Dear big company. The gig economy doesn’t work the way you think it does.

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I live in the gig economy. I work with large companies. Their systems are designed to make working with me “efficient.” In fact, they just ensure that they’re getting the highest possible price.

If you’re a freelancer, you know how this works. Joe Exec, who knows you somehow (from seeing your blog, a reference from someone else, you used to work together, whatever) wants to hire you. He wants you to do training, ghostwriting, editing, graphic design, research, coding, market analysis — could be almost anything. But after a call, he knows he wants you, because your unique skills exactly match what he is looking for.

Joe’s company has a finance department and a procurement system. So you need to fill out a web form and submit paperwork. To Joe, you are a unique talent. But procurement doesn’t work that way. To procurement, you are exactly the same as every other supplier. Maybe you develop apps and the next freelancer does cybersecurity and the next one does copy editing, but it’s all the same to them.

This creates absurdity. The corporate trainer who’s asked to sign a contract turning over all the intellectual property they create. The graphic designer who is supposed to prove she has $5 million in liability insurance. The comedy workshop creator who has to sign a non-disclosure agreement.

The gig economy is not stupid. And we’re not interchangeable. Here’s how we react.

We raise our prices.

We charge individuals and small, unbureaucratic organizations less, since it’s less hassle to work with them (and they pay quicker, too).

We pad our hours and our rates to account for the extra time spent fighting with procurement, filling out forms, and pestering accounting to pay us.

We persuade our clients to put us on a credit card and expense it.

The thing is, Joe Exec is on our side. He wants us, not somebody else. We want to serve him as well as we can. It’s a beautiful friendship.

You’re wasting Joe’s time, too.

So let’s sum up. You end up paying more. Your executives end up wasting time fighting with your own systems and negotiating internally. Everybody ends up getting what they wanted, except for the tax your company is paying for being a pain in the ass to deal with.

Is this really more cost-efficient? Is it really getting you the best freelancers to work with? Or is it just creating friction? What’s the cost of that?

I look forward to working with you.

This is a sequel to one of my most popular posts ever: Dear Big Company. Thank you for agreeing to pay me.

One response to “Dear big company. The gig economy doesn’t work the way you think it does.

  1. Purchasing and human resources departments are set up to treat all expenses as necessary but undesirable. They are given little or no room to exercise judgment, and purchasing staffers are often evaluated on their ability to avoid spending. They take an adversarial approach to suppliers, which damages trust and hinders good relationships, and they second-guess the requests they get from within their companies, which may reduce initial cost but will reduce efficiency as well. Companies with smart and insightful people in these departments would have tremendous advantages; I’ve worked for one and am still hoping to find another before I retire.

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