This original article is published by Mr. Robert McGuire from nation1099. Robert McGuire owns McGuire Editorial content marketing agency and is the publisher of Nation1099, a forum for professional freelancers working to grow their gig economy businesses.
A recent article by the BluMatter team explored the possible advantages to your talent strategy of using highly-skilled independent consultants rather than consulting firms. Apart from the cost savings, solos may be the only source of the right talent in some niches, since no firm can have every specialty represented in its ranks.
Recently, my colleagues and I did a literature review of data about the gig economy and the changing workforce, and our analysis reinforces the case that independent contractors may be a necessary part of the talent strategy of any company that wants to innovate or grow.
In an attempt to parse out how many people are choosing freelancing as a career, we synthesized every study we could find related to workforce development, freelancing, consulting and the gig economy, the highlights of which are summarized in the infographic below. The headlines from these studies may say that one-third of the workforce is freelance, but that usually includes day laborers, employees at temporary placement firms, people who are moonlighting and people who turned on gig economy apps just once in the previous year.
A more realistic estimate of the number of people who choose to be independent contractors rather than work in traditional role-based jobs is closer to 11 percent. That number has doubled in the last 10 years and the group is expected to grow by 3.5 percent per year.
News headlines also suggest that all the action in the gig economy is in low-skill personal services like driving and house cleaning. But in fact, there has been as much growth vertically upward from creative services to strategy, planning and management work. As The Harvard Business Review noted in Rise of the Supertemps, more and more people who would otherwise have Director, VP of and Chief in their titles are opting out to become independent contractors.
The data also shows that you can also assume that the 11 percent of the workforce who are freelance will be a hard pass on any role-based job you might have to offer them. More than 80 percent of freelancers say it is their ideal way of working, and 50 percent say they wouldn’t go back to traditional employment at any price. We are enjoying more respect for this career choice than in the past. More of us chose it willingly. And even those of us who were pushed into it by economic circumstances choose to stay independent after hiring picks up.
Many of the reasons for this flight to freelancing have to do with work-life balance issues and flexibility. But another reason is a desire for engagement and a sense of mission we get from building our businesses, choosing projects we love and being masters of our own fate.
This drive of the growth in freelancing is potentially a good thing for your talent management needs. Despite having only a temporary and project-based relationship with your company, independent contractors will often arrive more fired up about the project than your permanent employees. Only 30 percent of employees describe themselves as engaged at work, and 50 percent say they have their eye out for other opportunities.
The big takeaway for you, though, is that more than 10 percent of the workforce has opted out of the traditional career path in favor of independence. In the U.S., 11 percent is bigger than any single employer, including the government and Walmart.
That means that in a war for talent in a high-skill, high-demand domain, your biggest competitor is unlikely to be another company. In a war for talent, your biggest competition is now self-employment.
Put another way, 11 percent of your potential talent pool doesn’t want to work for you, but they may want to work with you.
And therein lies the opportunity to turn that competition into an ally. If you have a strategy to identify, recruit, onboard and engage the high-skilled independent contractor talent out there, then you can set yourself apart. Most of us encounter ersatz contracting and onboarding processes at our clients that slow down the work and undermine communications and relationships. In the worst cases, clients hold consultants and freelancers at arms length in ways that are counterproductive and then treat them as disposable when the project is done.
That is a huge strategic mistake but, unfortunately, very common. The changing nature of work requires a shift in attitude that views this rapidly growing part of the workforce as a vital part of the work your company is doing. Follow up that attitude with policies and practices that reflect it, and you will differentiate yourself from other companies.