Your startup is about to outsource some of its services to freelancers, contractors, or consultants. It is its first foray into this mode of employment. At the most basic level, your business will convert a traditional salary work into a less capital-intensive one.
You are standing in the face of a tremendous opportunity. A 2016 McKinsey survey found that up to 162 million people in Europe and the United States were engaged in some form of independent work.
Too often the gig economy has been tagged as the future of work. In reality, that future is already here. So a better question to ask is: what’s next? To get an idea of where it is headed, take a look at three of its components.
Millennials: flexible freelancers.
According to various studies, the percentage estimates of the population participating in the sharing economy by 2020 are between 40 and 50. But one cannot insist to discuss this new economy and fail to mention the millennials’ role in it.
Two years ago, TechCrunch reported that there were almost 54 million freelancers in the US, making up more than one-third of the workforce. And the millennials? They occupied 43 percent of those part-time posts. Go figure.
Why are members of the Gen Y embracing a more flexible work culture? There are several known reasons. Among them, TC listed the important ones: “advances in technology that allow increased remote work; an increasing digital economy; a growing part-time workforce; and labor force gains and losses.”
Startups: drivers of demand.
Small businesses and startups are mainly responsible for the organization of platforms where part-time workers launched their unconventional careers. Some brought change on a massive scale.
Uber and Lyft took the concept of personal chauffeurs to the mainstream leaving the taxi industry disrupted (and angry). TaskRabbit enabled homeowners to book handymen and taskers to complete everyday yet time-consuming chores.
The same enterprises are also beneficiaries of the freelancing boom. Companies with under 100 employees hire remote workers using platforms like Upwork, PeoplePerHour, and Fiverr. Here, freelancers peddle their services as retailers market their products.
They also cover a lot of ground ranging from web development and design to project management to content writing. Their flat or hourly rates are affordable for those unable to pay for full-time services.
But in the last couple of years, even corporations have been turning to these platforms. Upwork, for instance, works with 20 percent of Fortune 500 firms.
Virtual currency: a viable payment system?
With notable advancements, digital payments and remittance are powering the gig economy. Freelancers and gig/remote/part-time job providers are thriving because moving money is no longer an insurmountable challenge. It takes a few clicks to send money from the United States to India, from Estonia to Kenya.
But financial technology, or fintech, is also not limited to coins and bills. Today, it continues to find answers to the question: Can you use digital currencies to fund real-world transactions?
Of course, bitcoin and other cryptocurrencies have been around for years. But the coin ecosystem is far from maturing, as it only started to trend in the B2B space.
One of the “older” blockchain services, UK-based bitcoin wallet Cryptopay, believes that much more development is needed to make a dent. But if companies are paying each other with virtual coins, then there is a high chance they will pay freelancers with the same currency.
Cryptopay recently announced a public token sale (ICO) based on the rising demand from investors and users who are interested to invest in an already established and viable crypto solution.
What awaits the future?
There are many other moving parts in the story of the sharing economy. Policymakers and regulators, as well as labor unions, also have roles to play. But whether it is in first-world country like the United States or a developing nation like Malaysia, freelancers are growing in strength and number.
In Kuala Lumpur, companies are hiring foreign talents interested in doing gigs abroad, more accurately called jobbaticals.
So the concept of a freelancer as a remote worker is also evolving. Still, the essence of the sharing economy has not changed. The freedom and flexibility are its staples. The needs of local and global startups and small businesses are its fuel.
Most importantly, the millennial generation, still active and energetic, are its key players, occupying most of the jobs it generates.
Featured Image Courtesy of PixaBay.com