The global gig economy is expanding rapidly and companies are gradually tapping into this new pool of talent. The capacities of freelancers are no longer being challenged. Today some of the world’s best talent collaborates only through consultant models – which often gain huge numbers of staff from the freelance economy.

The 2019 Report by Mastercard found that in 2018, the global gig economy had produced $204 billion. That is expected to be more than double — up to $455 billion by 2023

Employees and employers are both able to capitalize on this work and freelance model. Freelance employment is characterized as the type of job in which an employee has no long-term / permanent contract with a company. Technically, these people are not company workers – they work rather as independent consultants or contractors. In the last few years – freelance work has gained huge popularity. Although it may have initially helped employees tide the gap between long-term jobs, today many professionals describe themselves as full-time freelancers. A company’s full-time employee can even be a freelancer, where they are using their spare hours and weekends for extra work. Individuals also use freelancing to check new technical terrains until they change professions.

As per the “Freelancing in America”(FIA) 64% of the professionals who are the top in their industry are increasingly choosing to work independently

For example, on the weekends a software developer may be able to moonlight as a comic book artist, create a portfolio on time, and eventually move – even though they don’t have a formal art degree. On the other hand, there are also professional full-time freelancers-journalists or coders, for example. Such people exploit the need for their professional expertise to work concurrently with several businesses, agreeing a temporary/fixed-term contract with each employer.

Benefits of Freelance Employment for Employers and Employees

At first glance, it can appear that only the employee profits from freelance jobs. After all, the rigidity of working hours helps them to achieve respite. They will pursue their chosen profession. And in some situations, they earn more, too. CNBC reported in 2019 said that professional freelancers earn more per hour than 70 per cent of U.S. employees.

But the model of freelancing jobs could benefit employers as well. Hiring freelancers for employers means:

1. Links to a far wider pool of talent

That’s perhaps the greatest advantage of hiring freelancers. There is no limitation on the venue, so usually, the hiring process is much quicker. You don’t need to undergo a lengthy onboarding cycle involving multi-stakeholder approvals, compliance training and long-term cultural preparation. Freelance employment is skill-focused – even if the employee is located on the other end of the country/world.

2. Continued activity during peak times

You can exploit freelancers during peak times to tackle the talent shortage. Peak hours don’t just mean high-demand market cycles. Let’s say you expect a good market opportunity but don’t have the skills required to make it happen in time.

You should turn to your freelancer network instead of raising the requisitions and launching a full-scale hiring drive. This improves profitability and lets the freelancer hit the running ground, making the company more competitive and open to changes in the market.

3. Reduced workload for HR administrators

That is a very tricky field. HR functions such as onboarding workers, measuring and distributing salaries and handling insurance are special in managing freelancers. While benefits may not be part of the contracts of freelancers, there is a lot of onboarding and payroll but the process is different. However, ultimately, much of the admin workload of your HR team will diminish if the organization routinely accepts freelancer jobs. That’s because regulatory policies such as minimum wage, paid sick time and mandatory insurance are still not applicable.

As well as helping employers, freelancers can also benefit from temporary, contractual employment. Anxieties around insurance coverage and compensation have long-held workers off from freelance work – but today, freelancing rewards and flexibility greatly outweigh any risks.

Benefits for freelance employees include:

1. Greater control in setting goals

Freelancers can determine the type of targets and objectives set by the organization they work with. Let’s go back to our software developer example, who freelances as a comic book artist. The employee may be given a one-week deadline to fix a feature in their full-time job, with limited space for negotiation. Yet they enjoy more flexibility as a comic book artist, and may even turn down a project entirely if the terms and conditions do not seem satisfactory.

 2. The Possibility of Diversification

Some of the most common reasons people opt for freelance is the ability to diversify. It offers them the ability to go beyond their tried and tested career path, sometimes venturing into vastly different disciplines. Or, they may choose to become high-demand, specialists in their field. In other words, as a catalyst for one’s professional ambitions, freelance jobs can drive improvement or advancement in their career.

3. Reducing unproductive effort

There’s no way around it – conventional full-time careers frequently call for unproductive activities, such as lengthy commutes, communication with family responsibilities, relocation, etc. Freelance employment provides an alternative to this, empowering workers to choose how, when, and where they work in accordance with their particular productivity patterns. As a result, it is possible to eliminate a lot of unproductive activities one would usually participate in and channel the same energy into more value-added areas – either in one’s personal or professional life.

Freelance employment provides major advantages for both contractors and their employers. Yet is this distinct from self-employment?