Freelancing in the Digital Age: The Freedom and the Fear

Business.com / Careers / Last Modified: February 22, 2017

Freelancing has never been such a prevalent career option, but with the rewards come the risks. Here's what you need to be aware of.

“I offered Richard the service of my Free Lances, and he refused them — I will lead them to Hull, seize on shipping, and embark for Flanders; thanks to the bustling times, a man of action will always find employment.” ––Ivanhoe

Freelancers can trace their job title back to the 12th century when Sir Walter Scott introduced the term in his 1819 novel, Ivanhoe.

His free-lance characters were medieval mercenary warriors who were not sworn to any lord’s services.

Free, of course, meaning “unbound” not without cost. Seems Ivanhoe was quite confident of his ability to secure work. Fast-forward nine centuries and Ivanhoe may find our digital landscape as challenging to navigate as his 12th-century marshes and mountains. 

Related Article: The Future of Work: Freelancing Goes From Rags to Riches

For the past two decades, Americans have felt a shift to a new kind of work. The traditional “full-time job with benefits” is becoming less and less common, replaced by a new gig-to-gig, project-to-project work life––fueled largely in part by the digital age. The internet and social networking have revolutionized how to find and access work.

During the last 3-4 years, hundreds of websites have been launched that provide service to freelance workers and outsourcers such as Freelancer, Elance, and Upwork. According to a study done by the Freelancers Union and Elance-oDesk the vast majority of freelancers (69 percent) said social networking has “drastically changed the dynamics of networking.”

Four in ten (42 percent) have done an online freelance project, meaning they found and completed the gig entirely online. When people look for work online, it’s relatively easy to find it — 31 percent of freelancers said they can find a gig online in less than 24 hours. BUT, is it a gig worth having?

Before jumping ship and going medieval mercenary in a digital quest for work, here are five potential challenges to consider about the digital landscape and freelancing:

Consistently, Inconsistent Work

Despite the convenient notion of working in one’s pajamas from home, relying on the Internet to scope out and secure business can be a roller-coaster ride. The prospects of finding one, solid gig aren't that high in the virtual job-bidding world. Instead, you may find yourself needing to get comfortable with numerous smaller gigs—each of which has their own timelines. You can be limited to when clients have jobs available for you and how "meaty" those jobs can be.

A Virtual Coliseum of Competition

The flipside of not being geographically contained is the playing field is quickly filled with many players. There is usually a high level of competition, especially on freelance websites where thousands of freelancers can bid for just one job posting. To give you an idea, Freelancer.com has over 17 million registered users and counting.

Clients looking for freelancers have a seemingly endless supply of freelancers to choose from. Making yourself stand out can be an ongoing challenge of tweaking and updating your credentials and finding different ways to make your talent jump off the screen. Price competition is also a problem as new designers offer ridiculously low prices for job bids, just to get ratings.

Related Article: Workforce Redefined: How Freelancing Became A Fully Fledged B2B Relationship

Risk of Getting Played Not Paid

Jobs on freelance posting sites can pay high but you stand the chance of not getting paid for your work since there’s no billing department to call, and no payroll department to cut you a check if clients don’t pay their invoice.  Granted, there are numerous sights that have protective payment measures in place for freelancers, however on the flipside that payment control is also in the hand of the client.

For example, Freelancer.com has a "Secure Milestone Payment System" that enables clients to withhold payment until they are completely happy with your work. Which begs the question, "what is completely happy" and is putting the likelihood of getting paid under the conditions of what could be unreasonable expectations a good idea? Check out this guy's experience of getting paid in the digital "gig."  

Sweating the Small Stuff

There is a lot of electronic "paperwork" and administrative tasks involved with using freelance job websites. If you're using multiple sites to help you find work you may find yourself spending a lot of time navigating their various requirements, platforms, and processes.

It's important to think about the time it takes to administer all the busy work. If you’re earning $50/hour as a freelancer, but spend 5 hours doing your admin each week, you could be losing $250 a week.

Out of "Site," Out of Mind

When you find and secure work via freelance websites without ever meeting face-to-face, you run the risk of becoming forgettable. Also, virtualization of relationships with clients is associated with greater moral hazard risks and fewer opportunities for dispute resolution.

According to a study done by the National Research University Higher School of Economics (HSE) freelancers using online marketplaces for job searches are more likely to face issues such as the disappearance of a client, fully or partially unpaid fees, changes in initial requirements and specifications, and payment delays.

Related Article: 15 Best Freelance Websites in 2015

The advantages of not being tethered to a desk are many. However, there are some very real challenges that come with trading the traditional work environment for a virtual one. You may find the benefits outweigh the challenges.

However, being vigilant to the potential pitfalls of freelancing in the digital age is the best armor for any modern day Ivanhoe

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