The "freelance economy" is exploding. Today 1 in 3 Americans, or about 42 million people in the workforce, are freelancers. As more people find work as independent contractors, more businesses are adapting to take advantage of this shift in the workforce. Freelancers are filling even high-level, highly skilled positions. Here's an overview of what's going on and what it means for business.
There's a lot fueling the emerging freelance economy. The pace of business is quickening—corporations need to be more agile and scale up and down to meet market demand, which requires a contingent workforce. Meanwhile, advances in mobile technology are making virtual-work sharing and a pick-up-and-go work style a reality.
The unconventional choice
According to a recent study about The Future of Work released by Tower Lane Consulting, as technology continues to advance at an ever-increasing rate, it's necessary for businesses to constantly acquire new talent. Piggybacking on this tech trend is a shift in thinking among Millennials, who are "opting to follow unconventional career paths that allow them to maintain their independence."
The study also found that central to this shift is "the volatility of the current economy, which encourages brief relationships between companies and the talent they need." In fact, 88% of the companies surveyed reported using freelancers for projects that lasted less than a year. The reality is, freelancing is no longer a career path solely for hourly contractors and programmers. Companies are filling critical roles with temporary experts to meet a variety of specialized needs at different times.
The mobile revolution
Advances in cloud computing services, affordable software platforms, and increasingly seamless collaboration over the Internet are having an enormous impact on the freelance economy. According to Dave Maney, founder and CEO of Deke Digital, "the ease with which businesses today can find and collaborate with a contractor, freelancer, or small firm with the exact skill set and reputation needed is helping create a new kind of employment ecosystem."
However, there are some kinks to be worked out within this new ecosystem. Because freelancers are independent workers that are often hired at scale, they can be difficult to manage. According to the Future of Work study, this includes inefficient payment processes and poor visibility over work completion. (Two-thirds of companies surveyed manage their freelancers on-site, even though a lot of the work could be done remotely.)
Currently, there's a need for new management tools capable of ironing out the inefficiencies that come with a rising freelance workforce. Companies such as the recently merged Elance and oDesk offer programs to help businesses streamline the hiring of freelancers by mitigating the administrative work involved. It's important to acquire new tools and processes that can monitor and facilitate the entire freelancer life cycle within a company.
The freelance economy is rising and here to stay. Businesses, particularly large organizations that plan to hire at scale, would do well to accommodate freelancers by optimizing their ramp-up process. What inefficiencies do you notice among freelancers within your own organization? How can they be remedied?