COVID has changed the landscape for many industries—the freelance writing industry is no exception. While some businesses have seen a shift from brick and mortar to supporting ecommerce sales, others have struggled with adapting to meet those demands. What does this say about the freelance world? Has COVID shifted payment structures for freelancers?
Statistics reveal that, during 2020, 59 million Americans worked as freelancers—and this has continued to increase since 2014 steadily. Many turning to the freelance industry do so out of necessity, instead of by choice. Because gigs and income are unpredictable when you work as a freelancer, that means those new to this industry must learn how to adapt and make freelancing work as a business.
Did COVID Really Change How Freelance Writers Work?
Seasoned freelance writers are already used to working from home. However, when you don’t have a choice, shifts must occur. For example, when the pandemic caused shutdowns across the nation, thoughts may have been that this wouldn’t affect freelance writers. That isn’t necessarily the case.
- What about writers who find it easier—inspirationally or otherwise—to write in cafes, libraries, or other public venues?
- What about the writer who has to visit a source on-site for an interview or gather other information?
- What about contract writers who spent part of their day working in a company’s office?
- What about the travel writer who spent their time covering festivals, hidden gems, and other events?
Those are just some of the many shifts freelance writers saw when the pandemic hit. However, payment structures are also part of this scenario.
- If a freelancer is already used to using PayPal, they might have to shift to another—Stripe, being a stand-out option.
- Some new to the freelance industry and previously worked as staff writers experienced payment and reporting shifts—which means filing as an independent contractor and preparing to pay fees for digital payments.
Challenges Freelance Writers Face Regarding Payment Structures
Writers who aren’t new to the industry can think about how things were already challenging before this crisis—inconsistent communications, ignored emails, and late payments ranking high on that list. Add to that the ebbs and flow the entire country is seeing regarding wages.
Mercer research indicates that, as of last spring, “one-fourth of companies reduced pay (most of them temporarily) when the novel coronavirus shut down large swaths of the economy.” That research also tells us that, in 2021, companies expect to increase compensation by between 2.6 and three percent.
What does this mean for freelance writers?
“Like millions of Americans, my income took a dive almost as soon as cities began to close. The week I had planned to cover South by Southwest, I received emails from various outlets letting me know they would no longer take pitches from freelancers,” writes Monica Castillo.
The Changing Payment Landscape
Because enterprises are learning that the future of work includes freelancers and gig workers, it’s becoming easier to switch from full-time to freelance. While some switch because they have no choice (their position was eliminated, the business closed, and so on), in addition to freelancers changing how they run their business, others are working in this field for the first time.
In the Stripe Sessions talk, Commerce after COVID: new priorities for payments, Lily Varon, Forrester’s Ecommerce and Payments Analyst, discussed frameworks businesses need for assessing modern payment capabilities, tradeoffs, and how these decisions impact a business’s core objectives.
What does this Stripe session have to do with freelancers? Looking at how businesses must shift their payment processes gives freelancers a new lens to look through when dealing with the “new normal” regarding payments after COVID.
Varon explains that “commerce after COVID demands adaptability.” Forrester’s research shows us that, between 2019 and 2020, consumers using digital payment methods grew from 61% to 64%. That research further indicates that, during that same timeframe, cash payments decreased from 67% to 54%.
How to Navigate a Shifting [Freelance] Landscape
The pandemic seems to affect freelancers and pay rates in different ways. For example, according to Payoneer, 40% of freelancers describe their business demand as stable with continued growth—while 32% say there’s been a significant drop in Demand following COVID. Payoneer’s research also concludes that, on average, freelancers earned more during 2020 per hour than in 2018.
For example, Jeff Tennery, CEO of Moonlighting, told Forbes, “Demand for freelancing is high, but since revenues for most companies have taken a hit, hirers still have the leverage and are negotiating better rates. In general, freelancers on our platform are doing more work but at lower rates.”
However, Rob Biederman, Co-CEO of Catalant, told Forbes that they “don’t expect to see much change to how those services are priced. We have been working with customers on payment structures to help them navigate any new financial restrictions. In this time, as in all, we are deeply focused on getting the maximum net possible take-home to our experts.”
Despite these differing situations, there’s a light at the end of the tunnel.
Let’s look at what freelancers need to do to navigate this shifting landscape, which includes adjusting to new payment structures.
- Establish routines: Even though freelancing offers flexibility that full-time employment does not, that doesn’t mean those working in this industry shouldn’t have structure. Establishing routines helps you look after your business and yourself.
- Manage stress: Remember that, as a freelancer, you’re responsible for all aspects of your business—and that can be stressful. Manage stress through continuous education by taking online classes, joining writing groups, and talking to your peers.
- Prepare for uncertainties: Nothing in the freelance world is guaranteed, and that sense of uncertainty is frustrating. Prepare for these unknowns by learning how to manage slow-paying clients and building an emergency fund.
- Protect your boundaries: If you’re new to freelancing, that means you’re unfamiliar with “scope creep” or refraining from putting in long working hours.
Freelancers aren’t the only ones who need to learn how to navigate this shifting landscape.
Businesses must also learn how to adapt and set firm expectations for those overseeing the company’s freelance team. Those adjustments also include:
- Human resources: Avoid lumping your freelance team into the company’s HR system. Instead, use a platform like nDash to manage projects and streamline payments.
- Operational support: Freelancers need style guidelines, including the company’s background, mission, objectives, target audience, and more.
- Retraining: Internal teams, leaders, and management must have retraining for working with freelance and gig workers.
- Understand the difference: Blurring the lines between full-time employees and freelancers is a costly mistake. For example, instead of giving performance reviews, freelancers should receive constructive feedback.
Short-Term Disruptions in Payment Structures Lead to Long-Term Strategies
While the pandemic caused enormous disruption in the workforce, opportunities for new (and positive) long-term strategies are available. These long-term strategies mean more companies demanding freelance and gig workers and an increase in remote work opportunities. With that comes changes in payment structures, including accepting digital payments instead of receiving paychecks from a full-time job.
Learn how nDash can help your company manage projects, streamline payments, and automate workflows.