How An Exploding Freelance Economy Will Drive Change In 2014

How An Exploding Freelance Economy Will Drive Change In 2014

The following guest post is by Jeff Wald, cofounder, COO and CFO of WorkMarket, a software platform for businesses to find, manage and grow their freelance workforce. You can follow Jeff on Twitter at @jeffreywald.

Student laptop (Photo credit: Wikipedia)

In 2013, the freelance economy continued to dominate the discussion about the way we work. One in three Americans (roughly 42 million) are estimated to be freelancers. By 2020, freelancers are expected to make up 50% of the full time workforce. Independent work is becoming more common across all generations and the vast majority plan to remain independent in the coming year.

The freelance economy is exploding at exactly the same moment that companies are undergoing a major shift in how they hire. Talent is moving from a fixed cost (and one that’s historically been one of the largest across a business) to a variable cost, with companies staffing up and down as needed. Businesses have the ability to quickly on-board hundreds or thousands of freelance workers– provided they have the tools and systems in place to manage them. The booming online staffing industry is also accelerating the growth of the freelance economy. This $1 billion industry provides a valuable alternative to companies that are leveraging a contingent workforce. In fact, the Staffing Industry Association saw the online staffing market grow 60% last year, and we see no signs of that growth slowing down in 2014 and beyond.

How else can we expect the freelance economy to reshape the workforce in 2014? Here are a few of my predictions for the year to come:

The Enterprise Emerges. Small and medium sized businesses have been taking the lead on the freelancer boom — until now.  In 2014, we can expect to see enterprises entering and playing a more active role in the freelance economy, which will bring a new degree of formality to the landscape.  For example, small to mid-size businesses typically work with freelancers on a one-off basis, and thus, often customize the terms of the arrangement as they go. This is not the case for bigger companies who already have established processes and procedures. For freelancers, this will potentially mean longer payment terms and stringent requirements around insurance, certifications, background checks and legal agreements. It will also mean greater earnings as enterprises typically pay higher wages and send more work to freelancers. At Work Market, we see the average enterprise send a freelancer 30+ assignments per year, whereas a small business sends three.

Work Goes Mobile. When it comes to the freelance economy, mobile equals efficiency. As more and more workers carry mobile devices, we can expect to see everything from a decrease in the time needed to locate an available freelancer to an increase in communication between a business and a freelancers. For example, mobile devices will enable freelancers to start receiving push notifications of location based work, enabling freelancers to more quickly move from project to project. Other benefits include the ability for on-site workers to check in, obtain digital signatures, take photos of completed work, and close out work while on site using mobile devices. We will also see an increase in mobile analytics platforms for freelancers, which will give businesses a greater ability to track and analyze the work of their freelancer workforce.

Read More