The Effects of Freelancing on the Future of Work
The idea of a more flexible workforce is shifting the landscape of hiring across almost all employment fields. And while full-time, long-term hires are still considered the ideal solution for corporations, hiring managers are more open-minded about looking into alternative arrangements to curate a well-rounded team. One of the most beneficial options for advancing the organization is hiring freelancers in lieu of traditional salaried employees.
Current statistics show that there are as many as 57 million freelancers; “growing at three times the rate of the traditional workforce, and freelancers are predicted to make up the majority of the American labor force by 2027.”
Although the overall number of freelancers is on decline for the year 2018, it’s not so worrisome considering that research has concluded it to be from a strong salaried job market. As Spend Matters explains,
“About 600,000 fewer workers were in the freelance pool in 2018, according to the Edelman Intelligence report, which was commissioned by Upwork, an online freelancer marketplace and enterprise solution company, and the Freelancers Union.”
And while the numbers are dwindling just a bit, as the millennial population grows, so does the opportunity for corporations to pursue the benefits of this new workforce.
“Companies are now forced to consider implementing freelance hiring strategies to attract millennials, since 47% of the demographic freelance — which is more than any other generation. The next generation of workers will likely follow suit, meaning that companies starting to augment their core internal teams with short-term, freelance talent now stand to benefit most and be more successful at attracting future candidates as the U.S. workforce continues its transition to being primarily freelance-driven.”
There’s also an uptick in high earning independent candidates that have strong backgrounds in their field. Forbes notes an MBO Partners' study “involving more than 17,000 in-depth surveys of freelancers.” Which discusses,
“Many independent workers are serving business and enterprise clients. Currently, there are 7.3 million full-timers who serve businesses, a group that has grown 62% since 2011, MBO Partners has found. Many are very experienced in their fields. In the group’s sample, which skewed male and had an average age of 52, 45% had graduate degrees, and the average annual income was $98,000.”
Interestingly, too, though there are fewer freelancers on the whole, they’re employment is still outpacing conventional full-time hiring.
“The growth of the freelance workforce is three times faster than the traditional workforce,” noted Stephane Kasriel, CEO of Upwork, in an interview. And in a sign of just how much freelancing could grow, 47% of working millennials now say they freelance in some capacity, the survey found.
Especially in fields that you may not expect,
“As an NPR piece illustrated, one West Virginia law firm is bypassing the tradition of hiring associates and paralegals and is instead delegating its mounds of niche work and tasks to freelancers and technological solutions. It's a bold way to reimagine legal life, but it also signifies that the freelance wave will hit the economy like a talent tsunami.”
There are several reasons for the change in hiring practices from a corporate standpoint, coming down to a few key factors, namely lackluster talent, too few specialized skills, the cost of hiring a full time employee; as well as the ability for staffing organizations to meet the needs of their clients quickly and efficiently.
Take for example, Upwork’s “Future Workforce Report: Hiring Manager Insights on Flexible and Remote Work Trends, a study conducted by Inavero, an independent research firm, that sampled “more than 1,000 hiring managers within U.S. organizations, across 10 industry verticals and ranging in size from under 50 employees to more than 5,000,” which found,
“Fifty-two percent of hiring managers cite talent shortages as the key driver to adopting a more flexible workforce, and 53% agree that companies are embracing more freelancers, temporary and agency workers (“flexible talent”) compared with three years ago. Hiring managers believe that work done by flexible talent will increase by 168% in the next 10 years.”
Acquiring the most skilled workers is another primary reason for becoming more thoughtful about their approach to contracting unconventional team members as high-earning freelancers become more prevalent. Especially “because of the growing demand for people with specialized skills leading to traditional workers with those skills to become freelancers. This is especially true for older workers looking for more work autonomy, flexibility and control.”
It, too, can have major impacts on a business’s bottom line. There are many advantages that extend into savings for enterprise organizations when looking at the real cost of hiring freelancers versus full-time employees—
“Once you’ve made the decision to hire a candidate, training is one of the costliest investments that a company makes. Orientation and integration takes time. This is where having an experienced freelancer really saves you. The best freelancers come to jobs ready to begin on day one and require less training than a standard employee. You might say that being ready for new jobs and challenges is hardwired into freelancers. This is not because freelancers are inherently better at training but because they only need to know exactly what the task requires.”
Conventional agencies also cannot always meet the needs of their clients impactfully in the short-term. As Upwork notes in their article, How Fortune 500 Companies Are Successfully Adapting to Online Freelancing Platforms,
“Today, firms should quickly adapt to changes in their business environments, for instance by initiating ad-hoc projects with quick turnaround times. The challenge confronted by Samsung was that their headquarters requested two-week delivery times for projects. However, project leaders often didn’t have enough employees to deliver on time, and agencies on average needed six weeks to find the right freelancer, before the actual work had even started.”
As with any new adoption, there are challenges when it comes to recognizing all of the implications of turning to freelancers instead of working solely with internal employees. Although they are more flexible than in-house associates, freelancers, often times, expect perks of employment; especially when they’re acutely aware that they are not getting the same everyday paybacks as members of the internal team.
So without having to provide traditional benefits packages, what are a few of the criteria of flexibility of freelancers are impressed by? These are a few of the incentives that are most effective when enticing them to come on board.
Flexible Work Environments
Freelancers are notoriously avant-garde when it comes to their work and lifestyle. Not only do they produce better and more timely output when they’re allowed to work from their own space, they are also more likely to stick around for a longer period of time.
From the Organization for Workplace Flexibility,
“Citing new research from the Flex Strategy Group, Motley Fool outlined a number of reasons why remote work flexibility has a positive impact on employees and the workplace. The benefits: 45 percent of workers say they communicate better; 60 percent of those surveyed said they’re more productive; and workers who receive training before diving into remote work say they’re better at it than those who weren’t trained. What’s more offering remote positions and other flexible options can help prevent employee burnout.
Flexible Lifestyle Opportunities
Corporations are beginning to buy into the idea of allowing employees to complete tasks without the constraints of a traditional 9-5 schedule. There are many ways that enterprise can attract top freelancers through these flexible lifestyle benefits, including adaptable work hours and the remote work option mentioned above.
And when it comes to the ever-growing millennial workforce, it’s more imperative than ever. From USA Today,
“Among the poll's respondents, 87% of those who said their company makes it possible to balance their jobs and personal life say they are satisfied at work and that they feel loyal to their employers.
Employees say, 'I’ll feel more connected if you give me the flexibility that allows me to blend my work and private life in a way that works for me,' " Katz says. " 'If you do that, I’m going to be a more loyal employee.' ''
Flexible Future Employment
One of the major perks for independent employees is that they’re making good money working unconventionally. As Spend Matters mentions,
“An online survey of 6,001 workers, also found that more freelancers are earning $75,000 a year or more. In 2018, 32% of freelancers made that or more, compared with 17% in 2014, the report says. (Another report said more high-skilled freelancers are making more than $100,000.)”
They also want more out of the future of their lives, which sometimes means dabbling in passion projects and the like instead of diving into a long-term career option. It transcends all different categories of works too. Via Salon,
“A 2017 study found that the majority of freelancers in [European Union] countries are “slashers”, meaning that their contract work supplements another part-time or full-time position.
These additional earnings can vary considerably. Those who spend a few hours a month editing instruction manuals from home may earn a few hundred euros a month. Freelance occupational therapists may pull in ten times that working full-time in this growing industry.
“Perhaps the most glamorous face of freelancing is the so-called creative class, an agile, connected, highly educated and globalised category of workers that specialise in communications, media, design, art and tech, among others sectors.
They are architects, web designers, bloggers, consultants and the like, whose job it is to stay on top of trends. The most cutting-edge among them end up playing the role of social “influencers”.
When taking this into consideration, there is a positive outlook for how enterprise organizations can adopt freelancers into their future plans for success.
Silicon Republic puts it this way; “There is opportunity for both workers and employers with the rise of freelancers. For workers, there will be more options than ever to either supplement current earnings or to travel the world while freelancing. For employers, the rise of freelancers creates greater ability to leverage remote teams and to hire for specific project skills.”
With so much potential for success on behalf of both corporations and freelancers to collaborate in a meaningful way, it’s necessary for the organizations to begin to facilitate new plans for how their teams are comprised on a granular level. It’s an exciting time to experience how work is evolving in profound ways, commencing with the new way we view independent work.