By Kristen Harris
Freelancing is the future, and it’s here now. Looking at both the current state and future predictions in the American workforce, freelancing is going to continue to grow.
First, a definition: Whether they’re called freelancer, independent contractor, contingent worker, self-employed, free agent, gig worker, or something else, there are a lot of people working outside of a traditional full time employee/employer arrangement. Although the work arrangements may vary, for simplicity, these people are often lumped together under the category “freelancer.”
Depending on which report you read, somewhere between 34-40% of the American workforce today is freelance. That number keeps growing year after year, and is predicted to reach somewhere in the vicinity of 50% by 2020.
Whether you think this is a good thing or not totally depends on your perspective. There are a lot of advantages to freelancing, including schedule flexibility, variety in the work, and a feeling of independence. There are also advantages for companies hiring these freelancers, including the flexibility to scale up or down based on company needs, and the ability to hire for a specific skill set short-term.
There are also some negatives. Freelance work is less predictable, may not be considered a traditionally secure job, and often includes limited or no benefits. This is especially true for certain groups of people included in this total freelancer group, such as on-call workers, independent contractors who basically are running their own small business and need to find their own customers, and part-time workers.
For the companies hiring freelancers, workers may not be as committed to the company’s cause, there is still a talent shortage for certain roles, and often, premium rates are charged to offset the short-term nature of projects. From a legal and HR perspective, it’s also difficult to track and manage all of these different work arrangements.
Recently, this legal area has been particularly concerning. Rulings against large companies like FedEx and Uber regarding their use of independent contractors have caused them to re-look at their work arrangements. Also, over the past several years, more resources have been dedicated to investigating employee misclassification (non-qualified 1099s) at both the state and national levels.
There seems to be a disconnect between predictions for the future of the American workforce (more freelancers) and current government regulations (more employees). Whether you think the growth of freelance work is the wave of the future or the scourge of the universe probably depends on where you sit. But these arrangements will continue to flourish as long as companies and individuals feel the benefits outweigh the negatives. The challenge will be in finding a way to reconcile company and freelancer needs with government rules. Welcome to the future!