Freelancing in America: Rise of the Contingent Workforce

FreelancingInAmericaBy Dr. Woody

September 30, 2013

We live in an on-demand world where speed is everything and companies better be prepared to keep up, or get left behind.

Modern companies are faced with moment-to-moment fluctuations in reaction to market demands that require quick decision-making and agility to adapt to new trends. But these characteristics are rarely seen in large organizations.

To meet these new demands, companies are realizing they must change the way they view their workforce, and many are shifting toward a contingent workforce.

According to Accenture’s 2015 Accenture-Future-of-HR-Rise-Extended-Workforce report, “to compete in the future, organizations will need to push talent management beyond the confines of the enterprise wall to include the new extended workforce: a global network of outside contractors, outsourcing partners, vendors, strategic partners and other nontraditional workers.”

Companies are increasingly relying on freelancers to help deal with the rapid pace of change and innovation in the global economy. The Labor Department’s recent monthly jobs reports have shown that companies are focusing less on longer-term hires and more on filling short-term needs and hiring part-time workers. Essentially, employers are adapting a “just-in-time” model for staffing.

Right now, midsize and large businesses are hiring freelancers in record numbers. A new research report titled “The Future of Work” commissioned by online platform company Elance and conducted by Tower Lane Consulting revealed that 60% of enterprises plan to increase freelance hiring in 2014. This shows that corporate America’s view of contingent workers has moved from tactical to strategic. Some of the factors driving this change include the need for just-in-time hiring, temporary experts and the virtual reality of remote workers.

Just-in-Time Hiring. More than ever before, time to market is a critical strategic advantage and companies are looking to bring on talent fast. However, hiring and onboarding freelance staff isn’t always easy. One of the barriers to rapid onboarding has been the sourcing, payment, and communication methods for managing freelance workers. The Tower Lane survey found that 47% of surveyed companies use third-party firms to hire freelancers, which tends to add time to an already slow process. Other concerns expressed by employers in the survey, include:

  • 34% find it hard to manage and communicate with their freelancers
  • 36% find the process of paying freelancers cumbersome
  • 37% feel they can’t find good freelancers

To mitigate these problems, Silicon Valley-based Elance has developed the Private Talent Cloud, a cloud-based tool to help employers find and onboard contingent workers under tight deadlines.

Although anathema to many in the staffing industry, the concept of just-in-time hiring is certainly one of the most critical strategic advantages in today’s business world.  Fabio Rosati, CEO of Elance, points out that hiring managers are desperately seeking “resources to win the war for talent while retaining enterprise-level visibility and control.”

Temporary Experts. Freelancing is no longer the domain of hourly contractors and programmers. Companies are now finding they can fill critical and often high-level skill gaps quickly with freelance workers. According to the Tower Lane survey, “75% of companies surveyed use freelancers because they need a wide range of specialized skill sets at different times.”

What’s more, the Accenture report points out that, “even top-level managers and executive teams are being replaced by temporary CEOs, CFOs, COOs, and other highly skilled troubleshooters.” According to the report, the top freelancer jobs out there include:

  • Sales & marketing
  • IT & programming
  • Design & multimedia
  • Engineering & manufacturing
  • Writing & translation

The Virtual Reality. Increasingly, companies are realizing that much of work can be done virtually. Business professionals like customer service agents, receptionists, personal assistants, accountants, marketers, and many more don’t necessarily require being co-located with colleagues at an office. The challenge is in learning to view work differently and being willing to adjust to the times.

Although there are certainly advantages to physically being together, modern technologies like Skype, Blue Jeans Network and Facetime continue to enhance our ability to operate remotely in a way that still fosters quality interaction.

There are also tremendous economic advantages to a contingent workforce. On the one hand companies can save money on rent, maintenance, and energy costs while on the other hand employees can save on commuting costs.

There is no doubt just-in-time hiring is rapidly becoming the new reality. Companies no longer have the luxury of coddling a static workforce and are quickly moving to a more contingency-based model where freelancers will become the engine that drives productivity and innovation. The key to a successful transition to this model will be in streamlining the process.

Michael “Dr. Woody” Woodward, PhD is a CEC certified executive coach trained in organizational psychology.

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