Digital Freelancers Reshaping Modern Workforce

The gig economy isn’t limited to just Uber and Task Rabbit anymore.

You can hire out work online for just about anything – from public relations to mobile app development – and you can do it from your smartphone.

Even the Fed is trying to figure out how to deal with the “sharp increase” in freelance work arrangements, fueled largely by online marketplaces.

Over the last 10 years, all net employment growth in the U.S. came from alternative work arrangements, not full-time jobs, according to a study by RAND.

And now that the gig economy has been around for a few years and the resulting data is starting to get analyzed, we’re seeing the evidence of how service-oriented, freelancer marketplaces that connect buyers and subcontractors are changing the workforce.

Gig economy platforms are impacting nearly every blue and white collar labor sector including skilled, unskilled, professional and even higher ed, where student freelancers are threatening to replace interns.

On the client side, remote workforce management is becoming an essential skill as managers learn to evaluate a candidate’s online profile, interview then via Skype and manage them via email and IM.

A whopping sixty-three percent of organizations are intent on tapping freelancer talent online according to new report by Ardent Partners and SAP Fieldglass. This freelancer transformation in how executives consider growing their workforce will allow for more projects to be handled by a broader and more diverse collection of contingent and full time talent, coupling freelancers and independent contractors with salaried employees.

“As workers seek more flexibility and employers embrace agility in all facets of their organizations, contingent work will exert more and more influence over companies’ success,” says Arun Srinivasan, senior vice president of strategy and customer operations for SAP Fieldglass. “And as we head toward a fundamental shift in the composition of the workforce, companies will need to continue to adopt new strategies and integrate new technologies to engage external talent and turn it into a true business differentiator.”

In the modern marketplace, companies expand and retract staff sizes based on market conditions and demand, using digital platform companies and their apps to replace many of the traditional human resources functions.

Imagine what that means for professional services, where head count ebbs and flows with prevailing, often unpredictable client workloads. For those who know how to hire and manage freelancers, staffing up after winning new business just got a whole lot easier.

Marketwire founder Michael Terpin (who sat on my board at iPRSoftware) recently launched Marketeeria, where clients can hire public relations professionals on a freelance basis. It’s too soon to say if Michael’s startup will disenfranchise public relations agencies, but keep in mind, clients typically save money by going direct to freelancers, and agencies ofter hire freelance specialists after they win accounts. Could PR agencies go the way of travel agencies?

A substantial share of U.S. adults have earned money through the gig economy, based on the latest from Pew Research Center. Nearly one-in-ten Americans (8%) have earned money in the last year using digital platforms to take on a job, one-in-five Americans (18%) have earned money in the last year by selling something online, and 1% have rented out their properties on a home-sharing site. Add it all up and 24% of American adults have earned money in the gig economy over the last 12 months.

The McKinsey Global Institute tells the story on broader scale. They surveyed 8,000 people across Europe and the United States and concurred that 20-30 percent of the workforce engages in some form of independent work.

According to McKinsey, freelancers largely fit into four segments:

  1. Free Agents, who actively choose independent work and derive their primary income from it;
  2. Casual Earners, who use independent work for supplemental income and do so by choice;
  3. Reluctants, who make their primary living from independent work but would prefer traditional jobs;
  4. Financially Strapped, who do supplemental independent work out of necessity

Interestingly enough, of the freelancers who work independently by choice, McKinsey reports higher job satisfaction than for those gigging out of necessity.

Though often associated with ride hail companies such as Uber and Lyft, the gig economy has expanded into nearly every service sector. A friend of a friend recently moved from an apartment in Jacksonville to a new home in Tallahassee and hired a moving company, carpet cleaners and a domestic cleaning service on Thumbtack.com, an online platform focused on connecting buyers with local service providers

I joined the Center for Digital Innovation at Howard Industries to ride the gig economy wave. And we’re getting ready to launch Slance, a new online platform that connects student freelancers with clients. We intend to give clients access to an emerging, on-demand workforce of potential future hires and students the ability to earn experience within their field of study while still on school.

That means tomorrow’s skilled workforce will have the option of far greater control over their destiny.  Those who are truly self-motivated, disciplined and good at their specialty, will earn more, be happier and escape the brunt of office politics.  As always, the cream will rise to top, and tomorrow’s digitally enabled, free agents will reach new heights.

How will you adapt to this undeniable workforce trend?