Me Inc: the rise of the freelancerby
Since 2009, the number of freelancers working in the UK has risen by 25%. Together they turnover an estimated £109 billion a year. And more than 2 million people now classify themselves as contingent workers or independent contractors. People who’ve made their living working from one project to the next have always been around.
However, in recent years freelancing has become a lifestyle choice rather than a necessity.
There are two key drivers for the rise of what is now being called “the gig economy.” From the workers’ perspective, there is a demand for diversity and autonomy in their roles and the ability to showcase their unique skill sets. For some organisations, there’s a shift in strategy from ‘I need to hire a person’ to ‘I need to complete a task.’
Whereas once salary topped employee priority lists, this no longer holds true. Our research has shown that a flexible environment - from working remotely to less restrictive hours - is gaining in importance at a rapid pace.
A linear career path is no longer of interest to today’s generation; in fact, the thought of working in the same industry or at the same company for a concerted period of time, is downright daunting for many employees.
And why should they?
Technology sector is leading the way
Our dynamic business environment, driven by globalisation and technological advances, has made freelancing a far more accessible option than ever before.
Companies like Uber and Deliveroo have elevated the gig economy to new heights and the widening skills gap in STEM fields has flipped the job market in favour of the employee.
Organisations are increasingly recognising this movement with seventy-three percent of our survey respondents reporting that they use freelancers on either a regular or as-needed basis.
A broad range of our clients across a variety of sectors are asking for advice on how to manage a contingent workforce, particularly those looking to fill positions in the technology sector, e.g. data scientists.
Unsurprisingly, the technology sector has been at the forefront of embracing freelancers, realising the tremendous contributions they make to an industry that is suffering from an extreme talent drought. But we can also observe other industries like media and customer service becoming more open to hiring contingent workers.
At the other end of the spectrum are more traditional industries like engineering. With a lot of the current staff about to retire, there’s a real desire to secure talent for the long term.
Engineering companies still hold on to the mindset of ‘pinning down’ employees for as long as possible. The cost and time of onboarding and training new joiners certainly plays a part here too. However, as workplace automation becomes more sophisticated, this issue will become less significant in the future.
It’s not all about the money
At Futurestep we consider the contingent workforce as a complementary addition to the traditional full-time workforce. My advice to businesses would be to avoid thinking that cost savings is the primary reason to ramp up the number of independent contractors.
Their hourly rates may actually be higher than salaried employees, but you are essentially paying for a unique skill that only a few select people can bring to the table.
By the same token, employers would be well advised not to enter into a financial competition and focus on other benefits they can offer candidates.
They need to ask themselves: what do staff really value above all else? What sets your company apart from others? It’s key to keep your finger on the pulse and identify these things. Then leverage your employees as brand ambassadors to communicate these messages through company channels.
Freelancers will frequently be spoilt for choice. Showing them why they should spend time with you, and giving them a flavour of what your company stands for, may well be what tips the balance.
Furthermore, businesses hiring contingent workers ought to overhaul traditional engagement and retention metrics.
As project-based work becomes the new normal in many industries, identifying short and long-term needs for contingent workers with the right skills is business-critical.
Although some industries may be slower than others to adapt to change, I am confident that we will make major strides here in the next couple of years. It’s clear that the benefits of the gig economy outweigh the downsides. We are moving away from traditional 9-5 working days and our need for an on-demand global talent pool becomes ever more urgent.
As traditional sectors continue to be disrupted by this emerging economy, it will become a force in itself for transformation.