Freelancing has become a popular career choice in the post-Covid19 world. With the flexibility to choose clients and projects, freelancers can create a career path that suits their skills and interests. They can pursue passion projects or use their expertise to take on projects and take control of their financial future.
Freelancing is a lucrative market, with 1.57 billion freelancers worldwide generating around $3.39 billion in revenue for the freelance platform market alone. Anyone with skills can claim their share by showcasing their abilities as a freelancer. Freelancing can add to one’s income as a side hustle or become a full-time career. Self-employment is essential for job creation, especially during recessions in developing economies.
Having said that, freelancing comes with its set of challenges, which, if not handled effectively, may lead to stress and frustration. These challenges range from gaining market recognition to navigating transfer fees and tax issues. While the list is not exhaustive, we will discuss some of the most common challenges freelancers face.
Recognition & Acceptability
Freelancing is not a walk in the park, as some might consider; it comes with its share of challenges. One of the primary hurdles they face is building a reputation and gaining the trust of potential clients.
- Establishing oneself as a skilled and reliable professional takes time and effort; until that happens, freelancers may find it challenging to secure consistent work.
- In addition to a highly competitive market, freelancers must contend with an uncertain income. As a result, financial planning can be challenging without the security of a steady paycheck.
- Clients view hiring new freelancers as a liability risk, making it challenging for freelancers to secure work directly. In addition, using outsourcing marketplaces comes at a higher cost for both parties.
- Not being recognized as a separate entity can hinder their chances of benefiting from government-led or commercial banking schemes for the financial assistance one needs in the initial stages of freelancing.
To thrive as a freelancer, one must proactively manage these challenges. Developing strategies to establish a strong reputation, managing finances carefully, and finding ways to differentiate oneself from the competition are all crucial steps to success in this highly unpredictable and competitive market.
Market & Finance Accessibility
For freelancers, discovering a market to offer their services and acquiring financial resources can often be a daunting task that can be exhausting and discouraging.
- Newcomers may find it hard to determine appropriate rates and manage payments. Setting rates too high may turn away potential clients, while too low rates can undervalue the freelancer’s skills and expertise.
- Limited access to direct customers can hinder freelancers from developing their international outreach. Instead, they must rely on freelancing marketplaces with cumbersome registration processes and requirements.
- The success rate of freelancing remains low as they have to keep switching between different marketplaces to get a new gig.
- Lacking access to initial capital is a critical drawback for new freelancers as they need an initial financial push to start their freelancing journey.
Freelancers must actively address these issues to ensure their success in the freelance market, seeking resources and support, developing a solid online presence, and networking with other professionals in their industry.
Quality of Services/Skills
Maintaining the quality of services can be challenging, and consistency is the name of the game!
- Without oversight, freelancers may become complacent and produce low-quality work, harming their reputation and making it difficult to find new clients.
- Upskilling is another area where freelancers must be vigilant, considering ever-evolving technology and market demand.
- In a globalized market with unlimited choices, client expectations are high, and there is a vast pool of freelancers to choose from. Winning over high-quality clients can be challenging, especially for new freelancers.
To maintain quality and stay at the top of their game, freelancers must maintain high professionalism and commitment to their work. They should set clear client expectations, deliver work on time, and continuously seek feedback and improvement. It’s also essential to stay up to date with industry trends and best practices to stay relevant!
Inequitable Wages
Getting fair wages for one’s skillset is another issue that can become frustrating. With no employer to negotiate salaries and benefits, freelancers often struggle to earn competitive pay for their work.
- Global markets are saturated, and customers have unlimited options in marketplaces; the clients often label certain regions with lower wages.
- Such bias results in offering inequitable wages to freelancers who deserve more for their skills and expertise. As a result, freelancing doesn’t provide the individual with the expected return on investment and becomes a cause of stress and frustration.
To succeed as a freelancer:
- Focus on building a strong reputation, becoming an expert in your field, and charging competitive rates.
- Invest in professional development, seek out high-quality clients, and specialize in high-demand skills or niches like web development, digital marketing, and content creation.
Transfer Fee & Tax Issues
Financial management is another thing that gives nightmares to many professionals, including freelancers.
- Freelancers must pay taxes on their income, which can be complex and time-consuming. In addition, they must comply with local tax laws and regulations and keep accurate records of their income and expenses to avoid penalties and legal issues.
- It is usually seen that freelancers are reluctant to register with local registration systems and authorities for fear of being exploited. It may not be true, but the perception may drive freelancers away from registering their work under a legal umbrella.
- They may have to pay transaction fees when receiving client payments, which can reduce their income and profitability.
This challenge can be met with vigilance regarding the payment gateways being used.
- Freelancers can search for payment platforms with low transaction fees or negotiate fees with clients.
- They can also collaborate with tax professionals to ensure compliance with local tax laws, take advantage of deductions and credits, and stay updated on tax regulations.
- Freelancers need to stay informed about changes in tax laws and regulations that may affect their business.
Incentivization Challenges
Incentivization is used in various sectors to enhance the productivity of the industry and its workforce. Freelancers need such initiatives to enhance their interest and income, resulting in GDP growth and improved socio-economic state.
- Governments, international donors, and NGOs continuously work for the well-being, upskilling, and enablement of remote workers vis-à-vis freelancers; however, a large sum of such investments goes down the drain due to limited knowledge about the most deserving individuals and professionals.
- Freelancers working project-to-project do not receive benefits like paid vacation or health insurance, which can impact motivation and productivity.
- Freelancers struggle with building long-term client relationships due to the nature of their work, resulting in inconsistent income and workloads. This makes it challenging to plan finances and invest in their businesses.
To succeed as a freelancer, prioritize strong client relationships and consistent quality work. Offer additional services like maintenance or consulting for recurring revenue. Collaborate with others to expand services and skills. Join professional organizations for networking, training, and growth opportunities.
It has become inevitably more critical than ever that this new form of the workforce be recognized and given equitable rights in the ecosystem for long-term socio-economic benefits of society. However, there is no universal system in place that could address these issues comprehensively. Moreover, the policies and regulations concerning remote work via global value chains are becoming more cumbersome. To live up to this new set of expectations, there is a dire need for a worldwide enablement system for freelancers to be able to comply and work systematically.