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The pros and cons of independent contracting for employers and workers

The future of the gig economy from the perspective of the employer vs worker

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In 2020, the onset of the global pandemic triggered a surge in freelancing. With economies under pressure, the rate of redundancies was sent soaring – forcing professionals to carve their own path as independent contractors.

An independent contractor often carries out similar functions to an employee, but works autonomously, sourcing their own clients to whom they provide services and earning remuneration through carrying out work or “gigs” as required. Their responsibilities are often project-based, meaning they do not work solely for a single employer as an employee would.

As the world emerges from the aftermath of Covid-19, businesses and their employees are exploring what the future looks like for the gig economy and whether it is the best route for employers amidst a shortage of talent.

Current Trends

Mercer, an American asset management firm, recently highlighted gig economy trends in its “2022 Global Talent Trends Study, ‘The Rise of the Relatable Organization’”. 11,000 respondents were surveyed across sixteen countries and thirteen industries. The respondents consisted of C-suite executives, HR leaders and employees.

According to Mercer, 6 out of 10 C-suite executives expect gig workers will substantially replace full-time employees at their company within the next three years. In contrast, fewer than 6 in 10 employees who work for a single company today would consider freelancing – a number that has decreased from 2020, when 9 in 10 workers said they would consider freelancing.

“The reasons given illustrate a monumental change in attitude,” the report states. “Before the pandemic, losing one’s job was by far the strongest impetus for considering gig work (from 22% in 2019 to only 2% in 2022). Now, the top drivers for freelancing include increasing earning potential (21% in 2019 to 48% today) and gaining greater flexibility and freedom (from 14% up to 42%).”

But as businesses alter their employee benefits to adapt to the fast-changing ‘desirable’ workplace, full-time roles are becoming more flexible and more focus is being placed on a healthy work-life balance – does this make the benefits of freelancing less attractive?

With the future of gig work under speculation, we summarise the pros and cons of freelancing from the differing perspectives of the employer versus the employee.


Employer Perspective


Reduced Cost – Hiring freelancers is a cost-saving solution for employers seeking project-based support. Businesses can avoid paying for employee benefits and the onboarding costs of a full-time, new employee. In many cases, there is also no need to provide their work equipment – meaning employers only have to pay for the labour received from the gig worker.

Meet goals faster – Sourcing a gig worker can further accelerate progress towards business goals. With a lack of dependency on the business, freelancers do not require office space, equipment, or any employee benefits from the organisation – meaning setting up a freelancer is faster compared to the onboarding of an employee. Freelancers can be sourced fast for specific jobs, allowing employers the ease of hiring as and when they need.

Diverse talent pool – Utilising the gig economy allows businesses to access a wide talent pool of flexible workers. Independent contractors often work varying hours compared to the standard business hours of an employee, allowing employers to benefit from early morning or late-night tasks. With various skill levels and abilities, gig workers can also bring creativity and fresh ideas to the organisation.



Less reliability – Due to the fact that independent contractors work on their own schedule, under their own rules, there could be a potential risk of reliability. With many freelancers working remotely, it may be more difficult for employers to oversee the task at hand. This could result in communication issues and a lack of control over task progression. Employers should take caution when hiring an independent contractor best suited to their business needs, ensuring communication of timings and objectives are clear to the gig worker to avoid any mishaps.

Strict regulations – Businesses must also understand that engaging in an independent contractor comes with many regulations. Regulations differ from country to country and from state to state. Some locations require written agreements while others are “at-will” statements, which allow the employer or the worker to end the relationship at any time. Employers must further consider the varying tax laws and ensure the worker is not misclassified as a freelancer. For assistance in managing gig workers, think about engaging in a third-party organisation like Mauve Group to ensure full compliance.


Worker Perspective


Flexibility – One of the biggest reasons for considering freelancing is flexibility. From working to your own schedule to engaging in your choice of companies and tasks – there is a great opportunity for freedom as an independent contractor. A freelancer will often receive a deadline for a task, but it is up to them to decide how and when they complete it within that time. In many cases, it also allows them to work remotely or wherever they choose, which can appeal to individuals with young children, people who love to travel, and those with commitments at home.

Independence – With flexibility comes more independence. As independent contractors, workers have more control and autonomy to complete their assignments in a way that they believe works best. There are no obstacles of micromanagement or dependency on colleagues, allowing professionals to work on a basis that suits them.

Variety of jobs – As an employee, workers can often find themselves completing the same day-to-day monotonous tasks that were agreed upon in their job description. Gig economy workers have the freedom to choose from a wide variety of jobs, meaning they are able to find enjoyment in working on diverse, exciting projects.



No employee benefits – One of the biggest downfalls of becoming a freelancer is the lack of benefits. Gig workers should take this into financial consideration as it may require them to purchase their own private insurance and budget for other expenses that they wouldn’t have needed to consider as an employee.

Responsibility for tax payments and personal expenses – Independent contractors must also consider the costs of taxes and personal expenses. The IRS allows freelancers to pay quarterly payments based on how much they earn. They must further plan for personal expenses such as laptops and mobile phones. Although this can sometimes be written off for taxes, gig workers must take caution with what they deduct.

Isolation – Although remote working and flexibility may be ideal for a gig worker, a solo career can feel isolating. Freelancers should ensure they are surrounded by people and maintain a social element to their working day as this is an essential part of their wellbeing.


Mauve Group is a leading provider of Independent Contractor solutions. If you are seeking support, find out more information on our solution here and get in touch with our team of experts.

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