One of the most significant US workforce shifts to come out of the past year is the growth and popularity of freelancing. As more high-skilled individuals choose to freelance during the COVID-19 pandemic, big businesses are starting to pay attention.
Just how large is this shift? 12% of the U.S. workforce turned to freelancing for the first time this year with nearly 50% already seeing freelancing as a long-term career opportunity. As of September 2020, an estimated 59 million Americans performed freelance work this year, representing 36% of the U.S. workforce, an increase of 2 million freelancers since 2019.
As more skilled workers choose freelancing, companies are questioning whether they need such a large staff of full-time employees at all. This trend will no doubt continue as businesses see the benefit of hiring talent only when and where they need them.
A new study titled “Building the On-Demand Workforce” by Harvard Business School and Boston Consulting Group (BCG) found that the majority of large businesses see high-skills freelancers as an important part of their workforce and plan to hire more of them in the near future.
“90% of businesses saying that high skill freelancers will be an integral part of their talent strategy going forward.”
The study asked senior leaders at 700 large American firms with revenue over $100 million about their plans to hire, search for, and integrate freelancers into their workforce. The results? Big businesses want freelancers. 60% report already using freelance platforms to find high-skills freelancers for their company. With an incredible 90% of businesses saying that high skill freelancers will be an integral part of their talent strategy going forward. That’s huge.
While small and startup companies have relied on freelancers for years, this is the first time that such a dramatic preference for freelancers has been seen by large companies as well. In the past, it was normal for an employee to stay with one large company for most of their career. Now, more businesses are willing to go against this trend and recognize that they don’t need a full-time 9-5 employee to see the value. In fact, 60% of business leaders surveyed say that they increasingly prefer to “rent,” “borrow,” or “share” talent with other companies.
In the survey, 60% of leaders reported that it was “highly” or “somewhat” likely that their core workforce would be much smaller in the future. This is a big change from the way large companies used to think about their workforce. Having to adapt to a new way of work this year pushed companies towards embracing technology and forced them to change their traditional ways of hiring in order to survive the crisis. Delivering on important business goals puts pressure on finding the right talent, fast. And freelancers can be the answer.
Companies hire freelancers for convenience and flexibility of labor costs, two things that everyone needs more of this year. There’s no doubt that freelancers will become a critical part of the workforce for larger businesses over the next year and beyond.
Read the full study here.