The Freelancer Revolution is Here - HR will Never be the Same

Freelance working has become an increasingly common concept in recent years, with more and more people choosing to move away from traditional '9-to-5' jobs and take an approach that gives them more control over their careers.

Employers can also gain a lot from working with freelancers, with key benefits including only paying for the people you need when you need them and being able to access specialist skills for one-off or short-term projects.

With all the signs suggesting this will be a continuing trend in the coming years, HR teams need to be prepared for the impact it's likely to have.

Freelancing on the rise

The growth of freelancing as an acceptable and appealing way of working has been a clear trend in countries and regions around the world in recent years.

In the US, total income from this method of working totals almost $1 trillion - more than major industries like construction, according to a 2019 report from Upwork and Freelancers Union.

The findings also showed that more than half (53%) of Gen Z workers (aged 18 to 22) had done freelance work - the highest level of independent workforce participation of any age bracket since the study began in 2014.

The European Commission has said the definition of small and medium-sized enterprises should "acknowledge freelancers as a stand-alone category" and legitimize "the smallest of small businesses". It’s also pointed out that freelance workers are the fastest-growing segment of the EU labor market, increasing in number by 45% since 2000.

COVID-19 consequences

One of the many repercussions of COVID-19 as far as HR and employment were concerned was the rapid normalization of remote working.

People having the freedom to work from their homes and other remote locations was already a growing trend before 2020, but the social distancing requirements created by the pandemic caused it to accelerate rapidly.

According to EY, the 'work from anywhere' phenomenon is 'here to stay'. This growing familiarity and acceptance of remote working among businesses across the globe is undoubtedly a positive trend for freelancers.

As far as other consequences of COVID-19 are concerned, a survey of independent workers conducted around the time the World Health Organization declared the outbreak a pandemic suggested a fairly positive attitude.

In March 2020, 32% of freelancers surveyed for a Payoneer report said demand for their services had greatly decreased, but 53% expected a boom in interest from businesses after the crisis abated. The research also highlighted consistent monthly growth in global freelance revenue between March and June 2020, peaking with a 28% month-on-month rise in June.

What does the freelancing phenomenon mean for HR?

If freelance working becomes increasingly common and more widely accepted in the coming years as recent trends suggest, one of the key considerations for HR is what this could mean in terms of day-to-day business functions and operations.

With a wider range of skills and specialist capabilities becoming available on the freelance market, you might want to think carefully about how your business could benefit from engaging with this portion of the workforce.

However, it's important to consider all the possible pros and cons of working with freelancers, with potential risks including:

• Missed deadlines if the person you're working with is combining your project with commitments to other businesses
• Less personal involvement and commitment to the work because they're not employed by you full-time
• Potential security implications of giving remote freelancers access to your internal systems and data

Furthermore, anyone working in HR right now might want to give some thought to how the growth of freelancing could fundamentally change this line of work and open up brand new opportunities.

UK insurance broker PolicyBee published research in February 2021 showing that searches for freelance HR services had increased by almost 46% during the last three years.

Just how big an impact the freelance working phenomenon has on business in the coming years and decades remains to be seen, but it's undoubtedly a trend that HR professionals can't afford to ignore.