DEFINITION OF ‘FREELANCE ECONOMY’
A freelance economy revolves around hiring self-employed workers to undertake specific, short-term jobs in return for an agreed upon wage. These jobs typically are too small or infrequent to hire a full time employee or would be too expensive to contract out to another firm. Freelancers are the individuals who make themselves available to be hired for such temporary work. They may find temporary work through classified ads, on-line, or through temporary staffing agencies. The internet has made freelancing a more attractive pursuit for many individuals in the fields of writing, journalism, design, artistic pursuits, editing, multimedia, consulting, computer programming, and many more. The freelance economy is closely related to the Peer-to-Peer (P2P) economy. However, it is not uncommon for businesses to hire freelance workers, while a P2P transaction involves individuals.
INVESTOPEDIA EXPLAINS ‘FREELANCE ECONOMY’
The freelance economy involves specific, short-term jobs that can last anywhere from less than an hour to more than a year. Jobs can be found advertised in classified ads, websites such as Craigslist, on-line services such as eLance and through temp agencies. The freelance economy is predicted to grow as the Internet and information technology make it easier for individuals to get paid for jobs that require their skills. It is estimated that more than 50 million Americans partake in freelance work either full-time or part-time, which is about 1/3 of the entire workforce.
Freelancers often bid for specific jobs and compete to get hired by highlighting their skill and experience, or by reducing the pay which they will accept. An example would be a new small company needing to design a logo. The job is a one-time opportunity so it does not make sense to hire a full-time employee, and the company is too small to hire a design firm. Instead, the company can post the job offering on-line or through a classified ad. Freelancers specializing in logo design will respond to the ad and compete for the job, both in cost and quality.