The number of freelancers has been steadily increasing over the past decade, and experts agree that this trend will continue. The Intuit 2020 Report predicted that by 2020, 40% of America’s workforce will be freelancers.
According to a recent study by the Freelancer Union and Upwork, freelance work is expected to grow 19% from 2016 to 2026. Projections suggest that by 2027, 54 million Americans will be working as freelancers.
In addition to the rise in freelancers, there has also been an increase in the number of businesses using freelancers as part of their workforce. According to a recent report from Intuit 2020 Report:
“We’re seeing an increased demand for contingent workers who can provide flexibility in staffing needs.”
While you might not have considered using freelancers before, there are many benefits for both sides when it comes to this type of relationship.
The use of freelancers is becoming widespread in all industries and enterprises around the world. It is no longer just small companies that are using freelancers; medium and large-sized enterprises are also using them more frequently.
The benefits of using freelancers in your enterprise include:
Cost savings – Freelancers are often cheaper than hiring full-time employees because they do not require benefits or salary. A study by Upwork revealed that the average cost of hiring a freelancer was $12 per hour compared to $24 per hour for an employee. This means that companies can save around 70% by using freelancers instead of employees.
Flexibility – Freelancers are able to work on any project that needs their skills, which means they can be flexible in terms of working hours, location and schedules. This allows companies to hire based on availability rather than having to wait for another employee to become available for a particular project or task.
Speed – Freelancers can often complete tasks much faster than employees due to the fact that they do not need training or have other obligations such as family commitments or commutes etc
The use of freelancers is growing rapidly and has been for several years. In 2016, it was estimated that around 53 million people were working as freelancers in the US alone. This represented an increase of more than 3 million workers from 2015.
The rise of freelancing has been driven by a number of factors, including:
- A change in the way work is viewed; with more people wanting to work for themselves rather than for an employer
- A shift towards more freelance-friendly companies who are willing to hire freelancers
- A shortage of full-time employees, particularly when it comes to technical skills
- Many businesses are turning to freelancers because they offer a range of benefits that permanent employees cannot provide.
Cost efficiency: Freelancers tend to charge less per hour than their permanent counterparts as they don’t have any overhead costs associated with employees such as insurance and benefits packages. They also have fewer expenses related to office space and equipment maintenance which means that they can pass these savings onto you!
Flexibility: With a flexible workforce, you can expand or reduce your staff according to your needs at any given time without having to worry about holding on
Increased Reliance on Freelancers
As well as an increased level of demand for contingent workforce solutions in the future, the study also suggested that companies are already relying on freelancers in their business model. Of those interviewed, 47% of managers suggested that they were currently using freelancers while 39% stated they would be using more through the next year. Interestingly, very few – just 16% – suggested that they would be reducing their numbers. This suggests that these managers are pleased with the benefits freelancers are bringing to their business.
Improved Workforce Agility
The second most popular reason for using contingent workers was to improve workforce agility and speed up processes. According to the report, 58% of managers claimed this as a reason for using freelancers while only 36% suggested it was because they couldn’t find suitable permanent employees. This suggests that companies are beginning to recognize the benefits of having a flexible workforce and recognizes that there are often many different people with different skill sets required at any given time within an organization. It also suggests that businesses are beginning to understand how important it is to make sure they have access to these skill sets when needed – even if it means hiring someone on an adhoc basis or paying more money than you may want to do so.
Growth in Digital Platforms
These digital platforms provide managers with an easy way to access and hire workers across a variety of different industries. The most common types of platforms include Upwork, Freelancer, and PeoplePerHour.
Companies like Uber have also started using freelancers as part of their core team, allowing them to outsource tasks such as customer service or data entry. This has allowed them to improve their own internal processes while reducing costs associated with hiring full-time employees.
Freelancers can be extremely valuable for businesses looking for specialized skill sets or expertise that may not be available internally. For example, if you’re looking for an expert in SEO or UX design then you may find it easier to hire an external resource than try to train someone internally who doesn’t have the necessary skill set.
As the economy continues to rebound from the recession and unemployment rates drop, more companies are hiring full-time employees again. However, there is also a growing trend among mid-sized and large businesses to outsource tasks that do not require full-time employees or permanent contracts.
According to an article in The Wall Street Journal, “Contractors Cost U.S. Companies $1 Trillion Per Year.” The article cites a study by McKinsey & Co. which shows that 41 percent of all workers in the U.S. are either contractors or temporary workers. This figure includes:
Freelancers – 33%
Temporary Workers – 14%
Contractors – 12%
In short, I hope you found this information valuable. If you’re an enterprise manager looking to hire freelancers within your company, And if you’re a freelance engineer looking for work, feel free to get in touch with us. Sign up today for pursuing ambitious projects with full-time or part-time freelance engineers who can commit to long-term employment.