21st April, 2020
COVID-19 might be hurting major segments of the ‘gig economy’, but growing job rejections and cost-cutting competitors need not spell the end for all contractors and freelancers.
With Australia’s Department of the Treasury forecasting that the jobless rate could reach 10 percent, all but confirming the country will enter a recession as it deals with the COVID-19 pandemic, many Australians are not only counting their pennies but have become increasingly reluctant to part with them.
In particular, the retail sector has been hit hard by COVID-19. And retail job competition is set to get even worse, with reports that recently laid-off Qantas and Jetstar workers are already seeking temporary contractor positions with the likes of the Woolworths Group.
It’s a wake-up call for so-called ‘gig economy’ workers that they’re now well and truly on their own. True, Coles recently announced 5000 additional casual positions, which attracted more than 36,000 applications. Many will miss out.
Kendra Banks, managing director of Seek in Australia, has been quoted as saying the Seek website is seeing increasing demand for nurses, aged care workers, counsellors, and social workers, as well as nannies and tutors.
Demand for home food deliveries is at an all-time high, and therefore an option for anyone with a car or motorbike. Workers are also still in demand on farms and in packing sheds.
For others, such as a professional house painter, for example, (who’s going to even let you in their door to write up a quote?) or Uber drivers (with firms of all sizes urging workers to stay home and restaurants and bars closed, who’s going anywhere?), the outlook is bleak, and the same applies to numerous franchisees across multiple service sectors.
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When it comes to business-to-consumer (B2C) entities, the current crisis has highlighted the precariousness of ‘gig work’ performed by independent contractors who don’t receive sick pay, workers’ compensation, or health benefits. But what about those whose bread and butter comes from business-to-business (B2B) assignments?
As a glance at sites such as Jora confirms, there are still freelance gigs available across many industries, but to a large extent it all comes down to an individual’s areas of expertise.
“Most major corporates learned from the GFC, bird flu and SARs outbreaks, and now have well-documented business continuity planning strategies in place, which means they are already prepared to at least weather the fallout from COVID-19, and therefore less reliant on individual contractors,” said Anne Morrow, a recently retired Johannesburg-based career development consultant.
“On the other hand, a survey some time ago of more than 1000 small business owners in the UK revealed that only one-third of SMEs were taking adequate steps to ensure their business could continue to operate normally in the event of a disruption.
“For example, 40 percent said a computer hardware failure would be detrimental to their business while only 10 percent said they would be able to function as normal, and that study didn’t factor in the probability of staff absenteeism during a pandemic.”
Although many small businesses are struggling, they still appear to be the best lifeline for contractors whose backs are suddenly against an economic wall.
Reaching out to former clients is an obvious first initiative, but it’s a buyer’s market and with so many contractors in the same boat, the competition is fierce. You might be the best person for a potential job but be prepared to accept rejections.
It’s a perfect storm: competitors are prepared to undercut on price, and with so many small businesses cash-strapped, brand loyalty is no longer the consideration it might once have been.
READ: FAQs on JobKeeper for sole traders
Should you go down the same path?
Almost certainly not, because it will inevitably result in a downward spiral. As word gets out that you, too, are discounting — and it will — most competitors will only lower their prices in kind, further undercutting your chances of growing your business or at best stabilising revenues.
Whatever you decide, never agree to an unpaid gig on the premise it ‘might’ lead to paid work in the future.
Rob (surname withheld) spent over three decades in senior marketing roles before deciding to start his own consultancy.
“Be careful about how you provide service and share IP [intellectual property],” Rob warned.
To emphasise his bona-fides to one small advertising agency, he worked for nothing for a week. “Didn’t hear another word from them,” he said. “They took my work and somehow implemented it without me. Lesson: never give away knowledge or skills.”
Rob has since given up on contracting and returned to a full-time position.
For some – especially those in professional services – making cold call pitches may be an option. But for others, say, if you’re a house painter, it’s probably not going to work.
But, even with Netflix blaring in the background and the kids stir-crazy, there are still plenty of practical measures that might help reduce stress and, more importantly, open future opportunities.