I love my former employers; some are even clients. But it’s different.
What are the biggest positives of working for yourself and being a freelancer? Having the freedom to be selective about the work you take on. Being able to steer the ship to grow creatively in the areas you most love.
What are the biggest challenges? Steering the ship. Being in control. Making the big decisions. Early on, it’s never knowing where the next job is coming from and managing all the hats you must wear. Now you aren’t just a photographer or a designer, not just a project manager or developer; you are all those things and more. The key is to focus on what you do best and reach out to find those who can best complement you in your work.
Ashley Jernigan owner, JDB hospitality llc
Services: Her Montgomery-based firm often uses freelancers and independent contractors to support her business.
About how many freelancers/contract workers do you use in a year? Five to six. What services are they providing for your business? Virtual assisting, graphic design, digital ad buying, media messaging.
What are the biggest positives of utilizing freelancers? When I first started JDB Hospitality, LLC, I felt I needed to do all the moving parts myself. This led to being burnt out and stressed out! Originally, I saw outsourcing as merely an expense I could not afford. What I realized is my time is way more expensive when dealing with tasks that can be outsourced. As my business, and my family, grew, I realized I can’t afford not to outsource. Outsourcing tasks frees my mind to manage projects more effectively.
What are the biggest challenges? When you outsource, you are dealing with contractors on their time. Many still have other jobs and other clients. The biggest challenge is managing them to work on tight deadlines. I also realized I needed to be more organized before bringing on a freelancer. I needed to be specific in what I expected of them and have routine check-ins versus a random text of “can we talk!” Managing a contractor for me is about the same as managing an employee because that contractor is not at your beck and call. However, the more organized I became and the better relationships I developed with various contractors, the easier it was to work with them. You just have to be on your game about what you want, how you want it, and most importantly, WHEN you want it.
If you’re thinking about leaving your 9-to-5 and becoming a freelancer or independent contractor, increased freedom and flexibility are probably at the top of your “pro” list. But there are challenges — many unique to freelancing — to consider too.
- Passion projects. You can pursue whatever it is that floats your boat.
- Freedom of choice. You can choose when you work, where you work and who you work for and with.
- Ownership of your abilities. You have a strong sense of ownership of every second of your work.
- Good money. You set your own payment rates. No one else is deciding on a salary for your efforts, so there is unlimited earning potential.
- Isolation. You often work alone.
- Lack of company benefits, like health insurance and 401ks.
- No paid time off. If you’re not working, you’re not making money.
- It’s all on you. You are your own accounting department, meaning you’re in charge of invoicing and collecting payments and keeping up with all information for your taxes.
- Reduced income security. You have to find and land clients to get paid, and projects can come and go sporadically, leading to cash flow issues.
In recent years, some gig workers began pushing companies they worked with (like Lyft and Uber) to provide them with the same protections and benefits that employees enjoyed, things like overtime pay and unemployment insurance. As a result, several states passed laws in favor of these workers. The most notable was passed in California at the beginning of 2020. Assembly Bill 5 required employers to prove a worker was “free from their control” and “performed a type of work different from what the company specializes in” if they wanted to classify them a freelancer or independent contractor.
In late 2020, this law was reversed by California voters. Proponents of the law on the books were disappointed, saying large companies would be able to continue “gaming the system,” by classifying workers as contractors and therefore avoiding expenses like Social Security and payroll taxes.
A TIP: Start with a contract.
Creating a template contract for your payment and working process establishes expectations for both the contractor and employer. Contracts also establish copyright ownership and usage terms.
Find the best fit for the job. Freelancer or employee?
Does your business or organization have tasks that could best be handled by a freelancer or contract worker? Weigh the pros and cons to find out if going this route might work in your favor.
- Flexibility. Freelancers and independent contractors are flexible in terms of time and can often start and finish a new or unexpected project quicker than your in-house staff, who are already tied up with other responsibilities.
- Niche and diverse skills. Freelancers and independent contractors can bring your team a special skill or expertise that it’s lacking but that may not be needed long term.
- Less liability. Freelancers and independent contractors don’t add the risks and liabilities to your business that employees would.
- Savings. Freelancers and independent contractors can save you money. While their hourly rate may work out to be more than you pay your staff per hour, you likely won’t be paying them for 40 hours a week, and you’ll save on other costs like benefits (health insurance, retirement plans) and office space and supplies. Plus, you’ll save time since most freelancers and independent contractors require little supervision or management after initial direction.
- Risk of the unknown. If you’ve never worked with a particular freelancer or independent contractor before, you can’t be certain of their quality of work. And it’s easier for a freelancer to quickly and without much notice decide they’re no longer interested in working with your business.
- Limited commitment. Professional freelancers care about their work and want it—and therefore the project you’ve hired them for—to be successful, but they also have multiple projects competing for their time and their mental investment, so they might not be as committed to your business and its long-term mission as an employee.
But some freelancers and independent contractors were actually relieved. Many freelancers (creatives especially) believed by making companies view them as employees, the law was costing them work, and they were concerned the California law could be adopted by the federal government and its labor department. They have been and are happy to work independently and without the benefits and other aspects of employment.
In early January, the U.S. Department of Labor published its “Final Rule” on this matter, outlining several factors to consider when deciding whether a person is an independent contractor or an employee. This rule is scheduled to take effect on March 8. But, President Biden may decide to delay its implementation or even repeal it.
Where this issue goes from here is unknown, but it bears watching, whether you’re a freelancer or a business who relies on them.