The latest Deloitte Global Human Capital Trends Report has uncovered a new reality in the way we work, what they call a “boundaryless” world, confirming that what was once an alternative workforce is now firmly the norm.
Once viewed merely as a side-gig to supplement a full-time job, freelancing is now an increasingly common career choice. Organizations are already tapping into this important talent-pool but many still lack a strategic approach: one that optimizes this workforce by introducing a standardized process and creating new connections between HR, IT, procurement and other business functions.
This is part of a series of articles about Future Workforce.
What is the “alternative workforce”?
What do we mean when we say the alternative workforce? This is a broad concept encompassing traditional contractors, entirely outsourced teams, freelancers who charge for their time, gig workers paid by the task and even crowdsourcing where workers compete to participate in a project and are often only paid if they are among the top.
Growth in this segment is a global phenomenon
Official figures confirm the rise of the alternative workforce across the world:
- The number of self-employed workers in the United States was 73.3 million in 2023, and projected to be more than 90 million by 2028, more than 50% of the workforce.
- 90% of corporate leaders say they have plans to increase their reliance on freelancers.
- 81% of businesses are using freelance talent to support in-house staff and fill skills gaps.
Full-time employees are a shrinking talent pool
76% of business executives surveyed by Deloitte expect to experience a shortage of critical worker skills over the next 2 years. This is in part due to the changing nature of the workforce, where full-time employees are less available than ever before.
Demographic factors have contributed to a shrinking full-time labor pool, such as the decline in birth rates in many countries. Modern lifestyle trends are also pushing more people out of full-time employment and into the alternative workforce: retirees returning to work, people caring for children or elderly parents, professionals going back to school, or workers leaving full-time employment to start their own businesses. All in all, there are close to three million fewer full-time workers in the US than there were back in 2020.
The alternative workforce fulfills a wide range of needs
There are many reasons why companies lean on the alternative workforce of freelancers, consultants, agencies, and independent contractors. They fill a lot of gaps! In a recent report by Harvard Business Review and Fiverr, 64% of respondents say that their organization employs freelancers across a diverse range of roles, with the most common being IT-related, software development, writing and communication and creative design.
As to where to source these workers, there is a wide range of sources for freelance talent, from Freelancer Management Systems (FMS) built for purpose, to staffing agencies, and online marketplaces such as Fiverr, Upwork, Toptal, and Freelancer.com.
Specialized platforms are also cropping up in all sorts of niches, like Turing, which focuses on senior, pre-vetted engineers and developers. Talent networks now generate billions in outsourced activity and employ hundreds of millions of workers worldwide.
Organizations aren’t leveraging the alternative workforce to its full potential
Deloitte’s report suggests unlocking the potential of a changing workforce ecosystem is no mean feat. Just 16% of respondents say they are ready to make this shift. “The value of fostering diverse workforce ecosystems is enormous, but many organizations are still stuck in old patterns of talent access and management because they’re not giving workers of all types (gig, freelancers, contractors, employees, etc.) any say in where, how, and for whom they work. Organizations that adapt their strategies and practices to fit the real-world talent pool, which is far more complex and increasingly comprised of nontraditional workers, will gain access to skills and experiences to accelerate growth, innovation, and agility.”
The potential of this workforce is huge, and we can already see it in action. 71% of tech founders and executives say bringing in freelancers has increased their agility during times of economic uncertainty, and as seen in the chart below, 62% agree that flexible work models increase productivity.
And yet, while according to the Harvard Business Review, 81% of companies believe freelancers are important to their organization — only 38% say they are effective when it comes to managing them. To leverage the freelance revolutions’ full potential in enhancing company performance, companies need to switch from a tactical approach of simply filling vacant slots to the strategic engagement of alternative work as a long-term solution.
A strategic approach to the alternative workforce
It’s a complex process. Even in some companies where there are proper policies in place, there’s often a lack of an organization-wide approach.
Companies need a strategy that allows the business to connect the right role with the right talent, regardless of how it’s sourced, and as 87% of respondents to the Deloitte survey agree — to match skills with organizational goals. This can not be achieved without connecting the various business functions which are often involved in this process in a fragmented way, including procurement, IT, and HR.
Often, with new process implementations comes the need for new tools, and some organizations are already taking advantage of a growing number of alternative workforce management tools, with some key acquisitions happening in the market. These tools are developed from the ground up to manage the freelance workforce, and to connect all key stakeholders involved in managing this critical element of the business.
Integrating alternative workforce with internal teams
73% of businesses are already working with integrated teams of full-time employees and freelancers. However, integrating alternative and traditional workers within the same project brings its own set of challenges, as their backgrounds and motivations may differ. Managers need to be prepared to lead a team with a diverse mix of people with respect to culture, inclusion and work assignments, making sure both sides are happy with the arrangements.
Companies that take these challenges seriously and adopt dedicated tools such as a freelancer management system have a better chance to access and effectively employ talented workers from all segments of the labor pool, promoting diversity of the workforce, accelerating time to market and boosting business growth.
Seeing value in practice with Fiverr Enterprise
Fiverr Enterprise is a Freelancer Management Solution that gives you full visibility and control over your entire freelance workforce by allowing you to source, hire, onboard, manage and pay, all while ensuring compliance, so your teams can work faster and maximize business growth.
With Fiverr Enterprise your business can utilize talent experts to find the right vetted skills that meet specific gaps and organizational goals, ensure 360 degree compliance and visibility from onboarding to offboarding, and build your own talent pool so you can quickly and effectively pull in freelancers where and when they are needed most. We empower organizations to pay on their own terms, creating enterprise payment terms, keeping visibility of every spend, and ensuring every freelancer is paid accurately and on time.
Interested in a freelancer management solution to boost the impact of your alternative workforce? Schedule 30 minutes with one of our workforce experts.
Related content: Read our guide to on demand employees
Related content: Read our guide to talent on demand