Cleveland Catches The Wave For On-Demand Economy
The government doesn't regularly keep tabs on the number of people working as freelancers, consultants or the myriad of other names that make up the "non-employee workforce. " But business researchers do and they estimate about a third of Americans work this way now. Projections are that 40 percent or more will be doing so within five years and for most it'll be there primary source of work income. Cleveland appears to be part of the national trend. "So in Cleveland we're seeing business really embrace hiring freelancers," says Rich Pearson. "In fact it's one of our fastest growing cities." Pearson is a senior executive at Elance-O'desk, a global company headquartered in California. Elance is part of a fast-growing cadre of services, apps and platforms that connect employers with freelance talent ready to take individual assignments, or be part of teams that often disband once a project is done. The work may take months, or just an hour.
Tech jobs have been in this "contingent" workspace for a while. The trend has gone way beyond that now. "Accountants, lawyers, writers," Pearson says. "Really anything that you can do and deliver via the internet you can find" through web-based companies. Pearson says four thousand independent workers in Cleveland use its service - "a 50 percent gain just in the past year." Part of the attraction is that there are no geographical boundaries in the hunt for work. "Previously, freelancers were limited to local clients but now they can put their talents on line and have access to businesses around the world."
Some enter this way of working by choice; others by circumstance. For graphic designer Gerette Braunsdorf it's a bit of both. "I think it's become a necessity for a lot of people to cobble together an income from a number of different streams," Braunsdorf says. "I've expanded my own work to doing copy editing." Braunsdorf relocated to Cleveland almost ten years ago and began working as an independent contractor. All of her clients are in DC or L.A. They pay more than she could command from clients here.
A stay-at-home Mom, she likes getting to choose which assignments to take, the flexible schedule and limited work hours. But she says it is a mixed bag. As with most freelancers, her work doesn't come with benefits. Braunsdorf says she couldn't afford to work this way if her husband didn't have a regular job with health insurance. She's also come to a new realization about the security of a traditional staff job. "Companies no longer have any loyalty to their staff," she says. "I've seen too many put in too many years at large co and then get 'turffed out' for whatever reason, a downturn, politics, whatever. These people after a while, they get bitter. I don't want to work for a company anymore because I value myself more than they will ever value me."
Mark Zaino says, "that's true. They can't commit as much as they used to." He's CEO of Virginia-based MBO Partners, another global company. It provides "back-end" administrative services for 50-thousand self-employed professionals and for the hundreds of companies that use them. MBO handles billing, liability insurance, tax compliance and the like - so the freelancer and the client can focus on the work product.
The main reason more employers are expanding their use of freelancers, Zaino says, is that traditional jobs and staffing structures aren't nimble enough in a world of rapid innovation and intense competition. "It's primarily the need of speed for these companies to get access to talent, to keep their cost structure more variable. When there is more uncertainty you will have less commitment to a longer term cost structure like a full-time position."
The widening "on-demand" economy gives employers the flexibility to hire when the work is there and easily shed talent when it's not. That often lands independent workers in a feast or famine world. Despite the risk, some polls show the majority of freelancers would not take a traditional job even if offered.