October 31, 2014

Independent Workforce On The Up And Up?

workforceIf you’re looking for work in this brave new 21st century world, the place to be is in the freelance space, according to a recent global business survey by Elance.

The survey, in which more than 1500 firms from around the world participated, contains quite a bit of great news for freelancers — otherwise known as nonemployer businesses.

When asked whether hiring freelancers online gives them a competitive advantage, 85% agreed that it did. Of them, 53% noted that online hiring reduces hiring costs for them, while other advantages included faster time-to-hire and access to a broader talent pool.

Perhaps the best news from this survey for the contingent workforce is that contract work appears to be here to stay. Evidently, the best thing about a virtual contract workforce from the business point of view is that it gives the business access to a talent pool that is as good as or better than (69%) what is available to them locally.

Between that and the fact that firms are not usually required to provide the same benefits to those contractors as they would be for permanent employees, it is easy to see why 73% of survey resopndents say they will have hired more freelancers in 2012 than they did in 2011. Of them, 27% have on-site freelancers and the remaining 73% use online contractors.

Businesses surveyed also noted that they anticipate having lots of work for programmers and developers (70% of respondents), graphic designers (61% of respondents), writers (38% of respondents), marketers (32% of respondents), and mobile app developers (28% of respondents) over the next six months. Looking further down the road, 57% of resopndents anticipate that more than 50% of their workforce will consist of online freelancers within the next five years.

Of course, this survey has some significant limitations. Elance did not indicate where its pool of respondents came from but, if it was culled from among their own clients, then the survey qualifies as a Kool Aid sales pitch from those who have already drunk it. It would be interesting to see the results of a similar survey conducted among a more random assortment of business owners and/or human resources managers.

That said, these survey results do make sense in the light of increases in nonemployer numbers in both 2009 and 2010, in spite of the limping economy — or perhaps because of it. For many firms of many sizes, lean is the name of the game in the information economy and contract workers can be experienced and highly skilled and extremely cost effective. For cash-strapped small businesses and cost-cutting larger ones, it doesn’t get much better than that.

In the meantime, however, the implications for the American workforce are worth pondering. I am not aware of anyone who is looking at these numbers right now but it appears that nonemployers, examined as a segment of the workforce, are somewhere between 25% and 33% of American workers.

That is a trend that is not likely to reverse itself anytime soon and it is a trend that needs the attention of economists and policy makers, as well as the business community.

Crowd Photo via Shutterstock

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Dawn R. Rivers


Dawn R. Rivers Dawn R. Rivers, an award-winning small business journalist, regularly reports and analyzes small business policy and research as the publisher of the MicroEnterprise Journal. She also publishes research at the Microbusiness Research Institute and she blogs at The MicroEnterprise Journal Blog.

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