JP Villanueva
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- Work-Life Balance Imbalance - July 19, 2024
- Freelancing is Freedom - July 12, 2024
Since the pandemic, freelancing has become more common in the Philippines. Freelance jobs are those where a person works for themselves, rather than a company. It is basically the same as independent contracting, except that for independent contracting, there is a legally-binding contract while freelancing does not.
I know several friends who have ventured into this field. Some of them came from BPO companies. Some of them from regular office jobs. And one friend, Charlyn, in particular, who was working in a government agency wanted to earn additional income while she can take care of her children at the same time.
There is no doubt that the BPO industry in the Philippines has contributed a lot to the GDP of the country, and the contributions of employees in the service sector cannot also be discounted. However, the contributions of the freelancers to the economy may not be as recognized as the two mentioned earlier. So how does the freelancing “sector” really affect the country’s economy?
First is related to the labor market. The demand for freelance work can vary significantly by industry, with technology, writing, design, and consulting being some of the most common fields. That particular friend of mine is a copywriter. Some friends are virtual assistants. It is just fortunate nowadays that access to the global labor market is easier now because of advances in technology. The rise of platforms like Upwork, Fiverr, and Freelancer.com has facilitated the growth of the gig economy, making it easier for freelancers to find work and for employers to hire temporary workers.
On income and earnings, freelancers often experience fluctuating incomes due to the project-based nature of their work. Earnings can be influenced by factors such as expertise, reputation, and the ability to secure consistent contracts. One can earn more given better circumstances. Freelancers can charge by the hour, by the project, or on a retainer basis. Effective pricing strategies depend on market rates, the freelancer’s skill level, and the complexity of the work.
With regard to costs, freelancers are responsible for their own expenses, including equipment, software, marketing, and office space. These costs can vary depending on the nature of the work. Sometimes, equipment is provided by employers, but these are special cases. Like this one friend who’s laptop including the router were provided. On the other hand, unlike traditional employees, freelancers must manage their own taxes, often paying both income tax and self-employment tax. They also need to arrange for their own health insurance, retirement savings, and other benefits.
While freelancing can be relatively easy to start, building a sustainable career can require significant time and effort to establish a reputation and client base. The internet allows freelancers to access clients worldwide, increasing competition but also expanding potential opportunities.
Regarding the domestic economy, freelancers contribute significantly to the economy, particularly in creative and tech industries. Their flexibility can help businesses scale quickly and innovate. Freelancing provides labor market flexibility, allowing workers to take on projects that suit their skills and schedules. This can lead to increased job satisfaction and productivity.
Aside from economic factors, there are other factors that are affected by the freelancing “industry”.
On social and psychological factors, including work-life balance, freelancers often have more control over their schedules, which can improve work-life balance. However, the lack of a structured environment and job security can lead to stress and burnout. Another on social isolation. Working independently can result in social isolation, which some freelancers mitigate by working in co-working spaces or networking with other freelancers.
On technology and innovation, technological advancements have made it easier for freelancers to find work, manage projects, and receive payments. Collaboration tools, project management software, and online payment systems are crucial. Automation and artificial intelligence could impact the demand for certain freelance services, either by creating new opportunities or making some skills obsolete.
The economics of freelancing involve a balance of opportunities and challenges. Just like Charlyn, it offered flexibility and autonomy for her but it required careful financial and career management in order to fully benefit from this “career”. For the broader economy, freelancing contributes to innovation and labor market efficiency but raises questions about worker protections and income stability.