One of the widely predicted effects of the current financial crisis is a large increase in the number of freelance workers. Even before the world's financial institutions started to tumble freelancing was growing fast along with flexible working and outsourcing. But could freelancing soon be as outmoded as the 'job for life'?
The original 'freelances' or 'freelancers' were mercenaries, literally 'free lancers'. Today we're hired more because of our skills in writing or programming than for our jousting prowess, although the thought of riding into an office on horseback does have a certain appeal.
From a company perspective freelances (without armour!) have long offered a cost-effective means of hiring specialist skills to complete short-term projects or to cope with the ebbs and flows of business. At a time of economic turbulence, freelances have provided a way of filling gaps and grabbing opportunities without the long-term costs of employing permanent staff. Freelances are sometimes cheaper and always more disposable, but their relationship with a company is still basically that of an employee.
But this downturn comes at a time when knowledge work has changed dramatically. Many of the practices that have continued since mass production created the industrial revolution are now obsolete. Large offices are just factories for knowledge workers where businesses reaped the economies of scale from sharing resources, most recently in the form of data networks. Now, for millions of workers, there is no real need for them to physically vist the office to access those resources. They're available anywhere with a dial tone. Physical offices are often just a drain on resources.
The internet means companies can use the best and most economical knowledge workers wherever they are in the world. You only have to look at the growth of flexible working and global outsourcing to see how businesses are taking advantage of these possibilities. But they're also having to change their working practices.
Partly this is because you can't see what anybody is doing if they're not in the office. The focus has to be on outcomes. Logic might suggest that requires the creation of very detailed and specific goals. The problem is if there is no room for manoeuvre the results are unlikely to surpass the lowest common denominator. Improvement is actually discouraged because it might not fit the detailed specification.
Arguably, the most effective form of outsourcing is one which uses collaboration rather than instruction. Outcomes may be drawn up more loosely so there is room for initiative from the individuals or groups doing the work. At some stage the outcomes will become more important than the organisation.
If that point is a little too philosophical, the current financial crisis is also creating conditions which encourage alternatives to freelancing. Although the length and depth of the downturn is impossible to predict, it's certain that credit will be harder to find and more expensive. Immediately, that's going to cause problems for companies lumbered with large amounts of real estate. Even if they downsize, outsource or otherwise reduce their cost base, they're still going to be left with a dubious physical asset on their balance sheets. They're going to face a threat from newer, unencumbered businesses.
And, when the downturn ends, credit is still going to be tight even though companies need to invest to survive. If your business is, for example, selling phones, MP3 players and computers, you'll be left behind if your designs are two years old. Somebody else is going to be making something faster, more desirable and cheaper.
One way of continuing development through the credit squeeze is by spreading risk and reward. Instead of employing freelances to complete projects, allow them to self-organise as partners. It's not a new idea. Any even slightly complex product we buy is a combination of components from different manufacturers with a multiplicity of intellectual property owners. The internet enables collaboration on a massive scale to create products such as the Firefox browser and Linux operating system. On a commercial level eBay and Amazon provide a platform for hundreds of thousands of small businesses.
Ki Work is another platform that has the potential to extend the collaborative, virtual and flexible way of doing business. It offers a low-cost framework for knowledge workers to come together to create highly-flexible virtual organisations. These can either sell their services to larger businesses or, as may become more the pattern of modern commerce, collaborate with other organisations to create something so new we don't really have a name for it yet.
Welcome to the 'virtual collaborative corporation' - virtual business, powered by freelancers. Is this the new wave of employment that will rise out of the destruction of the financial system?
(photo credit: leicester county council)