Opinion: More than half of the U.S. labor force will be freelance by 2027. Here’s why that’s a good thing for workers and businesses alike

Date:

Share post:


From “QuitTok” videos to the latest trend of “quiet quitting”, businesses struggling to retain talent have seen it all. Although these digitally fueled fads and memes will surely fade as quickly as they burst onto the scene, one fundamental truth seems likely to endure: people are generally unhappy with their jobs.

According to Gallup’s 2022 State of the Global Workplace Report, 60% of respondents said they were emotionally detached at work and 19% reported being “actively disengaged.” It’s no wonder that 4.2 million Americans called it quits every single month from February to June, according to the latest data from the Bureau of Labor Statistics, with the number of unfilled U.S. jobs reaching 10.1 million at the end of that period.

Where are these workers going? According to a survey my company conducted last December, 54% of HR leaders and hiring managers in the U.S. said that people leaving their companies were becoming freelancers or entrepreneurs, saying goodbye to the traditional workforce altogether. Data published by Statista confirms the broader trend: by 2027, 86.5 million people will be freelancing in the United States, the research firm predicts, with freelancers making up 50.9% of the total U.S. workforce.

This is a good thing — both for workers and for businesses.

For starters, 56% of U.S. workers already have a job that can be done at least partially remotely.

One of the lasting legacies of the global pandemic is the way it has accelerated workers’ ability to deliver regardless of distance and location, and forced managers to focus on output rather than time (such as the conventional 9-to-5 workday). Think of it as the rise of the Talent Cloud: a robust independent workforce specializing in a range of disciplines, available anywhere and anytime to businesses that need them with quick deployment and minimum internal operation and overhead.

In the not-too-distant future, if not already, an incredible amount of talent is simply not going to be available for full-time hire.

Such rapidly shifting norms around work are creating far wider acceptance of the routines and workflows required to successfully engage freelance talent. This is opening up new opportunities for workers to join the independent labor force and reshape the way they integrate their professional and personal lives.

These opportunities already encompass areas of professional expertise that have not traditionally been considered part of the independent talent market, such as data science and analytics.

A more fundamental benefit for workers is also emerging. For many people, a “job” can feel limiting. But a “role” is empowering. Indeed, employees who quit full-time jobs most often cite as the reason not feeling valued or lacking a sense of belonging, according to research from consulting firm McKinsey & Co. 

Fortunately, in our dynamic global economy, projects rather than operations have emerged as the engine of innovation and value creation. In 2017, the Project Management Institute forecast that project-related activity would be worth $20 trillion in 2027, up from $12 trillion.

As more fluid project “roles” replace “jobs” as an organizing principle of work, this will create myriad new sources of professional meaning for independent workers, who will contribute in fulfilling new ways.

In the not-too-distant future, if not already, an incredible amount of talent is simply not going to be available for full-time hire. This is a wake-up call for businesses, of course.

But many executives will come to see it as a major plus. After all, the challenges of a static, in-house, full-time employee base are numerous: from a hiring process that is slow and cumbersome in the best of circumstances to the lack of flexibility, the high cost of retention, and the ongoing challenge of reskilling and upskilling.

Increasingly, companies will strive harder to distinguish between their core competencies and work that lives at the periphery. They will focus their fixed expenses, and deploy a core full-time team, on these core competencies. And they will learn to integrate highly skilled freelance talent to scale work at the periphery up or down depending on their changing needs and the broader environment.

Businesses will not only become more nimble and cost-efficient but also avail themselves of the best talent on a project-by-project basis, whether that project is simple and quick or complex and more long term.

The new world of work is not without challenges. Health and retirement systems, in particular, haven’t evolved enough to properly support the growing independent workforce. In a survey we conducted in 2018, more than 40% of U.S. freelancers said healthcare was their biggest challenge. The Affordable Care Act created a marketplace where anyone can sign up for a health plan but, according to 2019 data, the latest available, only 24% of full-time freelancers had a self-purchased plan.

Although policy makers have their work cut out for them, it’s clear that the Talent Cloud is already upon us. As with so many profound changes in work and business, its rise is first taking shape among faster-moving, smaller-size companies. But as this new talent model spreads, it will prove relevant for every business and bring a multitude of professional options to those workers looking to break with a traditional career.

Micha Kaufman is founder and CEO of Fiverr, a global online marketplace for freelance services.

Learn how the metaverse will change the real world. Join Estaban Ordano, co-founder of Decentraland, at MarketWatch’s Best New Ideas in Money Festival on Sept. 21 and Sept. 22 in New York.

More from MarketWatch

Here’s why the sabbatical could be the next best thing for the American workforce

Want a big signing bonus? Walgreens is offering $75,000 as it recruits new pharmacists.

Obsessing about success makes us unhappy. Surprisingly, so does a focus on passion. There is a healthier way to approach our lives.

A cover letter for a job application sounds old-fashioned, but here’s why you still need to write one



Source link

LEAVE A REPLY

Please enter your comment!
Please enter your name here

Related articles

Photoelectric Sensors Market Worth $ 3.4 Billion by 2031 | CAGR: 7.6%

Rising application in packaging, material handling, and logistics in multiple industries generating sizable lucrative opportunities in photoelectric...

I work at GameStop – The company has a ‘greedy’ way of making customers pay more for used products

A TIKTOKER, who claims to work at GameStop shared “secrets” about the company including a “greedy” way...

Home sharing, backyard cottages help seniors find housing

Bobbie Hill has been renting out rooms in her two-story Claremont house since her first child went...