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What Motivates Freelancers? The Freelancing Value Proposition

7 December, 2018
What motivates freelancers to freelance? This is a question I can relate to personally, since I joined the gig economy in 2013. As a lifelong student of management, I have challenged myself to understand my own motivation, both out of curiosity and to find a way to respond when my wife tells me to get a job.
Clearly this is about the “total” package for a gig worker/freelancer. Yes, the money can be good (or bad), but the full deal for freelancers includes, well… freedom. This can be compelling, and now we’re talking about motivation, so let’s revisit the major motivational theories applied to work.

Herzberg and Maslow Refresher

Frederick Herzberg developed the two factor theory (Motivator-Hygiene Theory) of motivation which holds that pay and benefits do not motivate, but rather we are motivated by achievement, recognition and challenging work, I.e. the work itself. Pay and benefits, according to Herzberg, are hygiene factors, or “de-motivators” which do not motivate when increased, but rather demotivate workers when they are reduced or not sufficient in some way.
I have taught this theory, along with Abraham Maslow’s hierarchy of needs, Adams equity theory and Victor Vroom’s expectancy theory to well more than 1,000 Human Resources practitioners as well as about 700 line managers (the ones who actually manage people.) It could be everyone is being nice, but no one disagrees with these widely-accepted theories. I certainly find that after 33 years of doing work in the total rewards field, they prove true time and time again, when observing how people respond to changes in their various rewards and the work they do to earn their rewards.
Maslow’s Hierarchy of Needs (originally a developmental theory) states that a person is motivated by their lowest unmet need. Physiological needs are the first and most basic needs, which must be satisfied before safety and security (level 2) will motivate a person. Consider, an animal will venture out of its hole to find food, demonstrating in nature that physiological needs (food) motivate the decision to let go of safety. Once an animal finds food, it will certainly return to its hole to consume the food, because the physiological need has been met, so safety and security now motivate the animal. We do this when seeking income. A worker will work for cash—no employment contract or benefits—if necessary to feed himself and his family. But once employed for cash, he continues to search for employment where there is a contract providing job security, benefits and labor law protections.
Maslow’s and Herzberg’s theories are fully consistent. Pay allows us to survive: food, clothing and shelter (and se… cure wi-fi) all cost money. Benefits are a form of safety and security, since without them, we must save a large portion of our pay just in case we get ill or injured or retire or need time off of work. Benefits are a form of income protection. According to Maslow’s theory, pay and benefits must be sufficient before higher order needs will motivate.
Herzberg’s two-factor theory would support this, since according to his theory, motivators such as recognition (addressing Maslow’s need for esteem) or achievement/challenge (related to self-actualization) will not motivate in the presence of demotivators such as insufficient pay or benefits. According to Herzberg, fix the hygiene factors first, then motivate using intangible rewards such as job enrichment.

Enter the Gig Economy

So far so good. Except for one thing that has bothered me the last few years. The “gig economy” is now a legit thing. Massive numbers of people are working on fixed-term contracts without social security contributions, benefits, corporate bonuses, corporate recognition, company outings and company-provided training. If Maslow and Herzberg are correct, it would be logical to conclude contingent workers are mainly motivated by money (meeting physiological needs) as they are missing out on so many corporate rewards aimed at higher needs. Why are people like me* willing to forego all these rewards? For many it is because, like the animal, we must eat. But for the rest of us, I have a theory..
Freedom Opens a Door to Meeting Higher Order Needs
I believe that the freedom and flexibility enjoyed by freelancers is the reason why we are willing to forego all the higher order rewards offered by the best places to work. While there is no substitute for working for an employer of choice, there is the option to not be employed by choice. Therefore a freelancer will succeed only if he or she is willing to forego the safety and security of a fixed paycheck and benefits, for the sake of much greater chances of being satisfied by doing what they want to do, achieving better work-life balance, as well as esteem, growth, and even career opportunity. In short, we are willing to venture out of the cave (safety and security) in return for nearly total work-life flexibility which enable us to satisfy our higher order needs for:
  • Affiliation (time with family, friends);
  • Esteem—working at home and being near the people you love most; not being thrown under the bus and working with insecure people ready to stab you in the back; the possibility that you gain some respect if you can establish a reputation as an expert in your field; proving you can do it
  • Self-actualization – achieving work-life balance may in fact be your highest ambition; being your own boss, running a business, being a CEO
While there is no substitute for working for an employer of choice, there is the option to not be employed by choice
When Herzberg published his theories in his book, The Motivation to Work, in 1959, there was no gig economy apart from a few trade or service occupations. Fast forward to the current time where the gig economy includes full-time intentional and branded freelancers and we must re-examine why it is people are willing to forego benefits—a critical hygiene factor—in return for higher order needs. In my simple view, it is because work-life balance is the door opener to all the higher order rewards. In our “job” mindset, these mean corporate intangible rewards such as company-policies for flexible work arrangements, company recognition practices with nomination committees, company training and so-on. But when you take away the “corporate” assumption, the freelancer gets all these, and gets them without limits or corporate policies:
  • Freelancers don’t need permission to work at home, work flexible hours or take an extended leave
  • Freelancers can serve at the local soup kitchen or volunteer agency when they wish
  • Freelancers don’t need someone to nominate us for recognition—the love of family or friends may be all we seek
  • Freelancers don’t need managers’ permission and a corporate training budget and an individual development plan in order to attend training, or to use work time to read a good book or attend a professional event. We just do it, although we miss having a corporate budget!
Freedom to do the work you want to do is consistent with Herzberg’s prescription of job enrichment to increase motivation. In lieu of a job description, the freelancer can pick their scope of products and services. This is a powerful motivator. As a personal example, I was with a large HR consulting firm where I was in charge of the global mobility practice for the Asia Pacific region. I was good at it, and my billable consulting exceeded all other consultants in a group of more than 200 people. But I was an even better consultant in the area of broad based rewards (compensation) and total rewards (holistic rewards) consulting. But since my job was only global mobility, I eventually was made redundant (laid off) since there was another senior person in the practice, and due to a corporate cost-cutting driven from headquarters far away. Looking back at the last 6 years, roughly 95% of what I have been doing as a freelancer would not have been permitted at my former firm, since I was in a specific role, global mobility. Others were doing pay system development, job evaluation, benchmarking, incentive design, salary reveiw support, training, etc.

The Freelancing Value Proposition

The above rewards—flexibility when and where to work, what work to do, volunteering, time with loved ones, freedom to read, attend a learning opportunity or write a blog when inspired—can be compelling, provided hygiene needs are met. This is the Freelancing Value Proposition – do this and get that. What we must do is take initiative to create and define our products or services, market ourselves, close sales, perform work, collaborate with clients and associates, send invoices and collect. Repeat. It’s not for everyone, for sure. But for those who can brand themselves and win gigs, it’s a good deal.
In light of the Freelancing Value Proposition outlined above, the people who may be most motivated to be a freelancer are those who:
  1. Can meet their physiological and safety/security needs without having a corporate job, I.e. they can earn enough from freelancing and can secure medical insurance independently, through a spouse or via self-insurance (rainy day fund); and
  2. Are highly motivated by work-life balance for its own sake; and
  3. Are willing to exchange corporate affiliation, corporate activities, corporate recognition, corporate training, etc. for other sources of recognition, affiliation, growth or achievement, which are made available through much greater work-life flexibility
In my own case, I have found I can meet my needs for affiliation through teaching and meeting with clients, former clients, students, former corporate colleagues, etc. I have coffee meetups 2 or 3 times a week, in addition to client and associate consultant interactions. As for recognition, it’s admiring the person in the mirror until you happen to win awards or get invited to speak at conferences. My reputation in the field of total rewards gave me confidence I could continue to receive a bit of sunshine once in a while, in the form of website or LinkedIn followers, likes, etc. As for growth, I have invested in myself in ways an employer would probably not approve:
  • ACTA certified in 2013/2014
  • Certificate in Business Mandarin Fundamentals this year
  • Conducted research to understand global mobility and performance management trends in Asia
  • Presented on Contractualization at the Employers Conference of the Philippines in 2017
  • Read books by Daniel Kahneman and David Rock
  • I learned how to create Learning Circles in 2017
Herzberg and Maslow were correct, in my view. When applied to today’s gig economy, we need to recognize not everyone wants corporate employment. Employers in need of contingent workers must establish a freelancing value proposition consisting of money, in lieu of other rewards, knowing there are people out there in the gig economy who are happy to take the gig. Smart employers may even wish to find a way to provide higher-order rewards such as involvement in company activities, but should keep in mind the person may have other ways to satisfy their higher order needs without their corporate programs.
My advice to freelancers: don’t just work and get the money. Buy insurance, spend time with friends, family and colleagues, get recognition and continue learning.
Your thoughts?
*my firm, Freelance Total Rewards is a gig economy alternative to the big product-focused consulting firms

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One Comment
  1. Great article Tom. A good reflection for those currently in or attempting to go into the gig economy.

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