Working as a freelancer or an independent contractor comes with a massive uncertainty even in the best of times. Delayed payment, a sudden change in the client’s plan, and surviving in a bad economy are not for faint-hearted. It is bound to cause anxiety, especially if you are the sole earning member of the family and have to pay the bills. The ongoing COVID-19 situation has just made the life of freelancers more challenging.
The pandemic-induced economic slump has shaken the job-market, causing a spike in the number of freelancers. Due to this, there has been a significant decline in the rate-cards. Various industry estimates suggest that India has lost around 135 million jobs due to the pandemic, resulting in a staggering 35% increase in unemployment. In such a scenario, it is much tougher to acquire clients at your regular rates. Further, several freelancers report that the existing clients are renegotiating the contracts to bring down the rates in keeping with the new market reality.
There has also been a surge in the payment delays. Initially, I thought it was only happening to me until I discovered that it was a rather common phenomenon. While domestic payments have been delayed to 24-days from an average of 19 days earlier, international payments are taking double the usual time, says a study by Refrens, Bengaluru-based invoices and payment system for freelancers.
The Refrens report also says that there is a significant drop in the number of new assignments, in both domestic and international markets.
At the same time, the massive job losses also pushed businesses to outsource a lot of their work, which was earlier being managed by their in-house teams. This, in turn, has also created new growth opportunities for independent professionals. With digital platforms proliferating and the concept of work-from-anywhere becoming a new reality, industry onlookers see a growing trend toward the gig economy.
A report by ASSOCHAM says that the gig economy’s annual growth rate stays at around 17% and predicts that it will touch $455 billion by 2023. However, this report was released in January 2020 and did not consider the increase in number because of the COVID-19 pandemic. Anecdotal evidence indicates that the gig economy’s annual growth rate, primarily constituted by the freelancers, might have accelerated.
India has a massive number of freelancers with one in four freelancers coming from the country, according to a survey conducted by PayPal. This number is only going to increase in the post-pandemic world. Most of the freelancers are creative professionals such as writers, designers, and technology experts.
When The Going Gets Tough…
With no social security or Government support to speak of, what does this uncertainty mean for a freelancer? With work drying up and delayed payments becoming the norm, the business plans of most of the freelancers and solopreneurs have gone for a toss.
And we are not even considering the impact of the massive mental health issues this pandemic has thrown. The uncertainty of the coming few months and the accompanying anxiety is impacting the operational capability of the freelancers.
There is then a strong case for support from the Government for solopreneurs and freelancers. While some freelancers might be coming under the purview of MSMEs, the majority seem to be on their own. A legal framework to safeguard the interests of the freelancers will be a welcome step. A formal policy to ensure the fundamental wage rights will go a long way for the freelancers to become Atmanirbhar (self-reliant). A framework will also make it easier for the businesses to better engage with the freelancers.
Considering that the PM Modi’s Government has encouraged entrepreneurship by launching ambitious programs, such as Skill India and Startup India, it should now lend a helping hand and support the freelancers’ community during these unprecedented times.
DISCLAIMER : Views expressed above are the author’s own.