The growth of freelance and gig economy is changing the way labor is used. According to Upwork, more workers choose to work as contractors and freelancers rather than full-time employees. It is estimated that 36% of the labor force in the United States are freelancers, and within 10 years, more than half of the labor force will become freelancers.
Freelancing is especially attractive to the younger generation. The prospect of becoming their own boss, choosing customers, and flexible working hours are extremely attractive to members of the free-spirited millennials and younger generations.
However, like anything, this approach has its own advantages and disadvantages. Traditional employment usually provides better security when income and salaried employees are guaranteed wages. On the other hand, freelancers may have to survive the downturn when projects are under-supply, while also missing benefits such as pensions and healthcare. There are also more and more people worrying about the exploitation of freelancers, because many regulations and labor laws protect employees not applicable to freelancers.
Fortunately, blockchain is now looking for applications in human resources and labor management. Some projects are creating new mechanisms to change the way freelancers work. Here is how blockchain can create better prospects for freelancers
Accessible pension
Freelancers usually have to deal with retirement plans themselves. However, due to increased paper and legal work, many freelancers choose to give up participating in projects such as pension funds. The blockchain-based Akropolis project tries to make everyone can get a sustainable pension.
Through this platform, users will be able to directly view, compare and manage their retirement investment portfolios with complete transparency. They can explore and utilize various pension products from a fragmented market. Using the transparency of the blockchain, they can also audit their accounts at any time, unlike traditional pension funds that have limited real-time information about fund performance.
The platform’s safeguards also encourage funds and fund management companies to act in the best interests of users. Use a reputation and ranking system to track their performance so that users can identify the best funds to join. This gives users the flexibility to choose where to invest and diversify their funds. This trust mechanism also provides a carefree investment experience for freelancers.
Faster payment
Many freelancers still struggle to get paid, especially for cross-border jobs. Traditional remittances and online payments can be slow and expensive.
For example, freelancers who accept payments through PayPal may have to convert funds to local currency before they can transfer the funds to their bank account. PayPal already charges users a fee, but the rates they use when exchanging currencies are often unfavorable. In addition, local banks may also charge fees for inward remittances. These rates and expenses can accumulate and take a large chunk of the income of freelancers.
Cryptocurrency payments have found a niche market in the remittance field because the tokens can be credited directly to the recipient's address. Even with the confirmation time of the Bitcoin network, cryptocurrency-based remittances can still be completed within minutes or hours. In contrast, wire transfers and online payments to bank accounts may take several days to complete.
With the increasing use of local exchanges in various countries, it is now easier to exchange top currencies such as Bitcoin and Ethereum into local legal tender. Companies like Bitspark that remit money through cryptocurrency have achieved success in markets such as Asia due to the popularity of overseas fund transfers.
Better protection
The exploitation of freelancers is real. Freelancers complained that they were deceived by their clients and refused to pay their due. Even after signing a contract, freelancers are often reluctant to file a lawsuit because legal proceedings often cost more than they deserve, so they will eventually bear the loss. Legislation to protect freelancers has also progressed slowly.
Blockchain platforms can change this situation by encouraging employers and freelancers to act in an honest manner. Platforms like Ethlance are using blockchain to ensure that only legitimate parties can transact with each other. Job opportunities, past transactions, budgets, and even wallet balances can all be checked so that freelancers can verify the history and performance of the employer. In this way, they can only work with employers with a good reputation.
Smart contracts can also be used to provide protection for all parties. Smart contracts can be used to summarize the terms of a work agreement, place payments in a third-party custody, and automatically release funds under conditions that both parties are satisfied with. JUR provides such a function to facilitate business transactions. In this way, all parties can rest assured that both parties will fulfill the terms of the agreement.
Freelance empowerment
These blockchain projects can help workers better control their freelance activities. By allowing them to receive pensions and solving many problems through legal contracts, freelancers can now have the same promise that traditional employees enjoy a secure financial future.
With cryptocurrency payments, they can also receive payments faster than before without having to pay high fees. Employment platforms and smart contracts also provide freelancers with a vital protection against abuse of employers. As these pressing concerns are eased, freelancers will be able to practice their professions in more stable and profitable fields.
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