How One Company Helps to Formalize the Gig Economy

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"What if we aren't talking about a jobless recovery? What if we're talking about the emergence of a part-time lifestyle?"

That's the concern of many Americans forced into part-time work by the downturn. It's also the question Julie Ruvolo at Solvate wants to answer. Solvate is a basically a work agency for freelancers. It's a little bit matchmaking (setting up independent workers with companies looking for part-time talent) a little bit agent/middleman (handling payments, guaranteeing quality and skimming a bit off the top of their workers' hourly wage) and very necessary.

Long before the Great Recession decimated payrolls and forced millions of employees into part-time positions, freelancing in America was on the rise. In a 2009 New York Times Magazine piece "The Self-Employment Depression," Emily Bazelon wrote that between 1995 and 2005, the number of self-employed independent contractors grew by 27 percent to almost nine million workers. This phenomenon is especially prevalent in New York City, self-employment accounted for two thirds of the job growth between 1975 and 2007, according to the Chicago Fed. The recession has only expedited the frenzy. In June 2009 a Daily Beast/Penn, Schoen and Berland Associates poll found that "fully one-third of Americans in our survey are now working either freelance or two jobs."

That's where Solvate comes in. There are two challenges to shopping a freelancer to a company, Ruvolo said. The first is how to connect companies to the right person, and vice versa. This is trickier problem than you might imagine. Let's say I want to get a payroll job with The Atlantic. I'll apply by saying I'm a journalist who can blog. But what if I'm a freelancer looking for work at The Atlantic, and Microsoft, and General Motors communications, and Pepsi advertising? That's a lot of skills to advertise, so Solvate indexes 10-20 skills of each independent worker to help them find the right jobs.

The second challenge is logistical: how do you formalize the freelancing process? An easy, attractive website helps companies search for talent by price and skills. Solvate sets up the interview, handles the billing and the contract, and provides an interface where workers can log their time so employers can "check in" on their part-timers even if they're thousands of miles away.

But Solvate doesn't just want to make freelancing easier. They also want to make freelancing better. Independent workers live outside the rules that govern payroll jobs. They don't qualify for unemployment insurance when their gig ends. They don't get work benefits or COBRA coverage. Wage theft laws don't apply equally, even though more than 40% of freelancers reported not being paid by at least one employer last year.

Before freelancers get protection from the public sector, they need help from the private sector. "We're on a mission to create trusted relationships between talent and companies," Ruvolo said.

(Nav Image Credit: SOCIALisBETTER/flickr)

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Derek Thompson is a senior editor at The Atlantic, where he writes about economics, labor markets, and the entertainment business.

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