5 Predictions for the Freelance Economy in 2016
This article originally appeared in Forbes on December 10, 2015.
With the new year fast approaching it’s time to start looking ahead to 2016. But before we do, we’d be remiss if we didn’t take a quick look back on 2015 and reflect on one of the hottest topics of the year: the freelance economy. Many of the observations we made a year ago seemed to have come to fruition in some form or fashion.
The freelance economy continues to grow, not by the same margin from a year ago, but still growing nonetheless. We witnessed the continued adoption of Freelance Management Systems (FMS) as more businesses recognized the need to formalize their management of their rapidly expanding non-employee workforce. We saw global Fortune 500 enterprises increasing their use of independent talent and the continued emphasis on talent analytics as businesses look to make intelligent, data-driven decisions about their workforce.
So, what’s in store for 2016? While many of the developments we saw unfold this year will continue to play out, we’ll expect to see new trends emerge this year that you should definitely keep your eye on.
1. The Debate Around Regulation Rages
Many — myself included — have written about the antiquated labor laws causing so much chaos in the freelance economy. While most acknowledge that today’s laws around worker classification and independent contracting reflect decade-old definitions, there has yet to be anything done. Will that change in 2016?
The changes needed touch so many parts of our society that the complex reform required is beyond the scope of what can be done in Washington these days. However, while the federal government may not be capable of acting (especially with a presidential election looming), don’t be surprised to see a forward thinking state clarify with quantitative metrics when they will act on misclassification.
My money’s on Rhode Island.
2. The Convergence of All HRMIS Begins
Human Capital Management. Vendor Management Systems. Freelance Management Systems. The technology, data and insights needed to effectively manage every component of a modern workforce is growing more complex by the day. As a result, today’s savvy enterprises are beginning to simplify how they think about and manage their entire workforce.
More specifically, they’re starting to integrate their technology systems (HCM + VMS + FMS) into a single, unified platform. The concept of total talent management is only possible with a comprehensive view of your entire workforce, regardless of location, status or type. We’ll start to see more businesses in 2016 building integration that allows them to view and manage all of their labor — full-time, temp and freelance — from a single dashboard.
3. The Mobile Workforce Emerges
In 2016, the rise of the mobile workforce will gather momentum. With a third of the U.S. workforce now freelancing in some form or fashion, we’ll expect to see millions of Americans relying on their mobile device to pay their taxes, plan their work schedules, withdraw their earnings, and even buy health insurance.
From tools like QuickBooks Self-Employed — which helps freelancers track their finances and prepare their quarterly taxes — to offerings from Stride Health that provides affordable health care to independents, we can expect to see a tremendous impact in the way independent professionals use their mobile devices to live and work in the coming years.
4. The Fall of Pure Marketplaces Begins
By our count there are over 300 niche marketplaces for specific talent. Lawyers on-demand. Doctors on-demand, the list goes on and on. While investments in the on-demand sector topped nearly $9 billion in 2015, we can expect to see some of that funding dry up next year and investors start to discern winners from losers in each market.
While some of these marketplaces aren’t large or differentiated enough to sustain in 2016, others will succumb to intensified regulatory concerns around worker classification and on-demand business models (see the evaporation of Homejoy and Zirtual).
5. The Enterprise Finally Embraces On-Demand?
Will 2016 finally be the year the enterprise dominoes start to fall with regards to on-demand? We’ve seen plenty of enterprises in 2016 begin embracing an on-demand labor model that allows them to be more financially flexible, operationally nimble and globally competitive.
From companies like Procter & Gamble to Yahoo! and General Electric to Amazon, some of today’s most iconic Fortune 500 brands have already started an enterprise transformation centered around an on-demand workforce. In 2016, we can expect to see more and more enterprise begin capitalizing on one of the biggest labor revolutions in decades.