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The rise of the freelance economy

by Tom Pattinson
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Freelancers and the self-employed who make their own choices of where, when and who they work for is on the rise globally. And for China, it is also a key growth area as young professionals are realising their value to overseas customers, writes Tom Pattinson

It’s increasingly rare to find a worker in the UK who is willing to spend their 40-year career working for ‘the man’. Workers – especially millennials – are demanding more flexibility in work hours and a better work-life balance. And companies are adapting accordingly, providing everything from work at home days to bring your dog to work days in a bid to retain staff and keep them happy.

Employees don’t want to be tied to a desk all day and want the flexibility of working when they want, from where they want. Compared to previous generations, there has been a change in culture and young workers (who often value freedom, excitement and challenges over pensions, insurance and stability) are choosing to work for themselves, as freelancers, setting their own terms.

For many companies, having a lower headcount is also in their interest. It means they can bring people on, as and when they need them, rather than be tied to high fixed staff costs.

In China, the phenomenon is relatively new. A job for life – known as the Iron Rice Bowl (because it could never be broken) – was regarded as a dream career path. Working for the government, a state-run company or a multinational organisation would provide not only a solid regular monthly salary but also pay China’s high cost of social insurances (pension, housing, unemployment benefits, education, medical and maternity).

For a long time, companies in China were graded not on their revenue or profit but on their headcount. However, Chinese companies are being encouraged to become more efficient and for many, that means reducing their number of employees.

This squeeze from both employee and employer side has given rise to a gig economy, where people are more likely to work on a project by project basis rather than a full-time contractual basis.

Professional services such as writing, translation and consulting are helped by technological advancements that allow a translator in Shanghai to work for a client in Peterborough or a designer in Mumbai to work for a client in Chicago. And for many British companies working with China, this has come as a solution to many of their problems.

Recruiting and retaining a full-time member of staff in China is often challenging to manage and costly to employ for many British companies, especially if they don’t have a registered company in China. Therefore, to easily find a person who can translate a document, redesign marketing materials or consult on the local market can be hugely valuable and cost-effective.

It is now easier for a freelancer to self-enrol and pay their own social security contributions ensuring they remain ‘on grid’

According to Jenny Chen, a human resources freelance consultant, the gig economy is a growing trend among three main types of demographic: The older generation who decide to quit the corporate rate race to go freelance; the mothers who, after having children, don’t want to quit work entirely; and thirdly the young post-90s generation who care less about financial interests but want to develop multiple skills and have the flexibility to work when they want.

In China, all employees would traditionally belong to a work unit (or danwei) that was fundamentally responsible for their wellbeing and would contribute to their social insurances. However, by working as a freelancer they do not have access to a danwei, meaning the worker would be out of the system and have to sacrifice these benefits. Nowadays, says Chen, it is much easier for a freelancer to self-enrol and pay their own social security contributions at the social security bureau, ensuring they remain ‘on grid’.

Increasingly young workers are preferring freelance roles as a lifestyle choice rather than a financial choice

The rules regarding tax and social insurances change frequently in China and Chen advises all companies to be up to speed on the most recent rules. However, the tax and social security burden is high to employers, and therefore many companies look for alternative methods to hire staff – with freelance recruitment being an obvious one.

Charlene Li is one such freelancer based out of Shanghai. She provides marketing consulting and brand communication creative services to overseas clients. “It’s a choice of lifestyle, rather than a choice of money,” says Li. “The agile way of working allows me to allocate my time and efforts efficiently,” she explains.

Hugh Chan used to be a full-time translator but now has started working as a freelancer. “I like the freedom and choices of being freelance,” he says. However, the lack of a stable income does sometimes concern him, he says.

Both Chan and Li work via an online platform called Crayfish.io that links freelancers with companies who are looking for help with professional services such as design, copywriting, sourcing and translations.

“At Crayfish.io we provide access to freelancing expertise to support such activities in a novel way by leveraging our global network of Chinese speaking talent on our platform,” says Ting Zhang, CEO and founder of Crayfish.io. “As well as offering bespoke strategic help to enable companies to tackle the Chinese market, we provide access to qualified Chinese speakers in their specific fields.”

This has benefited companies like UK based Argon Design Ltd, who have business clients in China. Crayfish.io has enabled the company to find freelancers who are versed in the technical terminology needed in the electronics and software industry, and who can translate quickly, efficiently and cost-effectively.

“We have occasional need to translate technical documents; either press releases or product documents,” says Argon’s CEO Alan Scott. “The Chinese translators have a strong work ethic because they engage with us directly, the site provides the bid or offer, commercial and contact route, but then we exchange messages directly with the translator. We can use the same the translator for subsequent projects, still via the Crayfish.io online platform, so we can then start to build a relationship with them,” says Scott.

Around the world, the nature of work is changing fast and for companies operating in China that want to maintain a competitive edge, it is important to be aware of these changing trends.


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