Key to Success in the Post Pandemic Era: Freelancers
The idea of gig work is not new, even to traditional and established businesses. The use of contingent workers and gig workers has grown quickly and shows no signs of slowing. It is actually increasing faster as more companies look to restructure their talent acquisition now that we have settled into this new "normal" of work. Let us take a look at key indicators that were emerging pre-pandemic and how that indicates what the future just may hold for businesses and workers alike.
More Workers Plan to Continue Gig Work Illuminating the Shadow Workforce, research released by the ADP Research Institute found that while W-2 work is attractive to many, it’s actually not even on the radar for many 1099-MISC workers.
- 60% of these workers expect to still work as a 1099-MISC and have no plans to convert to a W-2 position.
- 50% of current gig workers under 35 prefer to continue as 1099-MISC,
- 18% of Gen Z say they will not be in the traditional W-2 workforce even 3 years later.
These data points were reflecting the sentiment, even before current events, signaling a possible permanent shift in the attitudes surrounding the way we work.
Gig Workers are Actively Choosing to Work Independently Prior to the pandemic and despite opinions to the contrary, ADP research found that 70% of current gig workers are doing so because they want to, not because they can’t find a more permanent, W-2 position, and plan to continue to gig in three years. Even healthcare and other traditional benefits to a W-2 position are not enough of an enticement of these workers to transition to a permanent W-2 position, according to ADP.
Research Finds Freelancers Drive Almost ¼ of Company Performance ADPRI research suggests these workers may be driving 16% or more of a company’s performance. With 82% of line of business managers and c-suite members believing that productivity is the main factor in business success or failure, and 83% believing that contractors are more productive than employees, it’s no surprise that 40% of organizations today report that one in four of their workers is a gig worker.
Contractors Save Enterprises $800 per Month When you dig into the data, ADPRI research found that after adjusting for benefits and other legal costs, W2 employees cost businesses $800 more per month over a 1099-M worker. Add in the increased agility and performance that this flexible workforce provides, it’s no wonder this trend has captured the attention of businesses.
Nearly All Businesses Use Freelancers, With One in Four Workers Being a Gig Worker And for 20% of businesses, gig workers comprise more than 50% of the workforce, according to ADPRI research. Even with such widespread engagement, the majority of businesses do not have a system in place for tracking these workers and they do not fall under the larger HR strategy plan. This seems counter-intuitive to these enterprises that have thrived under having strong processes in place and makes it very challenging to get the whole picture on the contributions and efforts of their 1099-M workforce.
Illuminating the Benefits of the Contingent Workforce
ADPRI states in their report that “--new kind of workforce has captured the imagination of employees in search of a more flexible and scalable workforce. At the same time, gig work has motivated workers to find new outlets for added income that rewards them with more personal freedom and choice."
The workforce was already primed for massive disruption in the way we work. No one could ever have anticipated that a pandemic would be the catalyst that pushed us over the edge. The numbers couldn’t be more clear, though. For the safety of their employees and their customers, businesses are being pushed to find new ways of meeting their customers’ needs. From reducing travel to remote work, or flexible work options, and more, businesses are adapting. And by tapping into the talent of the freelance workforce, businesses are also realizing large gains in productivity while protecting that bottom line and becoming more agile.
Don’t let this opportunity pass you by. Receive the full benefits of a contingent workforce by gaining visibility into these vital workers and increase your competitive advantage. Learn more about how WorkMarket’s Freelance Management System helps businesses like yours efficiently and compliantly organize, manage and pay their extended workforce.