A New Social Contract for Freelancers

Over the past decade, changing demographics and new economic realities have given rise to a dynamic, flexible workforce that prefers to work on a freelance basis instead of seeking full-time employment. On the surface, this would seem like a win-win for both parties: businesses get the talent they need without a lot of overhead, and workers get greater freedom of choice in the work that they do. But as the popularity of non-traditional work continues to grow, so, too, do the risks—at least for workers.

A recent report by The Adecco Group, a temporary staffing firm, explores those risks, along with the challenges associated with addressing them. As the way we work continues to change, the report asserts, our social protection systems can’t stay the same.

The shift that started a landslide

Though still less common than permanent full-time work, alternative employment arrangements aren’t as “non-traditional” as they used to be. The report reveals that in the US, 40 percent of the workforce is part-time, temporary or self-employed, and 93 percent of part-timers have consciously chosen that path.

The flexibility afforded by freelance work is especially popular with younger generations. A survey by The Adecco Group and LinkedIn found that “82 percent of 18–26-year-olds see freelancing as a career choice.”

But governments and employers, particularly in the U.S., have been slow to catch up, leaving many freelancers without the clear protections provided by full-time employment, such as benefits for children and coverage for maternity, unemployment, disability, and healthcare. The report cites a recent LinkedIn survey that found the last of those, adequate healthcare coverage, to be the biggest concern for freelancers in the U.S.

When BTG interviewed Rick Wartzman, author of The End of Loyalty, a year ago, he raised an important distinction in the freelance market that further contributes to this vulnerability:

“Obviously, it’s great when people have the knowledge and skills to be at the high end of the professional talent market. There’s also a low end of gig and temp workers who don’t have the skills or formal education to be able to be in demand the way [BTG’s] talent is. And they face a different reality with low pay, lousy or even nonexistent benefits, and working conditions that are often substandard.”

In fact, more than 50 percent of contract workers receive no benefits at all.

The gig economy as a catalyst for change

Though the gig economy represents a sliver of the non-traditional workforce—perhaps as little as 1% in the U.S., according to the report—it’s growing quickly. And as it does, so do the cracks in the freelance social contract.

As to how the U.S. is addressing these cracks, David Autor, Ford Professor of Economics at MIT, is quoted as saying, “The US social security system is less generous and more fractured [than other major economies]. Much of it is also much more antiquated than in many other developed countries: the programs that do exist are there because they’ve been around for a long time. They’re not typically rethought or improved, and aren’t retuned for how things are changing.”

Even the freelance management consultants that BTG works with—who have the experience necessary to command a premium for their work—struggle to find portable benefits that will accompany them from project to project.

A question without an answer

Though there’s a clear need for a new social contract, it will be a challenge to define adequate protections for the diverse range of employment types that would need to be covered:

• Part-time work
• Temporary work
• Self-employment
• Employee sharing
• Job sharing
• Collaborative working
• Platform work (gig economy)

The report argues that a one-size-fits-all approach would fail to achieve uniform protection across all of these types of work—and across all of the various countries in which they are performed. In order to be effective, the report argues, social contracts must be defined within the terms of the political environment where they reside.

Certain solutions, such as those implemented by New York’s Black Car Fund, leverage embedded technology to provide certain protections for independent contractors. These are a step in the right direction, and should be looked to for inspiration as politicians look for ways to achieve a nationwide policy.

But, the report concludes, we can’t develop policies that provide protection for all workers without “dialogue, innovation and international cooperation.” As such, The Adecco Group proposes ongoing discourse as the best next step in solving this increasingly complex puzzle.

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About the Author

Emily is an award-winning writer who specializes in B2B marketing. She has been helping global brands reach targeted audiences to drive sales and awareness for more than 15 years. As a small business owner herself (skeletonkeybrewery.com), she understands what it's like to source a team that can scale with sudden growth.

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