A growing number of employers are turning to freelancers for help during the current labor shortage, and the self-employed are reaping the benefits of increased demand, according to a new report from MBO Partners, which provides back-office services to freelancers.
The average enterprise company reported that “contingent” labor now makes up 28% of its workforce, according to The Condition of Conditional Employment: How Agile Enterprises Succeed in a Modern Workforce Model. “Conditional” refers to non-permanent employment, such as agency workers, in-house temps, freelancers, independent contractors, and “statement of work” consultants.
Miles Everson, CEO of MBO Partners, who found that more companies are hiring ‘contingent’ … [+]
“We don’t see this trend going away anytime soon,” said Miles Everson, CEO of MBO Partners, a provider of back office services to freelancers. “There is a problem with the scarcity of human capital in this country. With that challenge of the scarcity of human capital, the balance of power has shifted to the worker—from the employer to the worker. Now employees realize that they can only work for multiple companies. There is such a demand for highly educated people that they choose to become self-employed. This is not just because of the pandemic. The pandemic may have accelerated it. It is not the cause.”
82% of organizations surveyed said more than half of their temporary workforce is made up of skilled temporary workers. The top reasons for using temporary labor are to meet the needs of temporary workloads, increase productivity, complete tasks faster and gain access to specialized skills and hard-to-hire talent, the study found. research.
And the picture gets better for free agents who want to remain fully occupied. 67% of companies expect the use of temporary workers to increase significantly (33%) or slightly (44%). Only 6% expect a decrease in the use of temporary workers.
As a result, MBO Partners predicts that the proportion of the workforce in enterprises will increase from 28% today to 33% in 18 months and 36% in five years.
Some companies will see their share rise much more strongly. Of those where more than 50% of workers are temporary, 91% plan to increase the use of temporary workers in the next five years. 69% of those with a working population of 25% or less on conditional employment plan to use more conditional employment during the same period.
Many of the companies that are increasing their commitment to working with contingent workers have formal systems and processes in place to manage them. However, the majority are “direct sourcing” or contacting freelancers directly. More are also using internal independent marketplaces for talent workers.
For freelancers, this can mean career opportunities that are more attractive than working in a traditional job. “When you work for a company, you owe it to the manager you report to,” Everson says. “They determine your fate. If you are self-employed and there is so much demand for employees, you can choose who you work for.”
