Financial education

By: Sofía García-Bullé

Universities should prepare students for independent work and the gig economy.

The labor market has been transformed in the last decade to such an extent that today, self-employment and independent workforce dominate its structure. Recruitment and staff management practices are pointing to a severe reduction in permanent job positions. The backbone of the workforce today is made up of freelancers, also known as independent or autonomous workers.

In Mexico, 14 million people are classified as self-employed or freelancers; in India, they totaled 15 million in 2016 and the number is currently estimated to 20 million; in the United States, self-employed workers number up to 57 million. As for the share of their respective national economies, the informal Mexican workforce produced 22.7% of Gross Domestic Product (GDP) during 2018; US freelancers contributed 1.3 trillion dollars; amounting to 6.7% of GDP (2018), and in India, the informal labor market is estimated to grow from 20 to 30 trillion rupees by 2025.

Despite the steady growth of global independent workforces, there is still no formal effort in universities to prepare students for the freelance life and the gig economy. True, there are many educational courses and programs focused on instructing and inspiring young people to start their own businesses as entrepreneurs. The problem is that often, educational institutions do not discern that undertaking their own business is not the same as working independently.

The difference between an entrepreneur and a freelancer

An entrepreneur is a person who starts a company and takes financial risks intending to make economic profits; a freelancer is an independent professional who offers his/her services by projects to a specific company or organization.

In theory, the definitions look very different; in practice, not so much. Both figures, the entrepreneur and the freelancer, have to make their own schedules, respond to their clients, manage their finances, and in some cases, manage staff. The biggest difference would be that the entrepreneur owns and is responsible for the business, while the freelancer is an outsourced person who operates independently. This is why the preparation given to each one should also be different. What skills should a freelancer possess to have a successful career in the non-traditional workforce?

The skills of a good freelancer

The road to any successful career trajectory begins by learning and knowing yourself. The starting point for a stable platform of independent work is to know which skillsets are useful in the chosen workforce, to investigate how much they are worth in economic terms, which companies are soliciting people with those skills, and whether the skills will continue to have value in the future.

Mastering the formation of business relationships or “networking” is crucial to maintaining stable sources of work in the independent sphere; to achieve this, constancy and cultivation of emotional intelligence are indispensable tools. Time management and task organization are also vital to ensure a manageable workflow that allows tending to multiple projects at one time and maximizing the profits of the freelancer.

Independent work has the advantage of allowing the freelancer to manage their time as they see fit, but the disadvantage is not having the stability of a plant job. Many freelancers live on unequal income receipts that they must distribute throughout the year. For this reason, financial education should be an essential subject for all people who want to pursue independence and work as a freelancer.

Knowing how to sell and value their own work would help self-employed workers to make a profit commensurate with the time they invest and the quality of their work. To stay up to date, independent workers need to commit to lifelong continuing education to provide themselves with new skills and increase the economic value of their work.

These are all notions that most freelancers learn on the fly, but these considerations are not included in programs of higher education. Most of the efforts of educational institutions focus on the formal labor market, with things such as job fairs, entrepreneurial startups, business incubators, grants, and networking events.

What are the areas of opportunity for universities?

It would be wrong to say that universities have made no effort to prepare students for the independent job market; however, these initiatives need a wider lens. Most of the educational bodies that offer training outside the formal labor market focus on business professionals and entrepreneurs.

Today, one of the most populated markets in the freelancer sphere is computer science, which encompasses cybersecurity, equipment repair, technical support, and so on. Due to the constant need for information systems and equipment in companies, these careers have a very close relationship with business and entrepreneurship. However, writing, editing, and proofreading (or correction of proofs) are more perceived as niche services, despite the growing need for content that establishes a brand presence. Universities have therefore failed to see the need to educate professionals in this area for the management of self-employment and freelance work.

There are many agreements between companies and universities to help students integrate into independent work. Still, there are very few associations that higher education institutions have intending to connect students to project work, give them an idea of how to value their work and point them to which companies have best practices and more job opportunities.

Until independent work is regarded as a widespread trend, students will not be well prepared for the management of self-employment and will have fewer tools to assure themselves opportunities for the non-traditional workforce.

Source: https://observatory.tec.mx/edu-news/universities-do-not-prepare-students-for-freelance-professional-life