The freelance revolution is well ahead of schedule – and as businesses make decisions about how to weather economic uncertainties in 2023 and beyond, more and more leaders are investing in open or contingent workforce models to mitigate risk and increase productivity.
News of mass layoffs and downsizing, from Twitter to Meta to Stripe, have been splashed across newsfeeds this year. Layoffs.fyi has tracked 853 tech companies who’ve made layoffs in 2022, with an eyewatering total of 137492 employees laid off in total.
And these layoffs won’t be the last as businesses prepare to navigate economic changes in 2023 and seek to radically change practices to meet the demands of a changing marketplace.
With remote work becoming a necessity to most businesses in pandemic times, decision-makers are now at a unique crossroads when it comes to hybrid, remote and open work models. Staff have portable devices usable from anywhere, as businesses were forced to work remotely due to restrictions.
If your business is looking at freelance and contracting hires, a more open workforce can bring a number of benefits. In conversations about the future of work, and as businesses prepare for 2023, the discussion around freelance and contract is more active than ever before amongst HR and business leaders.
We’ll look at some of the benefits of integrating freelancers and contractors into your workforce, and how hiring practices are evolving to meet the changes in the marketplace.
What is the freelance revolution?
The freelance revolution is by no means new to the narrative around the future of work and digital transformation. Accenture predicted a decade ago that at least one Fortune 500 company would rise staffed only with open talent below the C-suite level.
A decade on, and post-pandemic, “the freelance revolution is, if anything, ahead of schedule”, as Jon Younger Ph.D. writes in his excellent Forbes piece (great reading for those seeking an expert overview of how the narrative around freelance has shifted).
And in uncertain times particularly, the benefits of an open workforce, or hybrid and integrated workforce, are clear. As Steve King of emergentresearch.com, and John Winsor of the Center for the Transformation of work have argued: the best workforce is one that combines stability, expertise, and the ability to pivot in response to opportunity and threat.
What the stats say:
- 73% of tech companies have integrated teams of freelancers and employees (a.team)
- 71% say that bringing on freelancers or independent workers gives their business greater agility during times of economic uncertainty (a.team)
- In the face of layoffs and turnover – 50% of HR leaders say they are more likely to hire freelancers moving forward (a.team)
- 80% of corporate leaders plan to increase their use of freelancers during periods of uncertainty (Fiverr)
- Nearly 70% of workers surveyed by MBO Partners, featured in the Harvard Business Review, reported feeling, “more secure working independently.” A significant increase from 32% in 2011 and 53% in 2019.
Freelancing face-lift: freelancing is more appealing to permanent employees than ever before
In the past, permanent employees have felt secure in their 9-to-5 jobs, with a reliable source of income, attractive benefits, and clear career progression. Freelancing, contracting, or becoming self-employed means trading off that security and the camaraderie of working in an office, for more independence, autonomy and freedom.
However post-pandemic, we’ve experienced one of the strongest candidate-driven markets we’ve ever seen. In the wake of social and economic uncertainty, workers across the world were still choosing to move to new jobs that better met their needs: yes, salary was a factor, but also work-life balance, employee benefits and company culture played important roles. And those needs weren’t just fulfilled by changing permanent roles…
The Bureau of Labor Statistics reported that 4.3 million Americans quit their jobs in January 2022 alone. Many of those quitting turned to self-employment: “31% of employees who left their job in the past six months did so to start a new business according to this McKinsey study.
What are the benefits of hiring freelancers and contractors
There are lots of reasons businesses hire freelancers and contractors – and it very much depends on their business needs and goals, however, there are themes that are useful to understand:
Internal link:[link to our digital nomad interview]
- Specialist skills: many of the freelancers and consultants Salt work with are expert in their specific fields, which is why they’ve set up an independent business. It’s a quick way to benefit from expert experience when it’s needed – particularly in Digital.
- Speeding progress: freelancers and consultants often provide high-quality work fast – because they are hired with a specific task or project in mind. They are able to focus their key skills and expertise to make progress – where employees are spread across multiple functions.
- Large, diverse talent pool: companies using freelancers and contractors benefit from a wide and diverse global talent pool, and if working with a company like Salt, that pool is vetted and verified as having concrete and needed Digital skills that can make all the difference to reaching that all-important milestone on time!
- Risk management: often when a leader or specialist leaves a company progress on a project or product is completely halted and finding a permanent replacement can take considerable time. With contractors and freelancers, you’re investing only for a period of time – and a wide talent pool if an individual does leave before their work is complete.
- Flexibility and scale: especially in uncertain economic times, launching a business or product, or launching in a new market, is risky. Companies can offset that risk by working with freelancers or contractors, so they aren’t locked in by a permanent salary and cost.
- Diversifying your perspective: you can increase diversity, which ensures new perspectives and ideas to inform your business, with freelancers from different backgrounds, in different countries around the world.
- On-demand: freelancers can be hired at any time, and quickly. Flexible schedules and hours mean they can work overtime and over the weekend – in sprints or short bursts – that see the goal completed on time. This is all agreed upon and negotiated ahead of time, unlike unplanned employee overtime which eventually takes its toll on mental health and productivity.