Freelancing is a form of temporary employment in which workers are hired for a defined period or the duration of a project. Freelancing further represents one form of contracting out, or outsourcing, through which a firm seeks vendors for specific services from outside its internal labor market. Freelancers (called freelances in the United Kingdom) are hired individually, either directly or through staffing agencies, and might also be called contractors, consultants, or, in parts of Europe, portfolio workers.
Rather than employers, freelancers have clients, which are typically employing organizations, although freelancers may also contract with individuals who seek their services. Over time, most freelancers work for a number of clients, either sequentially or simultaneously. They are thus mobile, independent workers, selling specific services in external labor markets outside standard, organization-based employment. Freelance employment encompasses a number of census categories and legal definitions. Freelancers who find work independently are often considered independent contractors engaged in a form of self-employment. Those who incorporate become employees of their small businesses. Freelancers may also be classified as employees of staffing agencies (or temporary placement agencies), which broker some freelance agreements and act as intermediaries in the labor market.
Since the 1980s, tax regulations in the United States have caused employers of freelancers in certain industries to engage the services of staffing agencies, which at a minimum withhold payroll taxes. Agencies then serve as employers of record for the freelancers on their payrolls, even when firms merely “payroll” freelancers through an agency after the freelancer and client have negotiated an agreement. Because some freelancers work for more than one client at a time, an individual might be employed simultaneously in more than one category. Some categories also include other workers, thereby confounding any definitive count of the freelance workforce. Freelancers are, however, considered part of the contingent workforce, when defined broadly enough to include all workers employed in nonstandard arrangements. Freelancers who average fewer working hours than a standard, full-time job might also be defined as part-time workers. Some freelancers working limited hours, however, may instead be “moonlighters,” supplementing standard jobs with additional sources of income.
Freelancing is one form of flexible employment. Because firms typically hire freelancers to adjust the size and scope of a workforce, freelance employment is one means for maintaining organizational flexibility. Where freelancing is well institutionalized, a firm might retain a core of employees who hold standard jobs as well as hiring freelancers to meet short-term needs, fill noncore functions, or provide special expertise.
Freelancers also exercise flexibility. Moving readily across the boundaries of multiple client firms, they adapt to new environments and accommodate to change. Responding to the expectations of a series of clients, they must adjust to internal routines and practices as they seek to meet client needs. Most freelancers specialize in a set of skills, usually associated with a professional occupation, which they offer as services to their clients. Many develop a clientele in a specific industry or employment sector—for example, media or information technology—where they can establish reputations, find steady work, and remain apprised of new developments and changes in the field. A freelancer's clientele, however, may instead span multiple industries that require workers with similar sets of skills. Freelancers thus tend to identify their source of employment as an occupation, rather than an industry or employer, and so forge occupational identities and commitment associated with their respective skills and expertise.
Freelancing is a fluid, negotiated arrangement. Freelancers typically negotiate the terms for each project or period of employment with hiring managers or staffing agency recruiters. The terms of freelance employment—including wages, hours, worksite, and responsibilities—can vary from one assignment to the next. To establish and maintain positions in their respective occupational labor markets—and to meet their goals for income and opportunity—freelancers need to present their abilities effectively and demonstrate both an understanding of the work to be done and a willingness to produce as promised. In negotiating with prospective clients, therefore, freelancers seek to establish confidence in their expertise and promote trust in their abilities.
Some freelancers perform their work at a distance from their clients’ worksites. Those who work off site usually maintain offices, often in their homes, and conduct much of their business remotely. In some cases, a freelancer and client may never meet face-to-face, or may meet only occasionally, perhaps for a team meeting or project review. In some industries, off-site freelancing is well institutionalized, allowing clients to contract with freelancers in other locales, far from the client's office. These freelancers may, in turn, contract with clients at a considerable distance, and in some cases from around the world. Freelancing may thus promote the development of a global workforce, in which this form of contracted employment spans national as well as organizational boundaries.
Many freelancers work instead at client sites of business, where they may be well integrated into the organization and all but indistinguishable from employees. Some clients and some occupations require freelancers to work onsite, where the staff often includes a mix of employees and freelancers who may also assume considerable authority, albeit temporarily. Many settings, however, exclude freelancers from some aspects of organizational life. For example, freelancers may lack access to some areas of a building, a company's social events, or onsite recreational facilities. Where employees wear identification badges, freelancers might wear badges of a different color. Even when working at client sites, therefore, freelancers tend to remain outsiders in employing organizations.
A freelancer might remain fully employed with a single client for many years, often on a series of assignments. Unlike employees, however, freelancers virtually never receive paid sick days and vacation time. A freelancer's tenure also brings no implicit commitment for ongoing employment. Rather, the terms of freelancing require that freelancers expect that they will eventually return to the market to find new sources of work. Local labor markets for freelancers vary, depending on the local industries that employ them in large numbers, but markets for some services offer geographical mobility, so that freelancers might relocate temporarily to take assignments in regions far from home.
In occupations that include segments of freelancers, this form of employment typically provides an alternative opportunity structure, outside the systems of review and promotion common to standard employment. Freelancers are predominantly experienced practitioners who first learned professional skills, occupational norms, and established labor processes while employed in standard jobs. Some begin freelancing after losing their jobs; others choose to leave standard employment with plans to freelance. In many occupations, freelancing may constitute one or more segments of a career, especially where a freelancer can move back and forth across the boundary between standard and nonstandard employment without losing occupational status. To remain viable in the market, freelancers, like employees, must maintain and update their knowledge and skills. Unlike employees, however, freelancers have little or no access to employers’ support for formal training or on-the-job learning, and must instead find strategies for charting their careers.
Where continuing education is a requirement for maintaining a license—for example, in nursing—freelancers, like employees, need to attend classes, although typically at their own expense. Where work experience is the principal marker of expertise, freelancers might instead seek assignments that offer opportunities to learn and develop their abilities. Despite lack of employer support, freelancers who successfully leverage their experience to find challenging assignments can achieve rising incomes and occupational status outside organizational employment.
Freelancers find work in a number of ways. Some depend entirely on staffing agencies, especially in fields in which the staffing industry has established a presence in the market. Some turn to staffing agencies only occasionally. In some occupations, a union or professional association can provide referrals. Freelancers also seek work independently. Most establish themselves professionally by developing networks of contacts, sometimes through organizational memberships but often through informal connections, which might include hiring managers, employees at client firms, and other freelancers with whom they can share information about occupational developments.
Some freelancers are able to rely on their networks for referrals to new assignments, and so rarely seek work through more formal means. Others actively develop new clients by submitting or posting résumés or by contacting hiring managers directly. As they depend on their employability in the market, freelancers seek to develop and maintain reputations for collegiality, accountability, and high-quality work. A concern for reputation, which for many becomes the basis for referrals to potential clients, provides motivation for freelancers to adhere to occupational norms and standards of professional practice. Reputation thus becomes both a source of labor market control and a marker of expertise, especially for those whose occupations lack formal mechanisms of regulation capable of sanctioning delinquent practitioners. Freelancers whose professionalism becomes suspect may face difficulty finding work.
Freelancing carries risks that distinguish this form of employment from the standard job. In the United States in particular, health insurance is typically tied to standard employment, leaving freelancers responsible for finding and funding their insurance. Staffing agencies sometimes offer “benefits” equivalent to those available to many employers, but these provisions require ongoing employment with a single agency, so that freelancers who move frequently from one client to the next are unlikely to find them effective and instead are likely to experience gaps in insurance coverage.
Those who incur significant periods of “down time” without work may also lack access to unemployment insurance, and therefore assume the risks of any gaps in income. In the United States and elsewhere, much labor and employment policy excludes freelancers. Those defined as independent contractors are explicitly excluded from U.S. labor and employment statutes and are thus unable, for example, to access family and medical leave or to sue for employment-related discrimination. Freelancers incorporated as small businesses similarly lack legal standing as employees. Those employed through staffing agencies may have nominal access to the rights afforded employees, but their legal status, as joint employees of both the agency and client firm, renders responsibility for ensuring legal rights ambiguous. Freelancers thus lack access to a number of institutional arrangements that protect employees with standard jobs.
Freelancers are also limited in their ability to organize and bargain collectively. In some markets, unions operate, in part, as resources for finding freelance work, and a few negotiate pre-hire agreements with clients. In most markets, however, high mobility and variation in terms of employment mitigate the possibility of negotiating collective agreements, even where the workforce includes a significant segment of freelancers. Organizations promoting collective advocacy have therefore often sought to articulate fair contract terms and to hold clients accountable for equitable employment practices. Some membership organizations also offer occupation-specific training that assists freelancers in updating their skills. Still others seek to supplant the role of the for-profit staffing agency by offering payroll services at much lower cost. These efforts indicate a growing awareness of workers in nonstandard arrangements and, perhaps, the prospect of new social policies to address their needs and interests.
Labor Markets, External
Temporary Placement Agencies
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