Freelancers
1099, Being Freelancer, Companies, People

Risk Profiles of Freelancers Versus Non-Freelancers

Originally published by Steven King at Emergent Research

There’s lots of people criticizing independent work these days as being too unpredictable, risky and all around bad for both workers and the economy.

But a pattern we’ve noticed is almost all the criticism comes from people with traditional jobs. This got us thinking about risk profile differences between independent workers and those with traditional jobs.

In the 2013 MBO Partners State of Independence study we surveyed non-independent workers asking them about their views of independent work. The results were quite interesting.

First, non-independent workers see the advantages of independent work as, well, less advantageous than independent workers do.

Risk profiles 1

Second, non-independent workers see the disadvantages as being much greater. As the chart below shows, for every category mentioned non-independents see bigger challenges than independent workers.

Risk profiles 2

One of the more fascinating findings was that half of the non-independents considered “having to invest their own money” as a major challenge. For independent workers, so few listed this as a challenge it didn’t make the top 10 challenges list, so it was scored as “not applicable”.

It’s clear from this an other research that, on average, independent workers and non-independent workers have different risk profiles. The bottom line is:

Independent workers are more comfortable than non-independents with the risks associated with being independent and more willing to accept these risks in return for greater work autonomy, control and flexibility.

This is why the majority of independent workers are satisfied and happy as independents and prefer independent work over traditional employment.

Going forward these risk profile differences raise a very important issue.

Our work indicates most Americans fall into the more conservative risk profile category. Our work also indicates those with conservative risk profiles are less likely to be successful as independent workers.

But as the economy shifts to greater levels of contingent employment, more people with risk profiles not suited for independent work will become independent workers. This is a key reason we need new policies and programs to make independent work safer and more secure.

So when reading or hearing people talking about how bad independent work is, keep in mind risk profiles. The chances are the critic has a risk profile that biases them against independent work.

But also keep mind without making independent work safer and more secure, growing numbers of Americans will likely struggle at work going forward.

On-demand freelance lawyers
Companies, Connecting talent, Future of Work, Services

On-Demand Lawyers

On-Demand Workers ‘Gone Wild.’ We are not talking about the retired guys driving Ubers or a stopping by our house to fix your wifi. Now there’s On-Demand freelance lawyers. And other White Collar folks are rapidly joining our On-Demand Society. Not just as individuals consuming services. They are not providing them. UpCounsel, a start up in my home town, is a good example. It is something very close to an for Lawyers — a market place that offers experienced lawyers to do micro-tasks. Think of a bit like high end Mechanical Turk for Lawyers. Or like Doctors On Demand.

Today’s UpCounsel’s job board listed the following:

  • Trademark Registration needed at a fixed fee of $645
  • Single Member LLC Formation at $595
  • Commercial Lesse Review starting at $950

I also tested it out — looking for a lawyer who can help me license an application  I developed to a large public company. (I need advise on how to protect my software, how to price it and also how to go about writing up an agreement). After I entered my zip code and some information about the project, it displayed a bunch of lawyers and their contact info to me. It felt a little like Match.com (I know cause I met my wife on that service).

This is not my wife, but you can see what I mean (sorry if this sounds sexist)

Lawyer from UpCouncel

Unlike Match, UpCouncel’s A-La-Carte approach offers assistance at discounted prices. It also enables lawyer to focus on the areas they are most passionate about. Upcounsel manages all the electronic paperwork and also ensure the lawyers are paid. What’s the appeal for lawyers involved? Predictable Income? Another channel to reach clients? Another way to deal with the touch economy they are dealing with. As the NY Times recently wrote about   school graduates are burdened with debt and are finding it difficult to find work. (For a good research report on this issue)

This White Collar approach will seep into other businesses. We will see more and more highly trained and educated doctors, lawyers and other professions. The question is how will this approach impact these industries. Will it be like Uber and turn industries upside down?

Probably not for a while. I researched two competitors tonight:

  1. Attorneyfee.com, but their website down (permanently?)
  2. QuickLegal, but after being live for over a year, it is only available in California and its blog has not been updated since June.
Freelancers, Marketing Yourself

Number of Freelancers continues to grow

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The number of freelancers and independent contractors has been growing  rapidly in the United States and represent an interesting trend in the  American workforce. More and more people are venturing away from  traditional full-time, 9-to-5 jobs to work as a freelancer on a project basis.

Who exactly are these freelancers?

  • Freelancers or independent contractors are “individuals who have engaged in supplemental, temporary, or project- or contract-based work”
  • There are approximately 53 million freelancers in the United States, which make up about 34 percent of the American workforce.
  • Freelancers add roughly about $715 Billion into the economy.
  • Freelancers make up 5 categories:
    • Independent Contractors – Most freelancers are also called independent contractors. Independent contract do not hold traditional, full-time employment. Instead, they do freelance or temporary work on a project-to-project basis.
    • Moonlighters – Moonlighters have the best of both worlds. They had a traditional, full-time job but also freelance on the side as well.
    • Diversified Workers – Diversified workers earn their income from multiple income streams, including part-time employment and freelance projects.
    • Temporary Workers – A temporary worker is someone who is working on a single project or for a single client at any given time. However, this position is only temporary.
    • Freelance Business Owners – A freelance business owner is someone who is a freelancer and a small business owner at the same time.

Why do people choose to freelance?

There are many reasons why more and more Americans are choosing to freelance over traditional. Here’s why:

  • The number one reason why people choose to freelance is income. Since they are not limited to how many projects they take on, they have the potential to earn more. Roughly 77% of freelances said they make the same or more money they did before they started freelancing.
  • Many people also freelance because of the flexibility. They are not tied to a office for any period of time. Instead, they can work from anywhere, whenever they want. This promotes work-life balance and generally, a happier workforce.
  • Freelancers also enjoy the freedom to do what they want. They have control over what kind of projects to take on, who to work on them with, and how much time to devote. They don’t report to anyone like they do at a traditional job. It allows for much more creative freedom.

Freelancing has it’s drawbacks too.

Of course, freelancing isn’t for everyone. Along with it’s many benefits, they are drawbacks to freelancing as well:

  • The biggest drawback to freelancing is unstable (unpredictable) income. With a full-time job, you get a paycheck every two weeks as long as you show up for with. With freelancing, you are only paid for the projects you complete. There may be months when there are less projects and therefore, less income.
  • It is difficult to consistently find work. As a freelancer, you are often looking for new projects.While the internet has made it easier and easier to find new jobs, it still takes a time to build a network and a portfolio.
  • You could be called into work at the last minute so you have to maintain a flexible schedule.
  • You do not get benefits from your employer as a freelancer. Benefits that full-time employees enjoy such as health and dental insurance come out-of-pocket expenses for freelancers. They are also substantially more expensive.

What is the future of freelancing?

Despite the challenges that freelancers face, they are here to stay. In fact, nearly 77% of freelancers says their best days are still ahead for the freelancer job market. There are more and more websites and applications that freelancers can use to help them connect with potential clients, such as Elance and oDesk.

Almost everyone I know is considering becoming a free agent and a freelancer. What about you?