Contracting and freelancing are increasingly becoming the career of choice by people who love what they do and are experts at it. Before the internet, this way of working would have been unsustainable and uncommercial, but that has changed. Policymakers and government should be encouraging the ‘gig economy’, not working against these powerful market forces.
The trend towards greater self-employment and the ‘gig economy’ is a global phenomenon. It’s about specialisation and putting customers and buyers together, either in their own country or across the globe.
In the broader context, it allows passionate people to monetise their hobbies into a career. In a contracting context it has delivered powerful business benefits and a new source of competitive advantage to organisations that recognise it.
Pre-internet, many of us grew up with a passion for something. It might have been for playing the guitar, or building Lego or playing with obscure programming code. Then we went to work. That passion turned into a hobby or died – rarely could it be monetised. Only a lucky few of us could turn our passion into a living.
Pre-internet, organisations that required an expert in niche and often obscure skills would normally go to a consultancy that could offer those skills, and which charged a premium for access. Barriers to entry for competing consultancies were high and the options for workers with those skills few.
Then we saw a paradigm shift in the labour market. The internet and other enabling technologies suddenly made the skills marketplace global. Driven by technology, thinking has changed and many organisations recognised the benefits of hiring skills on an as needed basis. It has also become increasingly more complicated, expensive and higher risk for organisations to employ people.
Pre-internet it was almost impossible to be an expert yourself and get enough work. Now you can. Intermediaries such as consultancies are needed less, or are no longer needed, nor are their elevated prices. Individual experts – contractors and freelancers – can do what they enjoy and find well-paid work, monetising their passion.
Organisations also benefit hugely. They still employ workers, but only employ those people with core skills and experience essential for the organisation’s long-term future. They hire the experts they need – contractors and freelancers – in project teams when needed, managed by an employed project manager.
There are powerful drivers for both individuals and organisations to move towards the ‘gig economy’, resulting in strong market trends. Employees and employment are still valid ways of working, and consultancies still deliver expertise.
But there is an alternative that the market is choosing. Policymakers must accept the inevitable and work with and not against how the market wants to function. Government must ensure that the UK’s tax and legislative regimes promote and don’t restrict this new reality of working, so that all stakeholders benefit.