Susan Lund, partner of McKinsey Global Institute, has recently written an article for the Huffington Post stating that nowadays a growing number of workers are choosing to deviate from the classic “employee career path” in order to become freelancers or contingent workers. They desire to make their own schedules, choose projects and work on their own.

The variety of professions that can be performed in a freelance mode is rising and digital marketplaces enhance people’s chances of working on freelance assignments. As Lund puts it “these platforms are creating flexible opportunities for individuals who want to be free agents, but they are raising real concerns about the insecurity associated with the so-called “gig economy.””

The uses freelancers can make from digital marketplaces go from offering and advertising their services, getting a large number of projects, making use of secure payment systems and examining potential clients.

In addition, digital marketplaces can encourage large firms to hire temporary workers when they cannot hire full time positions, and they can also reduce costs for small and medium companies that need professional support.

Nevertheless, Lund wonders whether these types of platforms are an economic boon to workers who want a flexible way to generate income, or the latest sign of worsening income inequality and a fraying safety net for workers.

She says that the answer is a combination of both. According to a research from the McKinsey Global Institute online talent platforms will have a strong impact by boosting labor force participation. While some have opted out of the workforce by choice or prefer part-time employment, there are millions who would like the means to raise their incomes.

And digital marketplaces may provide an option to people who do not want traditional full-time positions. As a matter of fact, if even a small fraction of inactive youth and adults use these platforms to work a few hours per week, the economic impact would be huge ($1.3 trillion annually by 2025).

Nonetheless, as digital platforms generate pricing transparency and more competition, a great number of the jobs offered do not grant a living wage. Therefore, the quality of these jobs is being more examined as time goes by.

This is a fact that policymakers from all over the world need to start working on. They must deliver clear information about the legal conditions under which freelance workers shall work on assignments. These includes considering whether regulations like minimum wage laws apply, and what benefits the employers will need to provide.

Furthermore, Lund states that “if the digital revolution makes alternative working models and employment relationships more commonplace, policymakers will need to consider designing a system of more portable benefits. New online marketplaces and intermediaries may emerge to meet this need. Or unions could fill the gap, providing benefits and even training and credentialing for members.”

With the right institutions and policies in place, it could become more viable for people to choose a freelance career path. Workers in many fields are becoming free agents in digital marketplaces, for better and for worse. Now policymakers and the private sector will need to create a framework that allows all of the participants — including the workers — to enjoy the economic upside.

Source: Huffington Post