The Formidable Rise Of Freelancers In The Labor Market
May 12, 2023
Freelancers are getting more professional than ever and take on many important business tasks.
1. The growing of freelancers
Freelancers are already familiar to many businesses. These are independent contractors with specialized skills that are hired for short-term tasks or business urgent demands.
A perk of being a freelancer is the flexibility – a flexible work schedule, the freedom to work from home or from a non-traditional workspace, etc. which makes freelancers increasingly popular recently. According to the World Bank, approximately 1.57 billion people in the global workforce are freelancers out of a total of 3.38 billion – updated until February 2023. In the US, the number of freelancers is currently 73.3 million (according to Statista), and this number is predicted to continue to increase and exceed 90.1 million people by 2028 (according to Edelman Intelligence).
The freelance workforce is making strides not just in quantity, but also in quality. As Upwork’s survey (US) shows that up to 43% of Gen Z experts and 46% of Millennial experts are freelancers.
After the wave of resignations and layoffs, some workers, including many high-quality workers ones, choose to start freelancing instead of looking for new corporate jobs which makes the number of freelancers increase significantly. “Freelancer is no longer a side job, but gradually becomes a career choice for the workforce,” said Ms. Trân.
According to the expert, knowing how to improve skills and position personal brands will help freelancers create competitive advantages as well as become experts in their fields. There are two groups of freelancers that have a significant impact on businesses, which are:
The first group is the “consultant freelancers”, usually Gen X. They may be experts who are about to or at the stage of retiring but still want to contribute. With their experience and skills, these experts can become consultants, helping businesses with policies and providing in-depth training.
The second group is the “skillful freelancers”, mostly Gen Y and Gen Z. This is a group of freelancers with the ability to handle complex and specialized demands, who are “stars” sought after by many businesses for big projects.
To prepare for the freelancer wave, Ms. Ngọc Trân believes that businesses need to prepare identification and reception strategy to attract potential candidates to their teams.
2. How to leverage freelance workforce
After the fluctuations in the labor market, optimizing operating costs and increasing the quality of freelancers has changed the business’s recruitment mindset. “Businesses have become more open to freelancers for important tasks. Besides, freelancers also contribute to changing the work experience, promoting the learning spirit of the internal workforce,” said Ms. Ngọc Trân.
Despite the benefits of this workforce, Ms. Ngọc Trân also provides 3 risks that may occur when hiring freelancers. Specifically, business information might be public for the freelancers to access which might lead to security vulnerability.
The nature of a freelancer’s job is freedom, not bound by a company’s legal policies, which affects the ability of HR and managers to manage and control work. Depending on the nature of the job, each freelancer will receive different workloads and salaries, and salary and bonus issues also need to be optimized.
To address risks and avoid potential conflicts for both parties, Ms. Trân suggests that businesses can consider using HR outsourcing services to replace long-term freelancers (6 months or more). This will help optimize the costs and the time in managing this workforce. At the same time, with expertise and experience, HR outsourcing services also ensure employee benefits with salaries and bonuses in accordance with legal regulations. Businesses and HR departments have time to focus on developing business strategies.
She believes that a high-quality freelancer who is loyal to the business is equivalent to a full-time employee. If businesses are interested and invest appropriately, this free resource can become a “real” employee – a valuable support for businesses.