Ryan Parker, 30, is typically hired by marketing agencies to deliver services for brands on a contract basis. Through the pandemic’s peak, industry demand was roaring. “Power went to the freelancers,” he explains. “Like other sectors, marketing saw the Great Resignation: people realized what they were worth and what they wanted. For freelance marketers, [other people’s resignations] meant being able to find the best opportunities and grasp them.”
However, this began to change at the turn of the year. In January, Parker abruptly lost two major contracts. It was an early sign of a looming downturn. “We began seeing budget cuts,” explains Parker, who has freelanced since 2017. “Brands started questioning their return on investment with third-party contractors; work that would’ve previously been commissioned to freelancers began to be taken in-house.”
Through circumstances beyond his control, Parker, based in Lincolnshire, UK, was suddenly out of work. “It was a very difficult time not knowing whether I’d be earning a monthly income, particularly when I had a family to feed,” he says. “I became more conscious of my spending, looked at what freelance jobs were available in the online community and began upskilling. I learned graphic design in my downtime so I could pivot to new opportunities I otherwise wouldn’t have gone for.”
Parker’s experience reflects what many freelancers, and those in other types of impermanent employment, have begun to see in recent months. “Many people have lost contracts,” he says. “When bidding for contracts, people are having to compete much more for the same work they had during the Covid-19 boom – it’s much harder now.”
But many suspect the worst is yet to come, as the financial outlook bleakens. When downturns hit, permanent employees can often hunker down in their jobs and ride out the turbulence. However, for the millions of workers in precarious employment — platform, gig and service workers, or knowledge workers on short-term contracts – clinging on to stable jobs through a recession can be much harder.
This job insecurity takes a toll; research shows that it can impact workers’ mental and physical health as well as their ability to plan financially. As the economic picture darkens, these workers are forced to strategize, increase their workloads and secure new means of income as they try to make ends meet.
The rise of job insecurity
While full-time work is generally protected under employment law, freelance or gig work is more vulnerable to sharp drops in demand. When recession bites, employers can terminate short-term contracts or casual workers far more easily than making full-time staff redundant.
As a single parent, I’ve always had to be creative about how I can make income in times of need – Ohn Mar Win
Some workers opt for insecure employment so they can sell their skills and diversify their salaries on a freelance basis, while making time for family. “I’ve had the opportunity to be full-time,” says Parker, “but it’s far more rewarding to build my own income and have freedom in my choices. The past few years have been precious: I’ve been able to help raise my young child, which otherwise wouldn’t have been possible in a nine-to-five office job.”
However, other workers find themselves in unprotected employment through enforced circumstances. This can particularly happen in the service sector, with zero-hour contracts and gig work common in industries such as hospitality, transport and the arts. In these cases, lower-paid employees have no guaranteed income and often aren’t allocated paid holiday or sick leave.
As the role of technology has grown, so too has the role of precarious employment in the economy. Statistics on exact numbers vary; according to one 2017 estimate by the US Bureau of Labor Statistics, temporary agency work, on-call work, contracted work or freelancing is the main source of income for more than 10% of US workers. In the UK, a June 2022 report showed 3.7 million workers were in insecure employment; defined as people on zero-hours contracts, agency, casual and seasonal workers and the low-paid self-employed (but not workers on fixed-term contracts). People are also increasingly turning to platform work to fill income gaps; according to a 2021 survey, 16% of US workers had earned money from an online gig platform at some point, skewing towards younger and lower-paid workers.
Freelance designer Ohn Mar Win, 46, relies on platform work to make ends meet. Although often commissioned by global branding clients on projects ranging from food packaging to book illustrations, she says more than half her income comes from teaching art classes online via digital-learning platform Skillshare. “As a single parent, I’ve always had to be creative about how I can make income in times of need.”
Win, based in Hertfordshire, UK, says she’s deeply concerned about how the recession may affect her work. “There’s a perfect storm brewing between the cost-of-living squeeze and increased financial uncertainty. Almost everyone will be tightening their belts, meaning there could perhaps be less consideration for online learning.”
The hidden toll
Without full-time jobs to rely upon, workers in insecure employment face a raft of pressures from which their more formally employed colleagues are better protected.
Parker says the economic downturn means many freelancers currently feel greater pressure to take on as much work as possible. Saying yes to more work creates a form of security, he explains; not only does it mean accumulating more wealth through a recession, but workers aren’t reliant on one stream of income.
However, this form of financial planning doesn’t come without consequences. “After losing contracts, freelance marketers have probably taken on too much work to overcompensate,” says Parker. “Those who’ve lost a huge job have now taken on three or four contracts, even if they have capacity for only one or two. We’re probably overworking – and there could be some burnout coming – but at least we have a fail-safe should anything go wrong.”
Overwork is just one way that workers in insecure employment might try to deal with stressful uncertainty. In general, says Chia-Huei Wu, professor of organisational behavior at Leeds University Business School, UK, a lack of financial stability can create a huge psychological toll for the self-employed. His 2020 research of 1,046 employees in Australia showed those who experienced chronic job insecurity, which he defines as four years or more of higher job insecurity, were more likely to undergo personality changes that affected their mental health. “The experience of chronic job insecurity can affect individual wellbeing by undermining a person’s social and professional life,” he says. “Over time, these workers became more depressed and neurotic, and less agreeable and conscientious.”
Financial stress can be exacerbated during economic downturns, adds Wu, with workers in precarious employment also likely to be without a workplace support network. “The transactional nature of insecure employment leaves responsibility to workers to take care of their long-term goals or career plans. It can be uncertain when a freelancer might receive a request or secure a contract, creating a psychological mode of always waiting for jobs. And without sick pay or annual leave, it can be hard for these workers to fully distance themselves from work, impacting their health and wellbeing.” Indeed, research has shown a link between insecure employment and poor health.
After losing contracts, freelance marketers have probably taken on too much work to overcompensate – Ryan Parker
In a downturn, some workers in insecure employment will suffer more than others. For example, those in knowledge work might be more able to switch to full-time employment or have the marketable skills that deliver a healthy wage. Conversely, gig workers and those on zero-hour contracts who are in precarious employment through necessity rather than choice are more likely to already be struggling financially and have fewer options when a downturn hits.
Win has been in unprotected employment since the 1990s. If the downturn bites, she says she’s likely to diversify her salary through virtual workshops and a passive income accumulated through illustrating. “My first passive wage, selling doodles on a stock image site, came as a direct result of needing to find income. It took two years to build up, but it paid off. [Since then] I’ve done everything from buying and selling on eBay, cooking from scratch and walking everywhere [to save money].”
Over time, she says, she’s accumulated psychological endurance in the face of economic booms and busts. “I remember when my kids were small how little we lived on and the toll it took on my mental health – we were in constant debt. Having lived through many years of a precarious existence, I’ve built up a certain resilience: I have the capacity to think strategically rather than panic.”
But that won’t be the case for everyone, especially younger workers or those with fewer skills to sell. Many people in insecure work will be very worried about what the coming months will bring – and the harm it might do to their financial stability and wellbeing.
