Can freelancing be a long-term employment solution?

In the wake of the AI revolution what it means to be a skilled professional is undergoing a transformative shift, bringing about significant discussion, speculation, and quite frankly, concern over the ‘future of work.’

Africa is key to this conversation given the continent is projected to house 25% of the global workforce by 2050 and is the only region in the world with a growing working-age population. But then the question becomes what kind of ‘work’? Recognizing the imperative to align skills with the demands of the future job market, countries like South Africa are investing in tech skills development. The surge in private academies and colleges training software developers, design professionals, data scientists, and more is indicative of this commitment.

Now the question becomes where will this workforce be employed? South Africa does not have enough jobs to absorb these growing skills, West and East African countries might, and the rest of the world absolutely does. By breaking borders freelancing and contracting emerge as powerful avenues to access global job markets, especially for the tech-savvy workforce. Remarkably, +/-60% of freelancers with a substantial billable workload claim to earn more income freelancing than in a traditional full-time job.

The freelance landscape is experiencing robust growth, with an annual increase in the range of 15%, expected to peak by 2030. Major corporations, including 30% of Fortune 100 companies, are increasingly turning to freelancers and freelance platforms for talent acquisition. Notably, Google's workforce comprises more freelancers than full-time employees, and 43% of Gen Z and 46% of millennials are already freelancing in some form.

The COVID-19 pandemic has accelerated the shift towards remote work, with 5X the global corporate workforce now operating partially or fully remotely. This newfound flexibility allows many traditional 9-5ers to moonlight - working freelance during downtime.

Although the industry is growing, and more and more knowledge workers will be ‘at will’ versus salaried, the industry is also shifting and poised for disruption. Rumor has it that platforms like TopTal are bringing on fewer and fewer new freelancers, and Upwork might be following suit. Why is this happening? Because these platforms were specifically built to address the needs of employers, not freelancers.

Freelancers are seen as raw material, a commodity, not customers with unmet needs. What these platforms are likely experiencing is a large proportion of underperforming freelancers desperately bidding for work that might not suit them, this ultimately turns off employers who get frustrated and opt for recruitment agencies (meanwhile the top freelancers have totally maxed out their billable hours).

Two weeks ago I published a job on Fiverr and 9 out of 10 replies I received had typos and lacked thoughtful reading of the brief - I blame the ‘spray and pray’ approach. Now, imagine if we actually helped freelancers better understand how the industry works, improve their soft skills, use real market-related data to price and position themselves, and create a bridge to upskilling where necessary.

When we create a race to the bottom in terms of price (we get typos), and we don’t support the growth of solid (and potentially solid) freelancers in a globalized market. We reward quick replies and cheap rates, not thoughtful responses, and true employer-freelancer fit. Companies turning to freelancers instead of FTEs are doing so for cost, but also because freelancers are 1.5x more likely to upskill themselves, are more adaptable, and are better at working as a team. Where once the industry might have been cost-based, business process outsourcing taught us that low price points aren’t a magic wand in the long term. The race now is to find the fastest most efficient ways to match soft and hard skills with employers in a meaningful way.

Freelancers are typically a one-person businesses, from marketing and business development to accounting and finance – they wear more hats than they’d like to. Existing platforms aren’t built to make the freelancer's life easier so they can focus on doing the work they are great at. This hinders their ability to find work efficiently and manage administrative tasks effectively. Freelancers can spend up to 75% of their time looking for work each week, this time is unbillable. At the same time, 70% of freelancers are typically on two platforms or more – that’s multiple profiles and client sets to constantly and consistently manage.

For emerging market freelancers the barriers to succeed on platforms are compounded by infrastructure constraints (access to consistent electricity, reliable Wi-Fi) the non-localization of big platforms (many do not filter talent by African countries for example), and the global north’s inherent and hard-to-break bias towards what they might refer to as the “known and familiar."

Despite these challenges, African freelancers already represent 10% of the global gig economy workforce. Given the continuous growth we will experience in the next 30 years, the untapped potential of this demographic highlights the need for tailored platforms, products, and services that address the unique challenges faced by African, and more broadly emerging market, freelancers. If we address these needs, we have the power to make freelancing an even more viable and attractive option for the continent's youth and tech graduates.

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