This past year, the Gig Economy has progressed way beyond drivers for Uber or Lyft, and now consists of a more diverse and skilled workforce. With the pandemic, more than ever, the Gig Economy has gone mainstream. This includes companies of all sizes. With the opportunity to take advantage of a flexible workforce, hiring managers are turning to freelancers for hard-to-fill roles or ongoing projects that require specific expertise. But where are they finding this talent?
While freelancer marketplaces like UpWork and Fivver have been increasing their revenue rapidly, with UpWork even reporting a 41% increase in Q1 of 2021, they actually account for only a small percentage of freelancer spend in the US. Together, UpWork and Fivver did $572 million in revenue in 2020. That may sound like a lot until you consider the larger picture. Last year, companies in the US spent an incredible $1.3 trillion on the gig workforce.
The Gig Economy has shown itself to be extremely valuable to startups who want to grow quickly and build targeted elements of their business in a super flexible way.
This surge of freelance workers shows no signs of slowing down. In fact, a survey by Braintrust found that 85% of knowledge workers are open to becoming freelancers. They want to work from anywhere, be their own boss, and work on the jobs that interest them the most.
With this flexible workforce comes a whole new set of compliance and legal concerns. Managing and paying this workforce is much different than how you may be currently managing full-time, salaried employees. As a startup, your focus is on fundraising, growing your revenue, and making an awesome product, but there’s something else you need to worry about too: freelancer classification and compliance.
According to a new report released by Ceridian, a human capital management software firm, 62% of global executives believe that freelancers, or gig workers, will substantially replace full-time employees within the next five years. The findings also shed some light on how the post-pandemic workplace may be configured, with many executives maintaining hybrid and remote work arrangements.
Now that the pandemic has shown everyone just how easy it is to work remotely and flexibly, more and more employers are planning to stick with freelance, part-time workers even after they return to “normal.” In fact, 60 percent of US business leaders surveyed would prefer to “share talent” with other companies, and 60 percent anticipate a core workforce with fewer full-time staff over the next few years.
Last year, the spread of the coronavirus caused retailers to shutter and in-person shopping to grind to a halt. But these past few months have shown that shoppers are gradually returning to stores, marking a shift from the predominantly online consumer habits that dominated 2020. In fact, visits to physical stores have increased by 28.5% since the start of the year. Customers who’ve spent the past year stuck at home are ready to shop and they’re ready to have in-person experiences.
In a year as tumultuous as 2020, employee engagement can be key to building a successful business. Improving your employee engagement results in employees who are more committed to their jobs, will do their best even when the manager is not watching, and are willing to go the extra mile. Simply put, engaged employees lead to better business outcomes.
In case you needed more convincing, overall, companies with high employee engagement are 21% more profitable. This means that in the years ahead, the most successful organizations will be those who make employee engagement central to their business strategy.
This past year has shown us all just how important flexibility is in the workplace. Rigid schedules are a thing of the past for most companies, and relying on only full-time 9-5 workers is too. Now, most companies have a blended workforce consisting of some full-time, some part-time, and some freelance.
Many companies are still relying on multiple solutions for their workforce needs that aren’t integrated with each other. From paper schedules to excel spreadsheets, this lack of technology prevents any kind of true flexibility from happening. If managers need to use one resource to manage their budgets, one for scheduling talent and yet another for paying their talent, there is no way that efficient and timely staffing can happen.
Over the past year, companies of all sizes continue to work with more and more freelancers to help them run their business across all types of job functions, diverse skill sets, and departments. If fact, in 2020 there were 64.8 million freelancers in the US. By 2027, that number is expected to hit 86.5 million, accounting for more than half of the total US workforce. But hiring, onboarding, and managing freelancers is a whole different ball game than overseeing your full-time employees.
What we’ve witnessed in recent years is a dramatic shift from traditional 9-5 full-time employment to more freelancing, part-time, and contract roles. This change is driven by both sides: employees, who want flexibility and freedom to be their own boss and employers, who see the benefits of being able to tap into talent for work exactly when and where it is needed.
We all may be familiar with a freelancer who works for a company on a one-off project basis – someone you hire from a talent platform, assign a project, and their work for you is done. Instead, these past few years have seen the rise of a new type of freelancer, a Permalancer. This is a category of workers somewhere between a freelancer and a full-time employee. Unlike traditional freelancing, they have ongoing contracts rather than piecemeal work and function for companies in more like a consultant role.