Freelancing – Leading to a More Adaptive Workforce in the Western Balkans
TEXT: Niklaus Waldvogel – 27. June 2019
A five-day, 40-hour, 9-to-5 work week sounds normal to most of us, but for Fjolla*, who is an accountant, the norm is different. Like most freelancers, her work week is a continuous cycle of alterations based on her clients’ needs. “Last week, I worked for a start-up in Germany’ and today, my day starts at 13:00 to fit the time zone of my client in Canada,” she told us over a conversation in Pristina, outside of her quasi-office at a coworking space.
This modern way of working is challenging the idea of Fjolla’s parents of what a real job looks like. It took time to convince them of this being a sensible way of generating income; yet, they remain skeptical. Older generations expect their children to go to university, choose a run-of-the-mill degree like law or economics, and follow a traditional and linear career path. This is especially true of countries in the Western Balkans. But, in truth, the economy doesn’t need all those lawyers and economists. So, many end up unemployed or in jobs unrelated to their field of study. Modern careers are not linear. Fjolla’s way of smartly adapting to the demands of the labor market represents the future of work.
According to recent reports (ILO, World Bank, WEF), labor markets are constantly evolving. For example, traditional employment is becoming less secure: only half of the world’s workers hold salaried jobs. New employment models are on the rise. These include part-time, temporary, own work; informal and unpaid family work, especially among young women.
A modern-day freelancer is typically considered self-employed and works for one or several companies on a contract or project basis. This ‘gig economy’ has significantly disrupted the way people earn. This trend is expected to become more emphasized in the future.
Over half the U.S. workforce is projected to be working for the gig economy in less than 10 years. Countries like India and the Philippines have boosted their economies by becoming global freelancing hotspots. A McKinsey study found that in 2018, around 162 million people in Europe and the United States (20-30% of the working aged population) were already engaged in some form of independent work. Various countries in Europe have undergone a rapid economic transformation in recent years based on a dynamic and gig-focused labor force. Poland has become the European growth champion, not least because of its role as a leading location for modern business services, which are offered by outsourcing companies and freelancers.
WEF Future of Jobs 2018
In an interview with Dr. Vesselina Stefanova Ratcheva from the World Economic Forum (WEF), our colleague, Timothy Sparkman, emphasizes that key elements for economic success are continuous investments in skills, or “re-skilling”, and an increasingly flexible labor force. This requires the employee of the future to be adaptive and smart.
Fjolla believes that to enter this field, employers require clear communication skills - verbal and written, foundational sector-specific knowledge, and the ability to manage time and workload effectively. A high level of emotional intelligence and soft skills, rather than solely sector-specific knowledge, will be the most sought-after traits in the future. Regarding the biggest challenges, she mentions loyalty, productivity, isolation and distraction, especially at the beginning of a freelancing career. Her decision to join a coworking space in Pristina instead of working from home helped her overcome these challenges.
For the young Kosovar creative Gent*, freelancing means flexibility and freedom that he would otherwise not have. This way, he doesn’t need to be stuck with one line of work or employer for a long time. Building a network of clients is his key challenge. Even with his experience, he needs to constantly look out for new clients and opportunities to extend his network. While a good portfolio and CV help, he thinks personal recommendations are more valuable.
When writing about trends in the labor market and the future of work, it is crucial to discuss the quality of jobs, as Zenebe Uraguchi did in his blog on job decency.
Helvetas works towards creating more jobs and commits to taking care of aspects such as social protection, fair payment, etc., in accordance with the International Labor Organization’s Decent Work agenda. The gig economy is globally reputed of being exploitative and avoiding social responsibility through short-term contracting and abuse of freelancers. Therefore, this labor market needs adaptive social security models.
Confirming this, Gent says that despite an attractive pay, he doesn’t feel protected against exploitation while working for foreign employers. Sometimes he works without a contract; but even if he has one, he doesn’t understand it enough and is often unaware of his rights. He fears losing clients if he confronts them with these issues.
Another case is that of a freelancer in Kosovo who is unable to legally register herself as a self-employed individual. Her only corridor to employee protection is to create a company under her name. However, many are reluctant to do this as it requires paying entrepreneurial tax fees. In such cases, clear legislative framework and support from a well-informed community become crucial.
According to the World Economic Forum Future of Jobs 2018 report, skilled local talent availability is the biggest concern for employers, followed by labor costs. The Western Balkans are well positioned to use the gig economy trend in their favor as, on the one hand, this region has some of the highest unemployment rates worldwide, as the economies are unable to provide enough jobs to the youth; and on the other, they have a young and smart workforce with good foreign language skills and an affinity towards new technologies that can be key cornerstones for a modern economic upswing.
However, according to a recent survey by Enhancing Youth Employment (EYE) – a project of the Swiss Development Cooperation implemented by Helvetas, and its local partner Pyper in Kosovo, around two-thirds of the labor force between 18 and 35 have never heard of freelancing as a career option. Even the informed youth hesitate in considering the option due to the lack of supportive structures and community services like coworking spaces. Throughout the Western Balkans, only 10% of the workforce is engaged in full- or part-time freelance activities.
Currently, the region’s youth often lacks the necessary knowledge and skills to present themselves as remote employees. Yll Rugova – a local entrepreneur in Pristina has set an example for the locals by way of his new initiative of establishing a coworking space, Haptaz. Haptaz is supported by EYE and aims to help the freelance community improve their selling point to clients abroad. Yll Rugova says that many young people have issues with punctuality, delivering on time or business writing. Work experience as a freelancer can help these people to acquire or strengthen such soft skills and the exposure to various international clients can teach them to assert themselves between different working cultures and improve foreign language skills.
Rugova believes that while automation threatens to replace manpower, tasks that need innovative thinking will continue to remain the domain of humans. Here’s where the skilled youth in the Western Balkans will see opportunity.
A coordinated effort of all involved stakeholders is needed for this potential to be realized. Modern ways of working need to be promoted. The respective communities, supported with career guidance, mentoring and networking opportunities, and effective legislation, should formalize their work.
According to a recent impact report of the worldwide operating coworking space network Impact Hub, there are several key benefits for members of an active coworking community. Being connected to other freelancers or young entrepreneurs provides opportunities to collaborate, develop new skills and capabilities, gain visibility and credibility and learn about new trends. The mentoring they receive within the community, formally through official coaching by coworking staff, and informally through exchange with other members, is crucial for professional development.
These are areas where development organizations can and should invest in. It is in their immediate interest to help the workforce in partner countries to become more versatile and adaptive. Projects focusing on economic transformation and youth employment are well suited to support the growth of the freelancer and coworking community through smart and systemic interventions. For instance, coworking spaces provide the necessary place for freelancers to interact and voice their concerns about the challenges regarding the formalization of the gig economy. Without this, the difficulties faced by the self-employed remain sporadic and yield no optimism for an improved freelance landscape. Development projects can use the opportunity to create joint efforts within local coworking spaces to push forward policy development and advocate for improvements to the labor law.
Helvetas is carrying out many such activities across the Western Balkans. In Bosnia and Herzegovina, it enables services from targeted trainings and coaching of young rural women to become freelance agents to the aforementioned business plan and from community development for new coworking spaces to establishing networking platforms. There are many possible intervention lines that can benefit this sector. Through increased regional communication, learning from one another, and using collaborative spaces to connect, Helvetas and other organizations can impact the exciting future of jobs in the Western Balkans.
*Names have been changed to protect the individuals' privacy
Helvetas Mosaic is a quarterly published by Helvetas Eastern European team for our email subscribers and website visitors. Our articles explore new trends and fresh ideas of international development work in Southeast Europe.