The freelance economy: iPros rally, but are they getting a fair deal?

News that Holden will close operations in Australia from 2017 is just the latest sign of a dramatic transformation in Australia’s labour market. With 40% of US workers predicted to be freelancers by 2020 and a 45% increase in the number of freelancers working in the European Union since 2004, many more Australians may be forced to re-conceptualise job security and join the swelling ranks of freelancers.

Tui McKeown, a senior lecturer in management at Monash University, believes we’re witnessing a fundamental change in our workforce construct. “The move from blue- to increasingly white-collar occupations was led by the IT surge in the 1980s, but many other professionals are now seeing freelancing increasingly as the norm,” she told Crikey.

In November 2012, the Australian Bureau of Statistics reported that almost 980,000 Australians listed themselves as “independent contractors”, which was roughly 9% of the then 11.5 million employed Australians. And while this 9% was a slight decline on 2010 figures, it’s a clear increase on the 221,000 employees who said they worked on a contract basis six years earlier. Back in 2004, 19% of these freelancers worked in property and business services, while another 18% worked in education. In 2012, 29% worked in construction and a 21% in administrative services.

In Europe, studies of workforce participation reveal similar trends. Research published last month by the European Forum for Independent Professionals reports the number of independent professionals working in the EU has increased from 6.2 million workers in 2004 to 8.9 million in 2013. This makes freelancers the fastest-growing group in the EU labour market.

When the United States Government Accountability Office last assessed its independent workforce in 2006, it reported 42.6 million “contingent” or independent workers, which equated to roughly 30% of the entire workforce.  According to a 2010 study published by US Software Company Intuit in co-operation with Emergent Research, 40% of the US economy will be comprised of “contingent workers” — otherwise known as freelancers — by 2020.

But an army of iPros (as self-employed professionals are termed) doesn’t necessitate an equal spread of the spoils. According to a recent study commissioned by The Loop, an online community for professional creatives, 97% of surveyed Australian freelancers worked more hours on a project than they costed for. The study, which was conducted by Longergan Research and surveyed 1127 of The Loop’s subscribers, found that 46% of freelancers had not been paid for contracted work on at least one occasion, with the average freelancer failing to receive payment from an employer 11% of the time.

McKeown says it shouldn’t really surprise us. “A key challenge is accepting freelance work as a legitimate and sustainable way to work,” she said. “Questions such as ‘when will you get a real job?’ are still commonly reported by iPros. Issues of trying to get a bank loan and of reluctant systems founded in traditional employment create real barriers to being treated as a ‘business of one’.”

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