As a recent Forbes article pointed out, the pandemic didn’t create the freelance revolution, but it did accelerate freelancing growth and its acceptance as a legitimate career path. Here in the US, over 60 million US residents participate in the open talent economy as a freelancer, creative, or as a solopreneur trainer, therapist, or other working independent professional. 40% of the workforce in the US has a side-gig according to recent work by Zapier, repeating the findings of other surveys. Millions more contribute directly or indirectly to the expansion of the freelance economy as part of open talent ecosystem: Educators, investors, lenders, insurers and other professionals who enable the future of work to continue to rise.
Stretch marks are inevitable as any social movement and economy gives birth, and the freelance revolution is no difference. It has gone from virtually nil to multi-billions in market cap and funding, and an estimated contribution to global GDP of 1.25 trillion dollars USD. One of those stretch marks reflects the problem of financial exploitation of freelancers; more specifically, too many demands for free work.
Free work is, of course, at the opposite end of a freelancer first philosophy: A marketplace philosophy that prioritizes the success and prosperity of freelancers rather than a singular focus on client satisfaction and revenue growth. Matt Dowling, a well-respected CEO and founder of freelancerclub.net, a UK marketplace of 50,000 creatives, has been on a mission to promote a more ethical approach to hiring freelancers. That, in turn, led to his team’s survey of freelancer experiences of free work.
Let’s start with definitions: free work is work that doesn’t receive compensation for services rendered, and from which the client benefits. Pretty simple, but maybe not quite. As Dowling points out, we willingly do free work all the time. Common free work requests include data sharing, interviews, the invitation to speak at conferences, participate in a panel or webinar, and writing reviews. Individuals are not only asked to participate in these activities, they are often eager to do so believing it will enhance their reputation or create paid work opportunities.
Dowling’s survey found that there were many reasons why freelancers agreed to do free work, for example:
- 52% mentioned the value of exposure to a particular client or professional group
- 46% valued the experience of preparing and associated networking
- 44% identified the prestige of being invited; as one freelancer put it, “The allure of connecting with a cool company”
- 18% emphasized the opportunity to build a relationship leading to paid work in future
But, did their contribution deliver the benefits they sought? Not so much as hoped. Despite good intentions, the majority of freelancers were disappointed.
- 51% of the freelancers providing free work found the experience a net negative. They regretted providing the work without payment. Slightly more than half the freelancers were frustrated by the experience
- 22% described the experience as a wash; no benefit, but not particularly negative These individuals regretted the lost time or payment, but chalked it up to experience
- 27% found the experience intrinsically interesting or helpful, and were glad they agreed to it
The importance of equity
When freelancers report the value – or lack thereof – of free work, they are reflecting on what social psychology calls equity theory. When we benefit more than we invest our time or effort, we feel lucky. When we get less value than the time and effort warrants, we are frustrated and disappointed. Think of equity theory as an internal ledger or, more currently, a blockchain. People – work mates, colleagues, even spouses – add up what they give to the relationship, and the benefits they receive. If “give” and “get” are in balance, expectations are met and people are satisfied.
There’s a tendency when thinking about free work to focus on the individual freelancer and the importance of making intelligent choices. For example, a recent article advised freelancers this way:
“There are times when a quid-pro-quo agreement makes sense. “If you’re going to work for experience or exposure, that can sometimes be a good decision,” she said—as long as freelancers make sure it’s a trade of equal value.
“For example, helping a nonprofit create a case study in return for a byline or company logo on their website may be a fair trade. The organization gets quality work, and you get a chance to expand your portfolio and cover a cause about which you’re passionate. ‘That’s an equal exchange of power and could [lead to] a big break.’”
But there is another side. A power imbalance. Companies have the work, and too many companies are addicted to free work. They bring on interns to work for “experience,” ask freelancers to pitch their best ideas and project plans without compensation or commitment, and often use those ideas after the fact without acknowledgement or permission. Too many companies still have a tradition of wink-wink theft of professional services in the name of “show me what you can do.”
It’s the rare freelancer who doesn’t feel “nudged” to do free work. Perhaps it’s scope creep, a client asking for a little something in addition to the contract. It may be an invitation to teach a virtual brown bag lunch session on new methods. Or contribute to a webinar or a blog. Or coach the team on deploying a new tool or method. Perhaps a requirement to participate in meetings on weekends or evenings.
Recent freelancers are most susceptible, but freelancers in general are at risk. The recent Global Survey on Freelancing found that freelancers rated themselves lowest in competency areas like networking, making business connections, and being persuasive. Freelancers who aren’t self-confident are more likely to accept free work invitations hoping it will lead to a stronger client relationship and well-paid work.
Recent or new freelancers – under one year – are particularly vulnerable. The Global Survey found that early stage freelancers are typically least confident about their client relationship building. Consistent with this finding, the data also show that early stage freelancers are more dissatisfied with pay equity than other freelancers. Only 44% of first year freelancers say they are paid fairly by clients.
Marketplaces are sometimes the problem as well. For example, consulting and marketing freelancers are likely to be asked to prepare a full project plan. Coaches are often asked to give a free session or speech. Leadership trainers are required to submit a detailed curriculum in order to be considered for a training project. Moreover, in many cases the client doesn’t even have budget or even authorization for the project and is fishing.
The cost of free work
Free work isn’t free, of course. Dowling estimated that the typical freelancer in his survey left an average of 6K UK of uncollected wages “on the table” for the free work they had done. That is, 51% found it a poor investment of their time and effort. We cannot say what was freely offered versus nudged or through false promises.
It’s important to look at the bigger picture of free work. Free work can be a fair exchange of effort for equivalent benefit or future opportunity. But, absent fair exchange, free work is hardly different than intellectual property theft. The Intellectual Property Commission estimates that intellectual property theft costs the US economy $225 billion to $600 billion annually, or about 1% to 3% of the US’s GDP.
If we use the low end of that range – 1% – and divide the 1.25 Trillion USD in GDP that freelancing represents, nudged free work is a billion dollar transfer of value! That doesn’t seem right.
How can we reduce unfairly nudged free work by clients? Industry should consider setting an overall policy on free work, just as they have in other areas. Let’s define and share the rules of the road through professional associations and the active advocacy of freelance marketplaces: We need to be clearer about what free work is legitimate and what’s not, when it’s OK and when it’s not.
Dowling is on a mission to ensure freelancers are fairly and promptly paid for their work, and he’s gaining support across the UK and internationally. He points out it’s in the interest of freelance platforms like his to encourage fair payment for all work. As he put it, “This is an ethical decision to be sure, but it’s all about good business. When freelancers have had a good experience, have done well and are paid fairly, they are more likely to evangelize about the platform, and far more inclined to work with the client company again.”
Viva la revolution!