Why recessions are great for freelancers
The economy is showing signs of… well… not good things.
Layoffs abound in tech and other industries. Inflation is maybe getting better? But also not?
It can be a scary time, especially as you see friends, connections, or even loved ones being laid off.
But if you’re a freelancer, you can breathe a sigh of relief: recessions are good for freelancers. Great, even. It sucks to say–that a time of strife for others is great for you. But it’s true, and it’s time to take advantage of it.
Why are recessions so good for freelancers?
Layoffs are not about reducing employment. Layoffs are about reducing expenses and reigning in cash controls. The effect for a laid-off employee is the same regardless. But this distinction is critical for freelancers.
When a company makes a layoff, it’s to preserve cash and cash control. That means, so the best-practice playbook goes, that companies will make the biggest possible layoff they can afford in order to avoid secondary and tertiary layoffs down the line (for those companies doing multiple rounds of layoffs, you see how much the negative reaction grows with each subsequent round).
What do companies want when they need cash controls?
Flexibility
Reduced fixed expenses
Coincidentally, the two things freelancing is near-purpose-built for.
But then it gets even better. Because recessions–truly, all chaotic times–are great times for some organizations to try new things. Incumbents are weak and innovation is cheap.
So you have a company fresh from laying people off and not approving any new fixed budget line items. Except… there’s opportunity coming knocking and they have fewer people to do the work.
What’s the solution? Hire freelancers.
How freelancers are perfectly set up to grow during recessionary times
I hinted at this in the previous section, but let me spell out precisely why the structure of freelancing is perfectly suited to recessional realities.
1. Work flexibility: You can work on a single project, a single deliverable… or a large ongoing project in a niche focus.
It’s not about the amount of work, per se, but the fact that the amount can change. With employees, capacity must be filled lest it’s wasted. With freelancers, you order precisely what you need every time.
2. Financial transparency: Companies lay off employees to save on salary, benefits, and lots of other intangible costs. As freelancers, you give them one number: your rates. The client pays that and they are done.
3. Backtracking: Because companies tend to do the biggest possible layoff in round one to avoid having a round two, sometimes they overcorrect. But they can’t immediately hire too many people back–it makes the layoff look less like economic reality and more like prejudice-based culling (hello, legal trouble). And even if they could hire back employees (or hire new ones), the timelines are just too long.
So what do they do? Hire freelancers.
What to have in place to take advantage of these times
The winds are in your favour. But you still have a bit of work to do. Make sure you’ve got the basic infrastructure in place to be successful:
A website that explains who you are, what you do (who you do it for), and a way to get in touch with you. I like contact forms rather than email addresses–helps you avoid spam bots and is easier to fill out in the moment vs. copy your email, open an email client, think of a subject, and type it all out.
A consistent one-liner that describes what you do (and who you do it for). The key here is consistent – make sure this is across your website, social media, and coming out your mouth every time someone asks what you do.
Work samples to show what you can do. It can be self-published if you’re just starting (this is about showing a skill, not yet proving you can close clients). If you’re totally brand new, you can get a portfolio going by volunteering with a charity or nonprofit whose message you support.
An idea of what your skills help with – so not just the thing you do (e.g. writing), but what that thing can do for your clients (e.g. support a marketing campaign or customer success how-to guide).
And, finally, curiosity about other people’s problems (almost to the point of being nosy). You can’t successfully pitch your services (and charge fair rates) unless you understand what someone’s real problems are. You can understand their problems if you aren’t curious enough to care.
