A ‘tectonic’ shift is boosting freelance work. What should HR know?

As many companies continue to face a persistent talent shortage and navigate economic uncertainty, employers are increasingly turning to skilled freelance professionals to fill key roles and functions.

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In a recent survey of 1,000 U.S. business leaders, ResumeBuilder.com found that nearly 60% of those polled have laid off employees in the last three months, and more than half plan to conduct layoffs in the first half of 2023. Of those that have had recent layoffs, nearly 40% plan to hire contract workers to replace the talent that was let go. And more than half have asked some full-time employees to transition to contract work.

The pull toward freelance and contract workers is among the approaches in the latest HR trend: “quiet hiring,” or the strategy by which “organizations acquire new skills and capabilities without acquiring new full-time people,” according to Gartner.

“This approach can help keep payroll costs low, assist with retention and cultivate home-grown skills,” Emily Rose McRae, senior director in the Gartner HR practice, recently told HRE. “Fighting for new full-time external talent will be a much less attractive option for many organizations in 2023, and we expect many organizations will turn to ‘quiet hiring’ as an alternative solution to skills gaps.”

According to Margaret Lilani, vice president of talent at Upwork—a marketplace that connects businesses with independent talent—recent data shows 60 million Americans performed freelance work in the past 12 months, representing 39% of the U.S. workforce.

“We are experiencing a once-in-a-lifetime, tectonic shift in the notion of work, where skilled professionals are rethinking what they want from their careers and are gravitating toward the flexibility, autonomy and benefits of freelancing,” she says. At the same time, she adds, the uncertain economic environment is pushing businesses to explore new solutions to stay competitive, and they’re finding unlocked potential in the growing pool of skilled independent professionals.

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According to the Upwork research, the most in-demand skills that organizations are expected to seek from freelance and contract professionals in 2023 include technology, marketing, customer service and administrative support, accounting and consulting, and design and creative.

“As we kick off 2023, companies will likely seek independent talent across a broader range and at a higher rate than ever before,” Lilani says.

Related: The latest trends for retaining talent in today’s uncertain economy

How can organizations maximize the potential of growing their freelance base? For one, Lilani says they will have a much wider pool of candidates to pull from if they’re willing to embrace remote and hybrid work.

“To make the most of implementing a freelance workforce, HR leaders should shift from thinking about talent acquisition to talent access,” she says.

This can also include evolving everything from benefits programs to onboarding strategies to include freelancers. Ultimately, she says, equity needs to be a primary consideration as organizations tap into these new talent pools.

If employers can ensure these new workers are getting the support they need, they can create a workforce that will sustain the business through the economic challenges to come.

“The bottom line: Organizations that embrace freelance talent and a hybrid workforce,” Lilani says, “have faster access to more talent and better odds of not just making it through challenging macroeconomic conditions, but accelerating out of them.”

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Tom Starner
Tom Starner is a freelance writer based in Philadelphia who has been covering the human resource space and all of its component processes for over two decades. He can be reached at hreletters@lrp.com.

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