#92: Biden Admin's Classification and IR35 Impact, Freelance Platform Landscape, 3 Reasons We NEED the Freelance Economy
Biden's classification direction won't stop the freelance economy, but it hurts 99% of freelancers and helps marketplaces, consultants, and the top 1% of freelancers (and govt obviously).
Leaders, if you’re confused about classification you’re not alone. We took the last week and deep dived with our clients and advisors, and 3 things stuck:
The Context: Freelancer friendly legislation will not happen with this current administration. But this isn’t unique, the current language and direction isn’t too far off from the Obama era, and the freelance economy boomed under those times.
The Bad: It doesn’t hurt the freelance economy, it hurts 99% of the freelancers themselves. Growth of freelancers and company adoption will still grow 20-40% YoY. BUT the real winners are marketplaces, consultants, and the existing top 1% of freelancers, not ALL freelancers or up & coming freelancers.
The Good: It accelerates the need for pro-active planning on all sides rather than being reactive.
For companies, this forces you to incorporate freelancers into your strategic resource planning, to have proper onboarding, and to streamline technologies & processes like VDI and communication/collaboration so your contractors can succeed.
For individuals, this forces you to prove you’re a business, which means incorporation and proof of multiple clients (get Quickbooks). Honestly this one pisses me off most as being a freelancer shouldn’t mean needing to be an entrepreneur.
Learn From The Experts About Classification
We’re still learning, and we’re fortunate to learn with Ray Walker, a compliance expert this Wednesday.
🙌 Leader Highlight: Mina Bastawros, VP of Creative and Digital Marketing at Airbus
If a company like Airbus can empower freelancers to wow their customers, so can you. What we especially loved…
How much Mina cares about the impact their work has on the individual freelancer
How much the business benefits from being able to access to over 100 mil expert freelancers
How tactical they got, specifically discussing their engagement with CAD software freelancers
What is the freelance economy landscape?
Check out this interactive visual and industry overview from G2 👇👇👇
Open Assembly has a similar open talent ecosystem visual.
Why Do We Need The Freelance Economy?
It’s the inevitable best way to organize our career. Without getting too geeky into Coase’s Theory Of The Firm, we’ll highlight three things we saw last week that the freelance economy would fix.
1. Bureaucracy
When we decided it made sense to sign a forever contract we inevitably created bureaucracy. In a digital, remote, freelance first economy this bureaucracy gets replaced by impact.
2. Attrition
When we decided on full time as the default we gave up flexible work agreements that can adapt to life.
Thus instead of scaling up/down depending on life situations, we forced people into working, quitting, or boomerang’ing. Which created this ridiculous ‘returnship’ situation that could’ve been avoided if Intel just offered people the ability to contract instead of full stop quitting.
Intel said:
“Have you taken a career break and are now interested in returning to the workforce? Intel is offering a 20-week paid Returnship for experienced professionals ready to return to the workforce! If you have at least 2 years of professional experience and have taken a break from your career for 2+ years for any of the following”
What if Intel just embraced internal marketplaces so that rather than returnships they could keep their best talent?
3. Economic Sustainability & Entrepreneurship
As we highlighted in the book, freelancing has been a saving grace for many people. Some have had to move across the country to help aging parents. Others had to leave the workforce for their own children. In each case, full time didn’t work for them, yet freelancing saved the day by providing an income that fit their situation.
Never is this more impactful than for entrepreneurs.
Bloomberg highlighted the rise and fall of Covid era billionaires.
While this is the extreme, it highlights a pattern all entrepreneurs have experienced - the inevitable boom/bust cycle of starting a company, making nothing for 2 years, then making a boom (or in most times a bust).
Freelancing bucks this pattern. It enables us to have side income, or easier paths to income to either complement your personal income or accelerate your company go to market.
Stay tuned for more about this.
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