For decades, careers advisers directed students towards the professions, confident that success will lead to prosperity and stability. Today, while the prosperity is still on offer, stability is increasingly less guaranteed.
Corporate blue-chips are turning more and more to on-demand or contract professionals rather than traditional employees as the “gig” economy — the universe of online platforms where people buy and sell services and jobs — begins to nibble at long-established white-collar certainties.
According to Upwork, one of the leading online platforms for the on-demand workforce, more than half of the 30 companies on the Interbrand most valuable brands list were regularly hiring freelancers through its online marketplace.
Though not as well known as the more popular models of the gig economy such as Uber for minicabs and TaskRabbit, which mainly focuses on manual jobs, Upwork claims to have 9m freelancers registered on its site who carry out $1bn worth of work annually.
Its pitch is firmly at the professional end at the market: accountants, web developers and 3D design are currently some of the most in-demand skills.
Another major player is the Australian company Freelancer.com, which has more than 16m registered users. In the second quarter of this year, it reported a surge in the number of ecommerce and data processing jobs advertised on its site. The company also recently scored a publicity coup when it partnered with Nasa, the US space agency, to create a contest to design a smartwatch app for astronauts.
While Upwork names companies such as Panasonic, Pinterest and Unilever as users, there is a general reluctance from big companies to speak publicly about what sort of roles they use the site for.
Stephane Kasriel, chief executive of Upwork, believes that will change. “Ten years ago nobody wanted to admit that they were using online dating sites or that they had found their spouse on an online dating site,” he said. “Now it is totally mainstream.”
The dating analogy is apt: Upwork has hired web engineers from the ranks of online dating sites to try and match its clients, both freelancers and employees, more successfully.
One senior executive at an international pharmaceutical company who has set up a private cloud function with Upwork — essentially giving it access to a subset of freelancers who have passed additional background checks — told the Financial Times that he had saved about $2.5m over the past year by using the platform instead of traditional employment agencies.
Traditional recruitment agents, who would normally supply people on fixed-term contracts, are watching platforms such as Upwork with interest but say they are far from worried.
Kate Shoesmith, director of policy at the Recruitment and Employment Confederation, said the agency business is booming as employers are increasingly looking for freelancers who can fill “strategic skills shortages”.
PwC, the professional services firm, estimates that online recruitment holds only about 2 per cent of the total recruitment market at present but expects this to grow rapidly. It believes that the “connected work marketplace” — a wider definition of the gig economy that includes the various forms of freelancing, professional websites such as LinkedIn and remote work apps such as GoToMyPC — is set to reach almost $63bn globally by 2020, up from about $10bn last year.
While in recent months growth in the number of self-employed has slowed, the UK freelancers’ association IPSE said that at the end of 2014 there were 1.88m “independent professionals” working in the UK, a 35 per cent jump from 2008.
The biggest growth has been seen in IT, health, and art and literacy occupations. There is a “major change in the way work is performed — a shift from having a job to working for clients”, the association said.
There are big unresolved questions about the consequences of this shift, especially in terms of the loss of employment rights and access to traditional workplace benefits such as pensions.
And while for some professionals this is a route into well-paid short-term contracts and cuts out recruitment agents, for others the white-collar gig economy can mean a few days or even hours of work only — the equivalent of zero-hours contracts — with stiff competition driving down rates.
Even so, in some fields the move away from the traditional employer-employee relationships is accelerating. In London, it is rare to find an IT department that is not reliant on contract staff — even if it would prefer to fill its permanent vacancies.
Ms Shoesmith said that in roles such as engineering and IT, the same companies that are hiring contractors also have open permanent roles. “They are looking for permanent workers but they cannot find them.”
Oded Ran, chief executive of Touchnote — an online service that converts photos into physical, personalised postcards — has hired both full-time and contract staff through Upwork. He started using the site because initially he was unable to find people in London, but said now for “any role in which we do not require a physical presence, [online hiring] is a no brainer”.
“The fact they might be based in eastern Europe is absolutely fine, as our servers are in the cloud anyway.”
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