freelancers

Freelancing Is The Future of Business

By Catherine Lang-Cline

According to Dustin Haisler, the Chief Innovation Officer of e.Republic, there are currently 53 million people, or 34% of the American workforce, freelancing.

By the year 2020, an estimated 74 million people, 50% of the American workforce, will be freelancing. 

What is causing the shift? First reason, the Millennials. While we have all been discussing the working practices and beliefs of the Millennial workforce as they started to enter the market, something happened: they grew to be a larger demographic than the Baby-Boomer generation. What this means is, if you want to be competitive in business, you are going to have to hire a lot of Millennials, and they are wanting to freelance.

The second reason, everyone else wants to freelance as well. In general, everyone is looking for a lot more life balance and finding their purpose. A lot of that purpose lies in the things that they are very good at. So even the seasoned workers are opting out of “business as usual” and looking for something that is giving them more purpose, more freedom to be with family, aging parents, or to just simply do the things that they want to do. Money may not matter for some as they are setting their own schedules and starting their own businesses. They are measuring success not by money, but by time, the time they get to choose what they want to do. And the time they get to work on things that they love to do.

What is great is that it can still result in positive results for your business. Staff having control of their time does not mean that they will work less. Most people work more, but choose when they will work. It can also help your business by eliminating the cost of hiring and firing. You can hire people as needed. You can afford to have people that you normally could not afford work on special projects for you because you are not hiring them and needing to keep them. You can briefly afford to hire the best in the business because they leave when they have completed the job.

As always, understand how this relationship works. Freelancers and contractors are not employees. Be very clear about this to people coming in who want to serve as a freelancer or consultant, as well as the people on your team. Not doing so could lead to tax implications and employment violations. If you have any concerns about how this is handled, you may want to contact your accountant or look into having a staffing company take on freelancers and contractors as temporary employees. That way, the responsibility of taxes, healthcare, etc. would be the responsibility of the staffing company.

Freelancing is becoming more of the norm. In many ways, this can be a real advantage to your company. You can work with people as they are needed rather than worrying about the cost of hiring, firing and overhead. Plus, you can surround yourself with the professionals that are working with a purpose.

Freelance Prediction: The Future is Now

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!