3 Ways Social Networking Is Impacting The Freelance Economy

Social networking is transforming many aspects of society and the labor force is no exception.  Most people know about prospective or current employers checking their social feeds for “negative” behavior, but there is a more important impact of social networks occurring in the fastest growing segment of the labor force: the freelance economy.  As businesses continue to look to freelancers to build an on-demand workforce, social networking will play an important role in three key ways– building incentive alignment for a more productive work arrangement, encouraging the increase in human capital for freelancers, and further driving the growth of the freelance economy. These trends will only gather speed over the coming years as freelancers continue to redefine how work gets done.   More Productive Work One of the many benefits of the social graph involves the inherent trust from having connections in common.  When this trust is transported over to the labor market, it builds an incentive alignment that buyers and sellers of labor are mutually interested in reaching the best possible result–a job well done.  In the freelance economy, where work can be short term and assignments given by anonymous online profiles, the added opportunity to build trust through mutual connections can be particularly important in making sure that a freelance assignment receives the same care and attention as more permanent opportunities.   Increase in Human Capital Because of the growth in online staffing, more and more freelancers are finding their work online.  That means it’s particularly important for freelancers to invest in their human capital. In order to stand out from the competition, freelancers will be more incentivized to invest in their own professional development, whether that be in the form of ongoing education, licenses, or certifications. This is not unlike people who are searching for full time jobs and want to differentiate their skill sets. In the full time labor force that occurs every few years at most. However, in the freelance economy the maintenance of your human capital is an almost daily occurrence, including soliciting and receiving ratings and reviews for your work.  This level of transparency is a cornerstone of the freelance economy and will drive behavior in a very powerful way, shaping the relationships between buyers and sellers of labor.