The Self-Employed Online Freelancing Market in China – A Growing HR Business Sector and Resource

February 16, 2021 Posted by China Briefing Reading Time: 3 minutes

COVID-19 and the rise of digital technologies are pushing traditionally employer-employee based economies, such as China, into growing markets in terms of freelance market volume, according to a report issued by PwC.

The demand for this type of employment will increase due to a decrease in the share of the working-age population: hiring suitable people in China will become increasingly difficult. In the context of a shrinking market, companies will look for new ways to find people to solve project problems; it will become more and more difficult to hire suitable employees, in turn shifting opportunities to freelancers operating on a project, rather than salaried basis.

How this occurs will vary from industry to industry. For example, it may not be possible to convert most workers in the services sector, housing, and communal services to freelance. The choice between an employee on a freelance basis and a permanent one is relevant only for a relatively small number of organizations and is associated more with the economic needs and capabilities of companies and citizens than with the size of the working-age population.

However, PwC predicts that freelance platforms or specialized providers offering freelance workers for the corporate sector will more than double their market presence by 2025 compared to 2020, and that the growth of freelance platforms will lead both to an increase in employment of the population and to an increase in the employer’s labor productivity. This is because work can be outsourced to a retiree, a woman on maternity leave, an expatriate abroad, all of whom will have opportunities to work on certain projects where and when their expertise is required.

At the same time, with its greater flexibility, freelancing will enable people to discretely perform the tasks they are particularly good at. This will allow them to increase their earnings and increase productivity.

The demand for freelance services in China will be supported by both the private and corporate sectors of the economy. Key areas of demand in the long term will be areas, such as design and multimedia, IT, content and translation, finance, management, and HR. It will also grow at the expense of future graduates of schools and universities. For some businesses, students and interns are economically attractive – they cooperate remotely or take on project work, and graduates are accustomed to remote study and prefer to pay more attention to the balance of work and personal life, doing this much more often than, for example, thirty-year-old employees.

This will give rise to a new class of Chinese citizens appearing – the self-employed.

The turnover of the global freelance market in 2020, according to estimates released by PwC, amounted to US$6.5 trillion in 2020 and will grow by about 16 percent a year to reach almost US$14 trillion by 2025. The top 10 most adapted markets for freelancing are the United States (over US$1 trillion), India (US$680 billion), and Canada (US$130 billion).

Moving into 2021 and beyond, some businesses are planning to replace up to 30 percent of their employees with freelancers. Businesses need access to broad expertise and lower payroll costs, and demand for freelance employment will grow by the decreasing share of the working-age population and making work on demand more attractive.