We have seen the financial crisis, which originated out of some very dubious lending procedures in the U.S sweep through the North American continent, spill over into Western Europe and Asia and steam roll into Ukraine.

As the credit crisis began to unfold around the world many leading Ukrainian government authorities claimed that Ukraine would be isolated from the troubles that many developed economies were experiencing.  Today’s situation in Ukraine shows that the country is not immune and is in fact experiencing the same financial woes, without exception. Ukraine has seen its stock market tumble, its banking sector crippled as sources of external borrowing have dried up, plus its hryvnia plummet due to the absence of external financing.

The global economic crisis has revealed that Ukraine’s economy is dependent on what happens in the world, but more importantly that is has inherent structural, institutional, and real economy problems. Eastern Ukraine has been hit the hardest due to falling revenues from export of metals, the center feels the pinch as financial resources from big international economic operators are first and foremost going into high-grade assets in developed economies with whatever resources being left coming only afterwards into emerging economies.  Western Ukraine amidst this meltdown has been able to stay afloat so far due to a couple of key reasons. First, Western Ukraine’s economy is fuelled by small and medium-sized enterprises, not by international corporations. Western Ukraine has preserved its burgerliche Gesellschaft based economy to this day and this means that not all of this region’s eggs have been placed into one basket.   Secondly, where other regions of Ukraine bought into the loaning frenzy, Western Ukrainians remained skeptical and opted for keeping their savings in a cushiony place, their mattresses. As a result, fewer individuals are suffering credit related financial losses.

What does all of this mean for Western Ukraine? A great deal. First, Western Ukraine will be able to come out of this global crisis faster than the rest of the country as its regional economy is not as tightly dependent on the fate of global economic recovery and big multinationals. Secondly its unique mentality, rooted deeply in the organic policy of “self-help”, which evolved in Western Ukraine with the cooperative movement under Austro-Hungarian rule, will again be triggered into action. Western Ukrainians have a history of relying on themselves, pooling their abilities, uniting and moving towards a common goal.

What does this mean for Western Ukrainian business and the local labor market? Also a great deal. One of the ways in which companies and individuals can attempt to weather this economic storm and come out stronger after it subsides is to take a leap and think outside the box. The aim of the upcoming article and the cycle of articles to follow in subsequent issues of Lviv Today is to show how employers and employees alike can create opportunities during this time of crisis.

The simple and elegant tool we will be discussing first is freelancing.  Needless to say, freelancing as an alternative to traditional employment will become more attractive during this economic recession because it makes economic sense.

For those who are not yet familiar with this term, a freelancer is an individual who works independently selling work or services by the hour, day, or job with no intent to pursue a permanent or long-term arrangement with a single employer.

Why is this important and why does it matter?

From the perspective of the freelancer, the recession can actually be advantageous. First of all freelancers will continue to grow in demand as skilled workers are made redundant. Companies will be looking to replace those skills with freelancers for the following reasons. Freelancers pay their own taxes, use their own resources, work off-site, but get the job done for their clients regardless.

From the perspective of the client, when hiring a freelancer the client only buys services for a specific project with a very specific outcome. This can be writing a case study, designing a brochure or optimizing a site. Once the project is finished the client’s relationship to the freelancer officially ends. This is important for the client because he is not tied to the freelancer via an official employment contract, but nevertheless is assured that the company’s strategic and tactical plans are being executed at a fraction of what it costs to have a full-time employee on staff. Also, hiring a freelancer forces the client to take a break and analyze his business, a mini audit of sorts. The client must assume an active role, take charge and define the projects which will bring him a maximum return on investment.

Freelancing might be advantageous for both parties because of spreading the risk. Freelancers can have many employers and employers can work with many freelancers. This means that both sides are not tying their fates to each other. Freelancers are not dependent on any single company’s fortune and have the ability to work on many projects simultaneously, thereby increasing their pay cheques. Clients also are provided with the opportunity of selecting from a roster of freelancers who can do the best job for a justified fee.

On the down side, becoming a successful freelancer is a different challenge and there are parts that must be given careful consideration. First of all, freelancers are always on the job hunt. The relief of finding a project is soon tempered by the anxiety of needing to find another project and the hunt for work never really stops. Secondly, there is a constant sense of insecurity in that freelancers can’t assume that they will earn enough money in a month to cover their costs. Unless freelancers have managed to line up regular contracts, they never really know what will happen from one month to the next. Thirdly, freelancers have to be sure that they have a profile that sells as there will be a significant amount of client skepticism about what they can do and what you have done in the past. A personal site, strong portfolio, internet presence and networking are important elements in making sure freelancers are able to market themselves effectively and win over client trust.  

For these reasons, if freelancers are not willing to work as “lone wolves”, sending their CVs to a company which brings freelancers together under a single umbrella and acts as their agents in relation to potential clients, might just be a smart move. Synergy Consulting has a strong freelancer network in the areas of marketing, PR, HR and other in-demand spheres and can offer clients top-quality freelancers for their projects and provide freelancers with interesting contract opportunities.

Written by:

Natalie Haivoronska

Partner, Synergy Consulting