Sorry AdAge: Permlancing is not the new agency model

By Dave Wieneke | in Advertising, Digital Agencies | 6 Nov 2012 | 6 Comments

This  article originally appeared in Econsultancy.

According to AdAge, if you have a job right now you don’t know what you’re missing. We’re in the golden age of freelancing!

Rupal Parekh – who has a full-time job – writes:

So far, advertising freelancers appear to be a happy lot. According to a survey with 3,000 national respondents conducted by 24 Seven and Ad Age, 62% of freelancers are optimistic that their job satisfaction will increase in the next year, vs. 46% of full-timers. (Twenty-five percent of the survey respondents were freelancers or consultants, and 70% of the freelancers were women.)

Freelancers are more likely to report a healthy work-life balance than full-time employees. They also feel they have more control over their career path than full-timers. In fact, once an agency staffer goes freelance, it’s hard to turn back; the survey found that the longer people are independent workers, the less likely they become to accept traditional employment with a single company.

Freelancer satisfaction or sleight of hand?
Let’s stop right there. Were you surprised that temps expect their job satisfaction to improve more in the future than employees? That sounds amazing, but take a step back and read the question for what it is.

It doesn’t ask if they are happy with their current circumstances, just they expect them to improve in the next year.

See the trick – this is a bit like asking people in the hospital if they expect their health to improve; not surprisingly they have a greater expectation of improvement than the healthy. The expectation of improvement is different than actually liking the current situation.

It’s a bit of a trick question, and it doesn’t support AdAge’s conclusion that freelancers are “A Happy Lot” or that they’re happier than their employed counterparts.

And yes, the longer they go as non-employed freelancers, the less likely they are to return to employment. The research doesn’t say this is by choice.

Ms. Parekh goes on to quote several other people who also have full-time jobs about how great life is as a freelancer. One of them, Andrew Benett, CEO of Havas’ Arnold Worldwide, sees freelancing as the road to riches.

He says he knows of situations where “a strong creative” can get $1,000 to $1,700 a day. It’s a wonder he doesn’t just chuck aside the grind of leading a major, incredibly successful agency to hang up his own shingle.

And it’s not just limited to the ad biz, folks:

The Freelancers Union’s 2011 Independent Worker Survey of 2,500 members throughout the 50 states shows that U.S. labor is generally evolving away from traditional schedules and into “more flexible, contingent work.” Almost half of respondents, 46%, earned their income from at least two work sources in the last year.

Permlancers Are shock absorbers
Ms. Parekh, U.S. labor is doing no such thing as “evolving away from traditional employment”. U.S. employers are. Why? Because it’s cheaper that way.

Agencies are keeping costs and head count down. They are using temps to fill in staff positions they cut two years go without having to pay for irritating things like health insurance and being able to get rid of staff sans cause.

Business is up, the economy is uncertain – and hires are still liabilities. When you’re a shock absorber, you’re on the bus, but not exactly a rider.

Like so many other journalists, Ms. Parekh seems to have missed a key part of how capitalism works. It requires a surplus of workers in order to handle swings in supply and demand.

This is why in the last 40 years the U.S. has achieved what the economists call “full employment” for two years at most. That was back in late 1990s and it required an enormous bubble to make it happen.

Freelancing is a risk to agency clients
Sure, everyone is Brand Them and, in some sense, a freelancer. But let’s cut to the chase – freelancers zipping between agencies are a huge opportunity to lose intellectual property protection, from creative processes to confidential campaign work.  This opens whole new worlds of conflicting interests.

If you run an agency then you know how hard it is avoid conflicts of interest even with full timers. Now what happens when that freelance assistant brand manager or strategist who was working for you last week ends up working for a firm competing with you?

There are only so many “(insert job here) with deep roots in (particular industry or function) out there. No matter how determined a freelancer is to honor that NDA (and most of them do) they still have an insight in to how you think. They are going to try their best for that new client just like they did for you. (Click here to read why Risk Management Firms worry about this.)

And don’t think that non-compete agreements are going to do the trick for you. In a rare win for the worker side of the equation, courts are increasingly ruling against them. Turns out that in this “more flexible contingent world of work,” those really broad non-compete agreements can look an awful lot like something that prevents someone from earning a living. Damn Liberal judges.

Freelancing flexibility comes with instability
After Ms. Parekh has talked to all those fully employed people about the wonderful world of no-regular-income, she does quote a couple of actual temps freelancers.

For some reason neither one has much to say about the subject of health insurance, never knowing where the next paycheck is coming from, being your own bookkeeper, going to bed each night knowing there will be no matching funds of any amount put into your retirement fund.

In my experience, many can do this because of a spouse’s access to insurance, or COBRA. When a spouses job shifts, often does as well. We all like flexibility, just not the insecurity.

Insurance is not the only difference between getting sick when you work for someone else and when you work for yourself. If you’re a freelancer and you get sick it’s not the client’s problem. You can’t call the office and ask someone to cover for you. 

Earlier this year, a friend of mine who’s been a successful freelance journalist (Count your blessings.) for a long time had a major family crisis. He had to shut down his business for a month. All he could do was hope that the work would still be there when his family got better. There is no family medical leave act for freelancers. And banks really do prefer long term employment over an amalgam of gigs when it comes to underwriting mortgages and the like. 

F-you, hire me
Let me be the first to say that there is plenty to like about being a freelancer. But unless you’re one of the lucky ones who are so busy they are turning away work, your livelihood is in the tidal zone between excess demand and excess supply. (The talent excess is still greater than excess demand).

How will we know when the economy improves? When freelancers take up Mike Montiero of Mule Design’s mantra of “F-You Pay Me”, and jack-up their rates to a point where hires start to make economic sense again. Permlancers of the world, give it a try, “F-You, Hire Me.”

Being told how great freelancing is by those with jobs is fantasy or wishful thinking.