We recently wrote an article in Forbes that addressed the excitement mounting around the rise of the freelance economy and the impact we feel this will have on the workforce as a whole. As staffing models evolve to include the increasing number of freelancers, or independent contractors, we can expect to see freelance workstreams become an integral part of comprehensive talent strategies, truly changing how business is conducted.
Freelance Labor: Trending Upward
When we take a look back, data from the Bureau of Labor and Statistics shows that in 1995, full and part-time employees managed by HR departments made up 93 percent of the workforce. Today, freelancers and temps make up nearly 15 percent of the workforce, and by 2020 it’s expected to be nearly 20 percent. Freelancers alone are expected to grow from ~7 percent to 16 percent of the workforce.
What does this growth mean for the future? Based upon what we see at Work Market, our predictions are::
- This upward trend in freelance labor should continue to climb.
- Businesses are thinking about centralized models of acquiring freelance talent to accommodate their work needs. This workstream is maturing.
- Organizations that use freelancers at scale will need to be equipped with new tools and processes to handle the entire freelancer workstream.
Where Do Freelancers Fit Today?
As we look to the future of work, it’s important to underscore the differences in the various classifications of labor and how they are managed inside an organization. Currently, businesses typically centralize the management of two categories of labor: staff and temp workers, but struggle to manage independent contractors centrally. HR departments are on point for recruiting and hiring staff, and staffing firms are typically hired to handle temp workers. The main difference between temps and freelancers is that temp workers are employed by a staffing firm and go through the staffing firm for every aspect of their contact with an organization. In contrast, freelancers are independent workers that have a direct relationship with an organization, with the focus on doing specific assignments. They are often hired by the managers that need their work directly. This leads to inefficiencies within the organization, especially when freelancers are hired at scale. These inefficiencies underscore the need for a viable freelancer management solution.
How Will the Enterprise of the Future Use Freelancers?
We believe we’ll see the emergence of a freelancer management workstream, which will be a new category of talent acquisition that businesses will incorporate. This, we believe, will help businesses address the complexities of the growing freelancer population by having a dedicated way to harness the power of an on-demand workforce. Our company, Work Market, helps businesses of all sizes to manage the complete lifecycle of their freelance labor from finding workers in a marketplace, onboarding them within the organization, managing their work and all the way through payment and rating for future usage. In order to compete in the marketplace at large, businesses will need to be able to integrate the freelance workforce. We believe strongly that the technology, tools and processes that our company provides will significantly help this integration and management process while dramatically reducing unnecessary costs.