The rise of global freelancing

Did you know that over a third of American workers are freelancers? Their numbers are rapidly increasing, and soon more than half the population is expected to be working this way. What's more, American companies are increasingly commissioning work from freelancers abroad. With similar things happening in other countries, this is drastically reshaping the global economy. Why is it happening, and what will the future look like?

The impact of the internet

Faster internet speeds and the increasing ubiquity of access are making it easier for people to work from home or from shared local offices rather than having to travel. At the same time, more general improvements in the quality and affordability of home computers have increased the variety of tasks they can accomplish, creating the perfect environment for distance working. This has freed up many workers to take charge of their own working lives. Some have responded by working from home part of the time in traditional employee roles, and others have moved into freelancing and consultancy, specializing in the things they always did best and using the internet both as a tool and as a place to promote and sell their skills.

Changing skill distribution

Thirty years ago, people growing up in North America, Europe or Australia had a massive advantage in the global job market because they were, as a rule, much better educated, having access to universal education into their late teens and a lot of support to continue studying beyond that. As educational standards have declined in many industrialized countries, however, countries elsewhere have been investing more and more in order to improve the prospects of their younger generations. The result is that far more people all around the world have a good education and related job skills, while the US, in particular, has seen an increasing disparity in what's available to rich and poor, in turn resulting in a skewed geographical distribution of well-educated people. This has given employers in some areas a strong incentive to look further afield for talent, while highly capable individuals living in countries where the cost of living is low can do really well by selling their skills at a distance.

Money management

The shift towards freelance working has brought other changes in its wake, not least the disruption of traditional systems of taxation. Now, instead of the vast bulk of tax revenue flowing through employers, it's increasingly in the hands of individuals. This means that there are far more opportunities for people to miss deadlines, make filing errors, and generally jam up the system. Atlantic Umbrella is one of the companies that has stepped in to make the process easier for freelancers. Instead of handling their own accounting and tax affairs, they can simply pay in their income and receive a payment that's much like a traditional wage, with all the tax taken off it. This substantially reduces the burden of paperwork for individuals and leaves them free to focus on the activities that provide them with an income.

Streamlining the workforce

In today's highly competitive business world, more and more companies have been taking advantage of these changes to streamline their operations. Instead of paying the overheads associated with additional employees, they're choosing to hire freelancers to carry out tasks that don't need to be done every day. In many cases, this also gives them access to greater expertise. Some have shifted over entirely to a contractor-based business model because although it means paying more per hour for the work done, it reduces the regulatory burden, and in some sectors this can result in a new saving.

Work-life balance

So far, this sounds good for employers, but what do workers get out of it? One of the biggest things that they stand to gain is an improved work-life balance, and that's often the reason given for taking the leap. Although new freelancers often have to work very hard and put in long hours to get themselves established, those who have reached a point where they can steadily get enough work have a much easier time of it. Even when hours are long, working from home means that there's no commute eating up your time (or money), you can set up a working environment where you feel more comfortable, and you'll get more time with your loved ones.

The rise of freelancing shows no sign of stopping, so we can expect governments to look at new ways of organizing it while private companies explore the ways that they can cater to a distributed workforce. The world is changing and it could become better for everyone.